ISSN: 2354-6611
These proceedings have been published by the Telkom University (Tel-U) and Telkom Corporate University Center (TCU-C). Postal Address:
Faculty of Economic and Business Telkom University, Jl. Telekomunikasi Terusan Buah Batu Bandung 40257 Indonesia
Knowledge Management & Case Study Center Telkom Corporate University Center 2nd floor Information Building Jl. Gegerkaong Hilir no. 47, Bandung 40152 Indonesia
Statement of review All papers resproduced in these proceedings have been indepedently peer reviewed, by at least two qualified reviewers, with DIRJEN DIKTI requirement. All papers reproduced in these proceedings were presented at International Seminar and Conference on Learning Organzations (ISCLO) held at Ritz-Carlton Hotel, Mega Kuningan, Jakarta, Indonesia between 5 – 6 November, 2014
Disclaimer The opinions, advices and information contained in this publication do not necessarily reflect the views or policies of the ISCLO Scientific Commitee or its members. Whilst all due care was taken in the compilation of these proceedings, the ISCLO Scientific Commitee does not warrant that the information is free from errors or omission, or accept any liability in relation to the quality, accuracy and currency of the information.
Copyright Copyright © 2014 International Seminar and Conference on Learning Organization and the Authors. The author(s) assign to the International Seminar and Conference on Learning Organization (ISCLO) an educational nonprofit institution, non-exclusive licence to use this document for personal use and in courses of instruction; provided that the article is used in full and this copyright statement is reproduced. The author(s) also grant a non exclusive licence to the International Seminar and Conference on Learning Organization to publish nd this document on the ISCLO website and in other formats for the Proceedings 2 International Seminar and Conference on Learning Organization 2014. Any other use is prohibited without the express permission of the author(s). Apart from any fair dealing for the purposes of research or private study, criticism or review, as permitted under the Copyright Act, 2014, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licenses issued by the copyright Licensing Agency. Enquiries concerning reproduction outside those terms should be sent to the International Seminar and Conference on Learning Organization at the above address.
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List of reviewers (ISCLO Scientific Commitee) The conference organisers would like to express their gratitude for the contribution made by the following reviewers of papers reproduced in these proceedings. Prof. William Hickey, PhD (Solbridge International School of Business, Korea) Prof. Togar Simatupang, PhD (School of Business and Management ITB, Indonesia) Prof. Jann Hidayat Tjakraatmadja (School of Business and Management ITB, Indonesia) Prof. Peter Charles Wood, PhD (Malaysia Multimedia University, Malaysia) Prof. Zulikha Jamaluddin (Universiti Utara Malaysia, Malaysia) Prof. Dr. Ir. Riri Fitri Sari MM MSc (Indonesia University, Indonesia) Prof. Andreas Budiharjo (Prasetiya Mulya Business School, Indonesia) Prof. Dermawan Wibisono (School of Business and Management ITB, Indonesia) Prof. Sucherly (Padjajaran University, Indonesia) Prof. Lim Cher Ping, PhD (Hongkong Institute of Educator, Hongkong) Ade Irma Susanti, Ph.D (Telkom University, Indonesia) Dr. Yudi Pramudiana (Telkom University, Indonesia) Dr. Sutanto (Universite de La Rochelle, France and University of Sebelas Maret Solo, Indonesia) Dr. Ningky Sasanti Munir (PPM School of Management, Indonesia) Dr. Teguh Widodo (Telkom University, Indonesia) Dr. Dodie Tricahyono (Telkom University, Indonesia) Dr. Darwina Binti Hj. Ahmad Arshad (Univeriti Utara Malaysia, Malaysia) Dr. Jafar Sembiring (Telkom University, Indonesia) Dr. Jamari (University of Twente, The Netherlands and Univerisity of Diponegoro, Indonesia)
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Editorial It is with pleasure that I present the full papers of the 2014 International Seminar and Conference on Learning Organization (ISCLO). Each paper represents a substantial contribution to the learning organization in all its defined forms, such as Corporate Learning, Corporate Univeristy, Leadership Pipeline, Global Competitiveness, Managing Diveristy, Knowledge Management, Instructional Design System, and Learning Technology & Methodlogy. With such dynamic business environment, learning organization is required to anticipate any uncertain future. Companies are required to be able to enhance their business’ excellence and sustainability. Learning organization means that the corporates should facilitate the learning process for all their members, including their stakeholders, and continuously make improvements. In addition, an organization is expected to learn collectively and continuously to obtain, organize and use knowledge for the success of the organization. Learning organization, furthermore, means empower people in and around it to build a sustainable competitive advantage. As we all know that the ASEAN Economic Community (AEC) in 2015 is approaching. ASEAN Economic Community (AEC) will be the goal of regional economic integration by 2015. ASEAN Economic Community whose platform is similar to the European Economic Community (EEC) can be a serious threat to those who are not ready yet. Although the spirit behind the establishment of the AEC is to reduce poverty and economic disparities among the ASEAN member countries through a number of mutually beneficial cooperation, in practice, AEC will also trigger a frontal competition in the levels of nations, industries, companies, and even, up to the individual (labor). The crucial issue of AEC is related to the movement of human capital which includes a group of highly skill and have international certification. Those who have a license and certification can freely enter anywhere including Indonesian market. And vice versa, with their international certification, experts from Indonesia can freely take part in other ASEAN countries. This condition undoubtedly becomes a great threat to those who are low competent ; in contrast, it becomes great opportunities for those who are of global standards. Like two sides of a coin, AEC could be a deadly threat and at the same time be a lucrative opportunity. AEC pushes us to let outsiders enter our markets, but it provides us the way to grab far greater and profitable opportunities. The implementation plan of the ASEAN Economic Community is not merely discussing the economic relations among the countries that predictably will be more widely open. Basically it is not only the country that has an intention in this case, but also the people in it. Globalization, undeniably, has made the national boundaries become blurred (borderless). Through AEC every individual would have equal opportunity to achieve something, to improve his/her welfare as well. Overall, there is clear evidence of an emerging body of knowledge around learning organization. Presented in these proceedings are 66 papers. The conference had 79 papers submitted for review, and these proceedings therefore represent an 82% success rate upon review. The conference overall had 66 presentations delievered. These proceedings represent all presentations made at the conference. Enjoy reading these proceedings and I hope that they contribute further to the advancement of ideas around work-intergrated-learning and responding to the challenges of this space
Sri Praptini Rahayu nd 2 ISCLO 2014 Chairwoman email : [email protected]
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A propossed conceptual fr frameworrk of corrporate uuniversitty Jann Hiidajat Tjak kraatmadja, Dedy Susshandoyo, Didin D Kristtinawati School off Business and Management M Bandunng Institute of Tecchnology
Abstract A The aim of this paper is to prropose a concep ptual frameworrk for organisin ng a corporate university. Thhe background that motivates in writing w this papeer comes from the fact that, on the one handd, there is a gro owing interest among a Indonesiia’s large corpo orates to establiish co orporate univerrsities for strateggically strength hening their perrformance throu ugh innovationss. On the otherr hand, there is no n clear guidannce with w regard to hhow the corporrate needs to organise o system matically such universities. u Th he basic idea oof this proposed d framework iss a co orporate univerrsity needs to be organised in i a way wherre knowledge can c be utilised d into innovatioons, which pro ovide competitiive ad dvantages and revenues for the t corporate. Furthermore, F thhe framework provides guidaance including basic principles and steps thhat su uggestively neeed to be implem mented when org ganising a corpoorate university y.
© 2014 Jann H Hidajat Tjakkraatmadja, Dedy D Sushanndoyo, Didin Kristinawati. Published by Telkom Pub. P Ltd. Selection andd peer-review w under respo onsibility of T The ISCLO, Department of o Communiccation, Univeersity of Telkom, T 203422 Bandung, Indonesia I . Keywords: K corpporate universityy, knowledge, innovation, i learrning organisatiion, knowledge management, iinnovation man nagement.
1.. Introduction n Several large eestablished staate-owned corrporate such aas Telkom Ind donesia and PLN P have devveloped corporrate universitiies (S Sindo, 2013).. These are universities u th hat the studeents are the employees off those corpoorates. The present p of suuch un niversities in Indonesia caan be tracked back in 19990 when Telk kom Institute of Technologgy was establlished (Telkom m, 20 013). It was followed by the establish hments of othher corporate universities by other corrporations succh as PLN annd Pertamina. Whhile it can be argued that the t presents oof such univerrsities are tak ken for granteed as an impo ortant factor for f Telkom T in gainning its posittive performance, there is however no clear guidancce what can bbe considered d as a corporaate un niversity and how such a university neeeds to be orgganised. The aim of the paper is thereffore to provid de a conceptuual frramework of ccorporate univversity. This T paper is orrganised as foollows. It starts by explorinng the definitio ons of corporaate university, which are then combined by b prroviding som me examples of o corporate universities u esstablished by foreign (non--Indonesian coorporate univ versities such as Mc. M Donald). Before propoosing a conceeptual framew work of corporate universsity, the papeer explored th heories that are a reelevant for thee developmentt of the concep ptual framewoork. 2.. On Corporaate Universityy Itt is a typical that corporatiions have org ganisations thhat are respon nsible for prov viding training ng or educatio ons. While suuch orrganisations pplay a criticall role in develloping corporrates’ perform mance, they ho owever cannoot be considerred as corporaate un niversities. M Mark Allen (20002) provided d definition off corporate un niversity as “an educationall entity that iss a strategic toool
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designed to assist its parent organization in achieving its mission by conducting activities that cultivate individual and organizational learning, knowledge, and wisdom.” According to Pandey and Sharma (2010), a corporate university is typically characterised as follows. It is an organisation that is aimed to shift a business from solely learning oriented into learning that is followed by actions. The aim of the establishment is to achieve corporate excellence through developing their employees’ performance and corporates’ cultures that facilitate innovations. In more specific, the establishment of corporate universities is to achieve the following goals:  Creating organisational culture, loyalty and sense of belonging to the corporate  Developing and organising trainings  Encouraging continuous learning  Providing a significant amount of the investment for employee educations  Contributing to the corporates’ competitiveness  Making efforts to maintaining the employees to be still in the corporation  Initiating and supporting necessary changes in the corporations Several multinational corporates such as Walt Disney, Boeing, Motorola and McDonald have established corporate universities. 3. Relevant literatures for developing a conceptual framework of corporate university It is argued in this paper that there are some literatures that can be relevant for developing a conceptual framework of corporate university. Those literatures are related to learning organisation, knowledge management and innovation management.  Learning Organisation Learning organisation can be defined as an organisation (e.g., corporate) that facilitates learning for its workers (Tjakraatmadja and Lantu, 2006). It is expected that such learning leads the organisation to remain competitive. For that, such an organisation needs to nurture cultures and provide facilities to make learning prospering. In a learning organisation, workers are expected to have spirits toward and skills for learning. Here the workers have willingness to learn independently and share their knowledge in their organisation. With such learning, it is expected that the workers’ and organisation’s knowledge are developed and rejuvenated so that the organisation becomes sustainably competitive and innovative (Tjakraatmadja and Lantu, 2006). In a more systematic way, Peter Senge et al (1990) argues that a learning organisation is characterised by five elements, which are systems thinking, personal mastery, shared vision, mental model, and team learning. Shared Vision to create shared vision of learning targets, improvement strategies, and team/organisations goals. Mental Models determine the way people think and act, challenging each others' assumptions in order to build shared understanding. Personal Mastery is selfawareness on how much we know about ourselves and the impact our behaviour has on others. Team Learning is 'thinking together’, the power of sharing their experience, insights, knowledge and skills with each other about how to do things better. Systems thinking is a way of seeing the connections, links, or relationships between things that helps to uncover the connections, underlying assumptions, complex situation, and or invisible conditions with in organisation. Practically, to be a learning organisation, it is in this paper argued that an organisation needs to create a climate where the employees trust to each other (Tjakraatmadja and Lantu, 2006). In such an organisation, it is also expected that the employees have mind-set and habits toward learning (Tjakraatmadja and Lantu, 2006). Facilities that ease learning need to be provided by the organisation. Such facilities may be in forms of such as library, internet connections, IT system, meeting rooms. Because to create a learning organisation requires a systematic approach at the level of organisation, as described above, it needs to be underlined that leaders’ commitments play a critical role in the establishment of learning organisation.
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 Knowledge Management Knowledge Management (KM) can be defined as a systematic approach for managing (e.g., create, acquire, transfer/share and utilise) knowledge. It also includes an approach to provide relevant information/ knowledge for employees to facilitate them performing their tasks as being are expected (Tjakraatmadja and Lantu, 2006). Knowledge can basically be categorised into two types, which are explicit and tacit (Polanyi, 1966). Explicit knowledge is a type of knowledge that is articulated in forms of such as printed documents (e.g., books, papers, and drawings), tools/ prototype, audio visual materials, or encoded in databases. Tacit knowledge is a type of knowledge that is not yet documented or materialised. It is still attached for example in individuals’ minds. Because a task (e.g., product development) that is performed in an organisation typically involves more than one individual, it is challenging to communicate among the workers when involving tacit knowledge. Therefore, it is argued that some of individuals’ tacit knowledge needs to be converted into explicit knowledge to ease such communications (Nonaka, 1995). The KM literature typically presents and discusses three elements: People, Process, and Technology. When implementing KM, corporates tend to over emphasise on utilising technologies such as IT systems in their organisation. It is in this paper argued that while technologies may support the implementation of KM; nevertheless, corporates need to pay more attention on such as educating people on the implementation of KM. It is because people are the subjects of the KM implementation. Furthermore, the processes (ways, methods) on how knowledge is created shared and utilised need to carefully managed (Tjakraatmadja and Lantu, 2006) by the corporate.  Innovation Management Innovation management is a management on how to organise a process of innovation (Tidd and Bessant, 2009). In this context, innovation is defined as a new idea that has been implemented in a system (e.g., production system) or introduced in a market (Kelly and Kranzburg, 1978). Innovations can be in forms of such as product, process, and business model (Oslo Manual, 2005). Innovations can be driven by technology push or market pull. In a case where innovations are driven by technology (i.e., technology push), it is technology that determines for example the performance and attributes of a product (c.f., Pavitt, 1984; Brem,A. and Voigt,K-I., 2009). Customers are in a position to adopt the new product without strong involvements in the development process of the product. In a case where innovations are driven by market (market pull), the process of innovation is typically started by exploring customers’/ users’ needs. It is customers’/ users’ need that drive firms to produce products to meet the needs (cf., Lundvall, 1992). Whether it is a technology push or market pull, corporates expect that innovations can provide competitive advantages and economic growth (revenues) for the corporate (Drucker, 2012). 4. A Proposed Conceptual Framework of Corporate University As being presented above, literature defines Learning Organisation as an organisation that facilitates learning for their employees in order the organisation to be competitive. The literature on Knowledge Management typically focuses on knowledge creation, acquisition, sharing and utilisation. The literature on Innovation Management typically focuses on how such as new ideas, products and processes are developed and commercialised by corporates, through which the corporates gain competitive advantages and revenues. It is in this paper proposed a concept of corporate university by incorporating the concepts of Learning Organisation, Knowledge Management and Innovation Management. It is in this paper argued that a corporate university needs to be in a spirit in which knowledge is organised and capitalised by the corporate into innovations that can provide the corporate’s competitive advantages and revenues. A proposed conceptual framework of corporate university is depicted in Figure 1. To make a corporate university supporting the corporate delivering innovations, it is argued here that the university needs to have trust culture and learning habit as a foundation. Knowledge workers and learning facilities are the pillars to make the corporate becomes a learning
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orrganisation. In a case whhere a corporrate universityy that has beecome a learn ning organisaation incorporrates itself wiith Knowledge K Maanagement, it is in this papeer argued that such an organ nisation poten ntially deliverss innovations.
Figure 1: A proposed p conc eptual framew work of corporrate universityy Itt is in this paper suggested that t corporate university neeeds to be guid ded by the folllowing principples (Meister, 1998):  Top leaderss’ commitmennt Top leaderss’ commitmennt is argued veery important in the establisshment of corrporate univerrsity. The com mmitment can be expressed thhrough sendinng a strong, explicit e signall to employeees that establisshing corporaate university is a priority for f the organisaation. Leaderss must ensure in providing rright people fo or the corporaate university. Furthermore, leaders need to ensure that the selected people p put actiivities related to the corporaate university as a priority.  Learning ass the spirit It is in this paper arguedd that corporatte university nneeds to be an n organisation n where peoplle with the orrganisation haave learning spiirit and skillss, which learn ning is perform med in a conttinuous basis.. In such an oorganisation, learning can be conducted iindividually or performed in n a group throough knowled dge sharing. Th hrough such leearning, (new w) organisationnal knowledge can be createed or rejuvenaated, by whichh the organisaation can stren ngthen its com mpetitive advaantages througgh sustainable innovation prrocess.  Knowledgee workers Knowledgee workers can be considereed as key sourrces of expliccit and tacit kn nowledge. It is in the know wledge workeers reside thosee two types off knowledge. Therefore, T it i s argued in th his paper that managing m prooperly the knowledge workeers are essentiaal because theey are the mo ost importantt and significant assets forr organisationns. It is particcularly the caase because thee majority off knowledge is i in a form of tacit know wledge ratherr than explicitit knowledge (arguably 800% compared too 20%).  Knowledgee sharing It is in this paper contennded that corp porate universsity requires stakeholders’ s commitmentss for using an nd sharing theeir knowledge. Knowledge sharing can be b conducted through dialo ogues or conv versations. It cannot be managed througgh
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debates. It is argued that through dialogues, the involved people can appreciate the information/ knowledge conveyed, while in debates it is usually the involved people are in a position to defeat each other. Furthermore, it also needs to be underlines that the more an organisation knows of what its members know, the better the organisation can perform its task/ achieve its goal.  People oriented (not a computer/ IT system oriented) It is typical that organisation equalises corporate university to IT/ computer systems. It is however argued in this paper that when establishing a corporate university, organisation has to focus more on people rather than IT/ computer systems. Efforts toward the establishment of such a university need to be prioritized in developing the people with regard to both soft skills including value, culture and attitudes; and hard skills including specific knowledge and abilities for success in job. Besides focusing on the people, organisation also needs to develop systems that includes policy and procedures; and technology that includes such as computer and management information system.  Knowledge stock and flow system It is argued that organisation needs to stock knowledge and flow it through system. Learning process in an organisation can be managed to go through three phases, which are learning before, learning during and learning after. In the learning before phase, the organisation can assess explicit knowledge that is beneficial from external sources before use itfor certain purpose/ task. By incorporating the external explicit knowledge to the task, the organisation may learn something new during the completion of the task. This can be considered as the learning during phase. By learning something new, it can be said that the organisation develop new knowledge, which latter can be share among the employees. After the task has been performed, the organisation can reflect the process and try to find lessons-learnt. This can be categorized into the learning after phase.  The creation of new knowledge and new value The goal of corporate university needs to be aligned with the desired organisational performance/ results (e.g. the creation of a new product that offers a new value for users/ customers). The decision of the organisationon what new knowledgeessentially needs to be developed in order to be ableto create a new value has to be based on the evaluation what the organisation knows and what organisation must know if the organisation needs to create that new value. Besides evaluating the required knowledge to be created, the organisation also needs to decide what activities (e.g., product development) that need to be conducted through which the new knowledge can be created and utilised.  Continuous efforts concerning Knowledge Management It is in this paper contended that corporate university needs to continuously engage with Knowledge Management efforts. When Knowledge Management programme is firstly introduced by an organisation, employees may perceive either positively or sceptically. In case some of the employees have been accepted the programme, they may contribute to the programme by recommending other employees to involve. When the employees have accepted and involved in the programme, it can be expected that knowledge sharing in the organisation is latter driven by personal motivations and beliefs. The individuals may then internalized the knowledge resulted from the knowledge sharing. When knowledge sharing is widely practiced in the organisation, it can be expected that knowledge is institutionalised in the organisation. If it has occurred, it can be said that knowledge management has been incorporated into the organisations’ routines.  Political agendas for getting supports and conducting collaborations It is argued that the establishment of a corporate university involves a wide range of stakeholders. To get supports and conduct collaboration among the stakeholders, it is therefore important communicate and convince them. They may include the stakeholders from within the organisations such as the superordinate, colleagues and subordinates. There may involve the stakeholders from outside the organisation such as suppliers and customers that can contribute in creating values with regard to innovations. Furthermore, it is also important to communicate clearly about the benefits that the stakeholders may obtain. For that, developing criteria for measuring the benefits are then necessary.
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5. Conclusion This paper has introduced and discussed on a conceptual framework of corporate university. The concept has been developed by incorporating the concepts of Learning Organisation, Knowledge Management and Innovation Management. The basic idea of the proposed framework is that a corporate university needs to be organised in a way where the knowledge creation, sharing and utilisation are managed by a corporate in order to leverage innovations. It is expected that such innovations provide competitive advantages and revenues for the corporate. Furthermore, the framework provides guidance concerning basic principles and steps that suggestively need to be implemented when organising a corporate university.
References Allen, Mark. (2002). “The Corporate University Handbook.” New York: AMACOM. Brem,A.and Voigt,K-I. (2009). 'Integration of market pull and technology push in the corporate front end and innovation management—Insights from the German software industry'. Technovation 29 (2009). pp 351-367 Drucker, Peter. (2012). 'Innovation and Entrepreneurship'. Routledge Kelly, P. and Kranzburg M. (1978). Technological Innovation: A Critical Review of Current Knowledge. San Francisco: San Francisco Press. Lundvall, B-Å 1992b. User-producer relationships, national systems of innovation and internationalisation. In National Systems of Innovation: Towards a Theory of Innovation and Interactive Learning, ed. B.-Å. Lundvall, pp. 45–67. London: Pinter. Meister, Jeanne C. (1998). Corporate Universities: Lessons in Building a World-class Work Force. McGraw-Hill. ISBN 978-0-7863-0787-6. Nonaka, Ikujiro; Takeuchi, Hirotaka (1995), The knowledge creating company: how Japanese companies create the dynamics of innovation, New York: Oxford University Press, p. 284, ISBN 978-0-19-509269-1 Oslo Manual. (2005). “Oslo Manual: Guidelines for Collecting and Interpreting Innovation Data”, 3rd Edition. ISBN 978-92-64-01308-3 Pandey and Sharma. (2010). “Corporate University. Motorola University”. Accessed 6 Oktober 2014. http://www.slideshare.net/umapandey/corporateuniversity Pavitt, K., 1984. Sectoral patterns of technical chance towards a taxonomy and a theory. Research Policy 13 (6), 343–373. Polanyi, Michael. (1966). “The Tacit Dimension”. New York: Doubleday Senge, Peter M. (1990), The Fifth Discipline, New York: Doubleday, ISBN 0-385-26094-6 Sindo, Koran. (2013). “Empat BUMN Bentuk Corporate University”. Accessed 6 October 2014. http://www.koran-sindo.com/node/301052” Telkom, University. (2013). “Sejarah Telkom University”. Accessed 6 October 2014. http://www.telkomuniversity.ac.id/index.php/page/history Tjakraatmadja and Lantu. (2006). “Knowledge Management dalam Konteks Organisasi Pembelajar”. SBM-ITB. Bandung Tidd, Joe and Bessant, John (2009). Managing Innovation: Integrating Technological, Market and Organizational Change 4e - first ed. with Keith Pavitt. Chichester: Wiley.
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Analysis and Implementation of Information Security through Quality Standards ISO 27001 for Internet Services Lidya V. Neaxie, Khairani R. Siregar* Faculty of Economics and Business, Telkom University Bandung Technoplex South Campus, JL. Telekomunikasi, Terusan Buah Batu Bandung, West Java 40257, Indonesia
Abstract Nowadays, industry that focuses on information security is increasing. Internationally recognized ISO 27001 is a standard that is agreed upon to be a standard management of information security that is applied to the cross-industry. ISO 27001 not only emphasizes the security of information, but also the company's business processes. This study aims to determine the management of the implementation of the security standards for providing information at PT. Telkom internet services that uses the ISO 27001 standard as a case study. This study used qualitative methods to conduct observations and interviews. The results showed that the threats and security risks that occurred when PT. Telkom provided internet information and was attacked by many kinds of hacking types and duration of different attacks. Government website attacks were highlighted at the General Elections Commission (KPU), these attacks violated the security aspects of information, so that it needs recovery and appropriate treatment. Therefore, the recommendations that can be given in this research, is to improve the implementation of information security standard for the internet service of PT. Telkom.
© 2014 Lidya V. Neaxie, Khairani R. Siregar. Published by Telkom Pub. Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia. Keywords: Information security; ISO 27001; internet services; security network: quality standard
1. Introduction Over the past few years, the increase in the use of technology and the rise in interconnected systems and networked environment, data and information have made the enterprises try to implement IT service management standards in order to provide better IT services to their users and clients for better support in their strategic organizational goals. At the same time, the increased use of technology is now being exposed to a rising number of threats and vulnerabilities. Therefore, it has become a necessity for an organization to have an efficient information security management system. [1]. Safety standard adoption that related was initiated in a variety of reasons such as the desire to reach a wider market, according to the applicable regulations, or awareness of the importance of information security management for internal enterprise. ISO 27001 that is agreed as standard management information security is applied to the cross-industry and recognized internationally. One of the local regulation of the banking industry, Bank Indonesia Regulation (PBI) 9/15/2007 requires PBI Data Center and or DRC is located in the country. It encourages so many service providers Data Center and Data Recovery Center locally, such as Biznet, Telkom Sigma, CBN, IDC, CSM, Lintasarta, Omadata, Collega, Indosat, Visionet, and others. This standard was applied to the providing Internet services division who managed IP Security Network and Services PT. Telkom, to support the business process and to make sure how the information security infrastructure was managed so that the internet services can be provided to customers with fast quality data access and free from distractions. The necessity to ensure data and information is essential for the company, especially PT. Telkom as one
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state-owned telecommunications company that provides Internet provider for corporate companies which require security information when performing transactions and access data using the Internet VPN-IP services and Metronet as services of PT. Telkom. Enterprises that become customers of Telkom were aware that when they are using services from Telkom, what they need is warranted data security and data transaction services and it needs a guaranteed, so PT. Telkom has the initiative to be certified as ISO 27001 as a requirement for information security standard. 2. Method
2.1. Qualitative Method This study used qualitative methodology to analyze the implementation of information security standard through ISO 27001. Kirk and Miller quoted in Moleong [2] defined that qualitative study is a particular tradition in social science which fundamentally depends on human observation towards their own field pertaining to the people within the field and their own terms. The aims of qualitative study was in line with the research questions since the aims of descriptive qualitative study is to answer what has been explained in the research questions.
2.2. Descriptive Method. The aim of descriptive qualitative study is to decide on how to manage the result of a study by making the analysis units through qualitative descriptive research method. The research method used in this thesis was descriptive method, namely by finding facts through proper interpretation. Data collection method that is used involved primary data including structural interview, nonparticipant observation as well as secondary internal data from a company [3]. The results were categorized according to the interview questions and grouped into the formulation of research problems that had been defined previously, as well as the results of observations for the exploration such as an interview and supporting documents research results.
2.3. Model Control ISO 27001 ISO/IEC 27001 is an information security management system (ISMS) standard published by The International Organization for Standardardization (ISO) and international electrotechnical commission (IEC) [4]. The improvement and further development of the International Security Management System (ISMS) is to be implemented continuously, based on the security policy, the logging and evaluation of operations, the results of testing as well as the results from improvement measures. In addition the improvement and further development should be pushed forward through regular internal audits. Adequate implementation of the security policy as well as its suitability and completeness are to be assured through annually management reviews [5]. Table 1 shows the control objectives ISO 27001 that must be implemented through standard.
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Analysis and Implementation of Information Security through Quality Standards ISO 27001 for Internet Services Table 1. Model Control of ISO/IEC 27001 [5]
Domain Security policy
Organization of information security
Asset management
Human resources security
Physical and environmental security
Communications and operations management
Access control
Information systems acquisition, development and maintenance
Information systems acquisition, development and maintenance
Control objectives To provide management direction and support for information security in accordance with business requirements and relevant laws and regulations. To manage information security within the organization To maintain the security of the organization’s information and information processing facilities that are accessed, processed, communicated to, or managed by external parties. To achieve and maintain appropriate protection of organizational assets. To ensure that information receives an appropriate level of protection. To ensure that employees, contractors and third party users understand their responsibilities, and are suitable for the roles they are considered for, and to reduce the risk of theft, fraud or misuse of facilities. To ensure that all employees, contractors and third party users are aware of information security threats and concerns, their responsibilities and liabilities, and are equipped to support organizational security policy in the course of their normal work, and to reduce the risk of human error. To ensure that employees, contractors and third party users exit an organization or change employment in an orderly manner To prevent unauthorized physical access, damage and interference to organization’s premises and information. To prevent loss, damage, theft or compromise of assets and interruption to the organization’s activities. To ensure the correct and secure operation of information processing facilities. To implement and maintain the appropriate level of information security and service delivery in line with third party service delivery agreements To minimize the risk of systems failures. To protect the integrity of software and information. To maintain the integrity and availability of information and information processing facilities. To ensure the protection of information in networks and the protection of the supporting infrastructure. To prevent unauthorized disclosure, modification, removal or destruction of assets, and interruption to business activities. To maintain security of information and software exchanged within an organization and with external entities. To ensure the security of electronic commerce services, and their secure use. To detect unauthorized information processing activities. To control access to information. To ensure authorized user access and to prevent unauthorized access to information systems. To prevent unauthorized user access, compromise or theft of information and information processing facilities. To prevent unauthorized access to networked services. To prevent unauthorized access to operating systems. To prevent unauthorized access to information held in application systems. To ensure information security when using mobile computing and teleworking facilities. To prevent unauthorized access to networked services. To control access to information. To ensure authorized user access and to prevent unauthorized access to information systems. To prevent unauthorized user access, compromise or theft of information and information processing facilities. To prevent unauthorized access to networked services. To prevent unauthorized access to operating systems. To ensure that security is an integral part of information systems. To prevent errors, loss, unauthorized modification or misuse of information in applications. To protect the confidentiality, authenticity or integrity of information by cryptographic means.
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The 2nd International Seminar & Conference on Learning Organization Proceedings To ensure the security of system files. To maintain the security of application system software and information. To reduce risks resulting from exploitation of published technical vulnerabilities. To ensure information security events and weaknesses associated with information systems are communicated in a manner allowing timely corrective action to be taken. To ensure a consistent and effective approach is applied to the management of information security incidents. To counteract interruptions to business activities and to protect critical business processes from the effects of major failures of information systems or disasters and to ensure their timely resumption. To avoid breaches of any law, statutory, regulatory or contractual obligations, and of any security requirements. To ensure compliance of systems with organizational security policies and standards. To maximize the effectiveness of and to minimize interference to/from the information systems audit process.
Information security incident management
Business continuity management
Compliance
3. Results and discussions
3.1. ISO 27001 implementation The implementation of information security standard especially ISO 27001 at PT. Telkom can be clearly seen in IP Security Network and Services section since the operational for security of internet provider is managed by this section. Table 2 show some findings taken from internal audit towards the implementation of ISO 27001. No.
Section
Table 2. Internal audit ISO 27001 result Location Clausal
Finding
1.
Jabar lembong
NMS Diva Room
A.11
2.
Jabar lembong
NMS Diva Room
A.11.
3.
Jabar lembong
NMS Diva Room
A.9.
4.
Jabar lembong
NMS Diva Room
A.9.
5.
Jabar lembong
Trunk GW Room
A.10
Leak above DSLAM collected in water gutter No Security Post Unlocked door Attached configuration chart
6.
Jabar lembong
Trunk GW Room
A.11
Unlocked shelves
7.
Jabar lembong
NGN Room
A.6
NoLog Book
8.
Jabar lembong
Division
A.11
No first UAR
9.
Jabar lembong
Division
A.6
10.
Jabar lembong
Division
A.10
11.
Jabar lembong
NGN Room
A.11
12.
Jabar lembong
Trunk GW Room
A.6
No telepon numbers of third parties as OLO, DJPT, Divisi Lain, Vendor etc, No note on DRP Infratel document No procedure on how to secure interconnected configuration chart PC in software room has no screen saver equipped with password No Log Book
13.
Jabar lembong
NGN Room
A.11
Unlocked shelves
14.
Jabar lembong
Division
A.11
15.
Jabar lembong
Collocation Room
A.9
The character numbers and combination of letters and numbers should be in accordance with KD57 1. Fiber Driver, Portion Adaptor and Spare Cable was arranged disorderly, potential for mechanic and electric problems
20
MSAN set, paper recording user name and password Unlocked shelves
Analysis and Implementation of Information Security through Quality Standards ISO 27001 for Internet Services No. 16.
Section
Location
Jabar lembong
Clausal
Collocation Room
A.11
Finding 2. Power and data cable are still in 1 1 tray
Table 3. IP Addresses attacked
SEVE RITY
SIZE
THRE SHOL D
STAT US
Yello w
55.83 Kpps
over 20.00 Kpps
Recove red
Yello w
2.29 Kpps
over 2.00 Kpps
Recove red
Yello w
2.10 Kpps
over 2.00 Kpps
Recove red
Yello w
2.03 Kpps
over 2.00 Kpps
Recove red
Yello w
2.10 Kpps
over 2.00 Kpps
Recove red
Yello w
2.23 Kpps
over 2.00 Kpps
Recove red
Yello w
2.05 Kpps
over 2.00 Kpps
Recove red
Yello w
2.12 Kpps
over 2.00 Kpps
Recove red
Yello w
2.13 Kpps
over 2.00 Kpps
Recove red
Yello w
2.00 Kpps
over 2.00 Kpps
Recove red
Yello w
2.07 Kpps
over 2.00 Kpps
Recove red
Red
35.48 Kpps
over 20.00 Kpps
Recove red
Yello w
2.00 Kpps
over 2.00 Kpps
Recove red
Yello w
2.36 Kpps
over 2.00 Kpps
Recove red
TIME
07-15 00:00 to 07-15 00:04 07-15 00:00 to 07-15 00:06 07-15 00:01 to 07-15 00:07 07-15 00:02 to 07-15 00:08 07-15 00:02 to 07-15 00:10 07-15 00:03 to 07-15 00:09 07-15 01:25 to 07-15 01:31 07-15 01:25 to 07-15 01:31 07-15 01:27 to 07-15 01:33 07-15 01:28 to 07-15 01:39 07-15 01:29 to 07-15 01:35 07-15 01:30 to 07-15 01:50 07-15 01:31 to 07-15 01:37 07-15 01:32 to 07-15
DURA TION
TYPE
REMA RK
TYPE ATTACK
RESO URCE
RESOURCE IP
4 mins
Incomi ng
Protoc olMisuse
TCP SYN Flooding
NonHome
192.126.122.81
6 mins
Outgoi ng
TCP PORT SCAN
Telko msel
114.127.220.200
6 mins
Outgoi ng
TCP PORT SCAN
Telko msel
114.127.220.252
6 mins
Outgoi ng
TCP PORT SCAN
Telko msel
114.127.220.160
8 mins
Outgoi ng
TCP PORT SCAN
Telko msel
114.127.220.162
6 mins
Outgoi ng
TCP PORT SCAN
Telko msel
114.127.220.234
6 mins
Outgoi ng
TCP PORT SCAN
Telko msel
114.127.220.151
6 mins
Outgoi ng
TCP PORT SCAN
Telko msel
114.127.220.160
6 mins
Outgoi ng
TCP PORT SCAN
Telko msel
114.127.220.145
11 mins
Outgoi ng
TCP PORT SCAN
Telko msel
114.127.220.173
6 mins
Outgoi ng
TCP PORT SCAN
Telko msel
114.127.220.228
20 mins
Incomi ng
TCP SYN Flooding
NonHome
119.188.132.73
6 mins
Outgoi ng
TCP PORT SCAN
Telko msel
114.127.220.198
6 mins
Outgoi ng
TCP PORT SCAN
Telko msel
114.127.220.151
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Applic ation Anoma ly Applic ation Anoma ly Applic ation Anoma ly Applic ation Anoma ly Applic ation Anoma ly Applic ation Anoma ly Applic ation Anoma ly Applic ation Anoma ly Applic ation Anoma ly Applic ation Anoma ly Protoc olMisuse Applic ation Anoma ly Applic ation Anoma
The 2nd International Seminar & Conference on Learning Organization Proceedings 01:38 Yello w
2.07 Kpps
over 2.00 Kpps
Recove red
07-15 01:33 to 07-15 01:39
ly
6 mins
Outgoi ng
Applic ation Anoma ly
TCP PORT SCAN
Telko msel
114.127.220.206
Table 2 has some findings that should be followed up pertaining to the implementation of information security standard. Some of actions towards the findings can be taken in accordance with the objective controls stated in ISO 27001 especially for a certain rooms such as NGN (Next Generation Network) that there are still frequent cases that it needs to be followed up in order to maintain the information security in the division. In ISO 27001, there are some groups of clause which controls the implementation of information security including clausal A.11 on physical security of computer information asset. The implementation of clausal A.11 on the information asset security physically can be seen in center data room, server room at STO Lembong Bandung. All security standard physically has been well implemented, reflected from the availability of SOP in security by security officers, log book recording those who enter to and exit from the server room, fingerprint or card so that there are only authorized personnel who can enter the server room. Those who are going to enter the room, however, have to be accompanied by officers. Server room itself has been equipped with humidity control equipment, coolers, fire extinguishers, and CCTVs. Cable management and raised floor system are also implemented so that cables are installed neatly. The information standard has not been implemented either in all rooms or in STO offices since it still needs some material and non-material readiness. Therefore, the control has not been fully applied in all STO offices at PT. Telkom. In accordance with the policies, there are eight telecommunication areas of which information system have been ensured or certified by ISO 27001. Objective control A.13 pertaining to communication security is clearly reflected in the monitoring process towards IP Address on internet service of PT. Telkom and monitoring to packet data transaction. The monitoring itself is conducted within work hours. If there is any trouble such as an attack that hit Komisi Pemilihan Umum (KPU) website, there will be 24 hour monitoring shifts or monitoring center, which is carried out conditionally. Furthermore, it also has vulnerability testing and security action towards software used as well as computer security so that they can prevent virus and malware attacks. All of them have been implemented and can be clearly revealed in IP Security Network and Services. Securing information system resources is extremely important. It is imperative for organizations to use an information security management system (ISMS) to effectively manage their information assets. ISMS is basically consist of sets of policies put place by an organization to define, construct, develop and maintain security of their computer based on hardware and software resources. These policies dictate the way in which computer resources can be used [6].
3.2. Internet service problem and attacks The field of information security has grown and evolved in recent years because of the rapid growth and widespread use of electronic data processing and electronic business conducted through the Internet and other computer networks [7]. Via internet infrastructure, hosts can not only share their files, but also complete task cooperatively by contributing their computing resources. Moreover, an end hosts can easily join the network and communicate with any other host by changing packets [8]. UDP is a connectionless protocol and it does not require any connection setup procedure to transfer data. A UDP Flood Attack is possible when an attacker sends a UDP packet to a random port on the victim system. When the victim system receives a UDP packet, it will determine what application is waiting on the destination port. When it realizes that there is no application that is waiting on the port, it will generate a packet of destination unreachable to the forged source address. If enough UDP packets are delivered to ports on victim, the system will go down [7]. Table. 3 explains the record captured by monitoring consisting some IP Addresses attacked, kind of attacks and the duration below:
In UDP flood attack attacker sends large number of UDP packets to a victstim system, due to which there is saturation of the network and the depletion of available bandwidth for legitimate service request to the victim systems [8]. Problems and attacks that recently hit the security system was the attack from hackers to Komisi Pemilihan Umum (KPU) can be seen at Table 4. Record attack of KPU site below:
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Analysis and Implementation of Information Security through Quality Standards ISO 27001 for Internet Services Table 4. Record attack of KPU site SEV ERI TY
SIZE
THRESH OLD
STATU S
TIME
DURATI ON
TYPE
REMAR K
TYPE ATTAC K
RESOU RCE
RESOURCE IP
Red
706.70 Mbps
over 200.00 Mbps
Recove red
07-10 17:02 to 07-10 17:48
46 mins
Incomi ng
ProtocolMisuse
UDP Flooding
Telkom IP Transit
103.21.228.212
Red
691.48 Mbps
over 200.00 Mbps
Recove red
07-10 17:52 to 07-10 18:14
22 mins
Incomi ng
ProtocolMisuse
UDP Flooding
Telkom IP Transit
103.21.228.212
Red
703.97 Mbps
over 200.00 Mbps
Recove red
07-10 18:15 to 07-10 18:27
12 mins
Incomi ng
ProtocolMisuse
UDP Flooding
Telkom IP Transit
103.21.228.212
Red
693.71 Mbps
over 200.00 Mbps
Recove red
07-10 18:28 to 07-10 18:40
12 mins
Incomi ng
ProtocolMisuse
UDP Flooding
Telkom IP Transit
103.21.228.212
Yell ow
10.25 Kpps
over 10.00 Kpps
Recove red
07-10 18:38 to 07-10 18:43
5 mins
Incomi ng
ProtocolMisuse
TCP RST Flooding
Telkom IP Transit
103.21.228.212
Yell ow
12.37 Kpps
over 10.00 Kpps
Recove red
07-10 19:18 to 07-10 19:21
3 mins
Incomi ng
ProtocolMisuse
TCP RST Flooding
Telkom IP Transit
103.21.228.212
Red
688.02 Mbps
over 200.00 Mbps
Recove red
07-10 19:21 to 07-10 19:55
34 mins
Incomi ng
ProtocolMisuse
UDP Flooding
Telkom IP Transit
103.21.228.212
Red
693.26 Mbps
over 200.00 Mbps
Recove red
07-10 20:12 to 07-10 21:28
1 hour 16 mins
Incomi ng
ProtocolMisuse
UDP Flooding
Telkom IP Transit
103.21.228.212
Red
688.36 Mbps
over 200.00 Mbps
Recove red
07-10 21:41 to 07-10 23:02
1 hour 21 mins
Incomi ng
ProtocolMisuse
UDP Flooding
Telkom IP Transit
103.21.228.212
Red
677.73 Mbps
over 200.00 Mbps
Recove red
07-10 23:03 to 07-10 23:27
24 mins
Incomi ng
ProtocolMisuse
UDP Flooding
Telkom IP Transit
103.21.228.212
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The 2nd International Seminar & Conference on Learning Organization Proceedings
Red
603.61 Mbps
over 200.00 Mbps
Recove red
07-11 00:27 to 07-11 00:51
24 mins
Incomi ng
ProtocolMisuse
UDP Flooding
Telkom IP Transit
Red
695.29 Mbps
over 200.00 Mbps
Recove red
07-11 01:47 to 07-11 01:58
11 mins
Incomi ng
ProtocolMisuse
UDP Flooding
Telkom IP Transit
746.18 Mbps
over 200.00 Mbps
Recove red
07-11 02:46 to 07-11 02:58
12 mins
Incomi ng
ProtocolMisuse
UDP Flooding
Telkom IP Transit
Red
103.21.228.212
103.21.228.212
103.21.228.212
Table 4 shows the record of website attack that was started from Thursday, July 10, 2014, one day after the presidential election using PT. Telkom service network. The following day, KPU website had some flooding and could not be accessed. Thus, there were many users who complained on this that they could not access information as for scanning the result and the election real count. To handle this case, IP Security Network and Services did some corrective actions by building a center in monitoring traffic of packages addressed to KPU IP Address as well as monitoring traffic on other sites within 24 hours until July 22, 2014, when the election result was legally released by Badan Komisi Pemilihan Umum. From table 4 the KPU site had approximately thirteen attacks since July 10, 2014. The monitoring showed that there were some attacks that made KPU site could not be accessed. The longest attack was noted to be an hour attack and it was directly followed up by Telin Indonesia. Table 4 shows the record of monitoring result for the IP Address of Komisi Pemilihan Umum (KPU). This kind of attack is very vulnerable happened to KPU site since KPU site needs data package and information that include some result that is dangerous for information service, the longest attack for an hour clearly made the site failed to be accessed. It can be concluded that KPU site was mostly attacked by UDP Flooding. Therefore, there should be some monitoring towards IP Address passing through internet services at PT. Telkom or some alarm installations as well as notification towards more than one hour attacks. However, the monitoring that is conducted to the present time has not been equipped with tools such as alarm and notification that can remind long attacks. Result from this ISO 27001 study has been implemented properly in PT. Telkom. ISMS is an approach to protecting and managing data based on a systematic method to establish, implement, operate, monitor, review, maintain, and improve of information security. The steps of establishing ISMS explained as: defining the scope, planning, ISMS policies, risk assessment, risk treatment, selecting the management controls and preparing statement of applicability (SoA) by establishing the relevance between the securities of information in this case the internet service with possible threats and appropriate information security standards, we have set the foundation for future research. The effectiveness of ISO 27001 is preventing or minimizing the exposure to information security incidents in the real world. In a scenario where there has been so much investment in adopting the framework and subsequent certification resulting in high levels of stakeholder assurance, the focus is to identifying the areas where it is effective. But more importantly, it also focuses on the areas where there are gaps, leading to information security risks and/or an incident even in a situation where the framework is adhered to and certification against it exists [9]. Plans to adopt ISO 27001 must be supported by a concrete business analysis that involves listing the primary business objectives and ensuring a consensus is reached by key stakeholders. Business objectives can be derived from the company's mission, strategic plan, and existing IT goals and may include: ensuring effective risk management, such as identifying information assets and conducting accurate risk assessments, and maintaining the company's competitive advantage. Moreover, if the industry as a whole deals with sensitive information , the objectives can be derived by preserving the organization's reputation and standing among industry leaders, providing assurance to customers and partners about the organizations commitment to protecting data, increasing the company's revenue, profitability, and savings in areas where protective controls operate well [10].
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Analysis and Implementation of Information Security through Quality Standards ISO 27001 for Internet Services
4. Conclusion Generally, the implementation of information security standard through ISO 27001 at PT Telkom can be seen especially in IP Security Network and Services section. The implementation of the ISO 27001 information security standard is either in accordance with director board’s decision or in order to have some added values for the company in the competition and to ensure all costumers of Telkom internet service provider. The implementation of ISO 27001: 2013 security standards at PT Telkom has been well conducted and can be seen obviously on security points either physically or logically. The objective control in ISO 27001 has been well implemented. It can be seen on the business process at IP Security Network and Services section. Most of PT. Telkom internet service of which the information security has been ensured are internet service corporate customers including Astinet, VPN-IP and Metro. Customers need good quality of internet service without any cut to support their business, including communication and private data package delivery. Problems and attacks that hit the PT. Telkom internet provider include UDP Flooding that had once attacked Komisi Pemilihan Umum (KPU) for few days in uncertain time caused some access failure towards the site. UDP Flooding is a connection less attack, which neglected the delivery of a package whether it can be received or not since the system is flooded with useless characters.
References [1] Ali, S.M., Soomro, T.R., 2014. Integration of Information Security Essential Controls into Information Technology Infrastructure Library – A Proposed Framework, International Journal of Applied Science and Technology, Vol. 4 No. 1; pp 95-96. [2] Kirk and Moleong [3] Creswell., 2014., Research Design : Qualitative, Quantitative, and Mixed Methods Approaches) 4th edition. Sage Publication. [4] Pelnekar,C., 2011. Planning for and Implementing ISO 27001, ISACA Journal, Vol 4, pp 28. [5] Disterer, G., 2013. ISO/IEC 27000, 27001 and 27002 for Information Security Management, Journal of Information Security, Vol.4, pp 92-100. [6] Susanto, H., Almunawar, M.N., Tuan, Y.C., 2011. Information Security Management System Standards: A Comparative Study of the Big Five, International Journal of Electrical & Computer Sciences IJECS-IJENS, Vol: 11 No. 05, pp 113505-6969. [7] Duraiswamy, K., Palanivel, G., 2010. Intrusion Detection System in UDP Protocol, IJCSNS International Journal of Computer Science and Network Security, Vol.10, No.3. [8] Al Musawi, B. Q. M., 2012. Mitigating DoS/DdoS Attacks Using Iptables, International Journal of Engineering & Technology IJET-IJENS Vol: 12 No. 03. [9] Toosarvandani, M. S., Modiri, N., Afzali, M., 2012. The Risk Assessment and Treatment Approach in Order to Provide Lan Security Based On ISMS Standard. International Journal in Foundations of Computer Science & Technology (IJFCST), Vol. 2, No.6. [10]Sharma, N. K., Dash, P. K., 2012. Effectiveness Of ISP 27001, as an Information Security Management System : An Analytical Study Of Financial Aspects, Far East Journal of Psychology and Business, Vol. 9 No. 3.
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Analysis on Prediction of e-procurement Adoption using Technology Acceptance Model (TAM) in SMEs (Case Study in Sentra Sablon Suci Bandung in 2014)
Ratih Hendayani*, Muhammad Amiruddin Faculty of Economics and Business, Telkom University, Jl. Telekomunikasi No.1 Terusan Buah Batu, Bandung 40257, Indonesia
Abstract The purpose of this research is to predict the adoption of e-procurement through integrated construction of Technology Acceptance Model (TAM). In this study the method used was the descriptive causal method involving 220 people as respondents in the study sample with judgment sampling technique. The data analysis technique used is Structural Equation Model (SEM). The variables studied were ease of use (EOU), perceived usefulness, attitude toward using, and intention to use e-procurement. Based on the results, the study concludes: (i) the overall TAM variables in this study, which are EOU, perceived usefulness, attitude toward using, and intention to use e-procurement, are in good categories, (ii) the ease of use has positive effect on perceived usefulness, (iii) the ease of use and perceived usefulness simultaneously have positive effect on attitude toward using, (iv) the perceived usefulness and attitude toward using have positive effect on intention to use e-procurement, (vi) overall, this study resulted that TAM is not a good predictor of the adoption of e-procurement in Sentra Sablon Suci Bandung.
© 2014 Ratih Hendayani, Muhammad Amiruddin. Published by Telkom University. Selection and peer-review under responsibility of The ISCLO, Faculty of Economic & Business, Telkom University, 20342 Bandung, Indonesia. Keywords: E-Procurement, TAM (Technology Acceptance Model), SEM (Structural Equation Model), SMEs (Small Medium Enterprises)
1.
Introduction
The number of MSMEs (Micro, Small and Medium Enterprises) in Indonesia has increased from year to year. This significantly relates with the role of SMEs which are considered to absorb labor and its contribution to the Indonesia economy. The government includes a party that continues to expand business activities in the form of these SMEs, including in the government of Bandung city. One of the ways is by developing industrial centers in the Bandung city. Sentra Sablon Suci Bandung industrial center is considered to be very potential because it is one of the industrial centers that have a very large investment value. The use of technology in operational activities of SMEs today is a must. One of the technologies that can be used easily by SMEs is the internet. One of the internet applications which can be used as the potential to be utilized for the SMEs is e-procurement. This is the background of the author to do research on the prediction of e-procurement adoption in Sentra Sablon Suci Bandung using the approach of Technology Acceptance Model (TAM).
2.
Theoretical Framework, Previous Research, Methodology, and Hypothesis
2.1 Supply Chain Management Supply chain management is a systematic, strategic coordination of the traditional business functions within a particular company and across business within the supply chain for the purpose of improving long-term performance of the individual company and the supply chain as a whole. [1] There are some key activities that fall into the classification of SCM in the context of manufacturing, they are:
*Corresponding author, email address : [email protected]
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The 2nd International Seminar & Conference on Learning Organization Proceedings
a. b. c. d. e. f.
Product design activities (product development) Activities to obtain raw materials (procurement, purchasing, or supply) Production and inventory plan (planning & control) Activities of production (production) Activities of delivery / distribution (distribution) Management activities returning products / goods (return) [1]
2.2 Procurement Management Procurement Management is part of the Supply chain management, in which the systematic and strategic procurement processes from the sourcing of goods to the appropriate destination are based on the quality, quantity, price, time, source and place in order to meet customer needs. [2] Procurement Management acts as systematic process of determining what (specification, quality), when (schedule, delivery time), how (the source system), and how much (quantity) for procuring goods and services from the procurement till the source to be delivered to the destination after checking the quality and quantity, the optimal cost, and of supplying a reasonable time to meet the needs. [2]
2.3 E-Business E- business is the use of electronic networks (internet) and associated technologies to enable, improve, enhance, transform, or invent a business process or business system to create superior value for current or potential customers.[3] The forms of e-business relationships can be divided into two, they are business to business (b2b) and business to customer (b2c)
2.4 E-Procurement Electronic procurement (e-Proc) is the procurement of goods and services using electronic networks (internet or intranet network) or electronic data interchange (EDI). [2] The implementation of e-procurement itself can take many forms. For example, buying process using internet technology can be done in two forms; directly to suppliers via its website or with a special application provided by the company that makes the application of the e-procurement. [3]
2.5 Technology Acceptance Model (TAM) Technology Acceptance Model (TAM) is one of the theories that explain the technology acceptance model approach. TAM itself was originally introduced by Davis in 1985, and then he improves the TAM model by adopting the model developed by TRA acceptance Azjen (1975) in 1989. [4] Along with the times, many researchers were trying to modify the TAM model by adding some additional determinants into TAM as desired by researchers. [5] Perceived ease of use is defined as the degree to which a person believes that using the system can be free of mental effort, whereas perceived of usefulness is defined as the degree to which a person believes using the system can improve the performance. Based on TAM, these two elements affect one's attitude in using the system that measures the level of behavioral intention, which would lead to the use of the system. [6]
2.6 Previous Research There are several previous researches that are used as reference in this study. This research, among others, has first been conducted by Charlesto Sekundera in 2006 with the title' Analysis of End User Acceptance By Using The Technology Acceptance Model and End User Computing Satisfaction of the Implementation of Core Banking System In ABC Bank '. The result of the researches that are using TAM model with variable usefulness and ease of use has proven to affect the acceptance of the core banking system. By using the model of end user computing satisfaction (EUCS), it can be concluded that the variable accuracy, ease, and timeliness can affect the acceptance of the core banking system. However, the variables content and form do not affect the demand of core banking system at ABC Bank. [7]. The next research was made by Regina Eka in 2007, entitled 'Analysis Adoption of M-Banking Services by Bank Customers in Bandung in 2007 Using Technology Acceptance Model Approach (TAM)'. The result shows that the adoption of m-banking services in the
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Analysis on Prediction of e-procurement Adoption using Technology Acceptance Model (TAM) in SMEs (Case Study in Sentra Sablon Suci Bandung in 2014)
Bandung city is affected by all the variables of TAM, namely perceived usefulness, perceived ease of used, economic sacrifice, attitude toward using, behavior intention, and actual use [8]. Further research was made by Aboelmaged in 2010 with the title 'Predicting e-procurement Adoption in a Developing Country (An Empirical Integration of Technology Acceptance Model and Theory of Planned Behavior)”. The result shows that the proposed model has good explanatory power and confirms its robustness, with a reasonably strong empirical support in predicting users’ intentions to use eprocurement technology. Behavioral intention toward e-procurement technology is mainly determined by user’s attitude and is additionally influenced by perceived usefulness and subjective norm [6]. Next is the research by Rahmat Khafidin in 2013 entitled 'Identification of The Factors Usage CIMB Mobile Banking Services of Customers in Bandung City'. The results show that TAM factors are based on the development after the testing are grouped into three factors: content factor, risk factor, and time efficiency factor. Based on the dominant factors, the sequence is content factor, risk factors, time efficiency factor [5]. The last research was conducted by Boumediene Ramdani in 2013 with the title “SME's Adoption of Enterprise application A technology-organization-environment models”. The result indicates that technology, organization, and environment contexts have impacts on the SMEs' adoption of EA (Enterprise Application). This suggests that the TOE models are indeed a robust tool to predict the adoption of EA by SMEs [9]. In this research, the object that is used is the SME’s when the acceptance of new technology is usually used for big companies. When technology has been decided to be implemented, it has many challenges even for big companies. However, this research tries to discover the relation of technology, especially e-procurement, to the users who are the SME’s. In this research, the model used is SEM model that is proved to be one of the best methods.
2.7 Research Model
Attitude toward using
Perceived Ease of use
Intention to use eprocurement
Perceived of Usefulness Fig. 1. Research Methodology [6]
2.8 Research Methodology In this research the method used is the descriptive causal method. The research also involved 220 people as the respondents in the study sample with judgment sampling technique. The data analysis technique used was a Structure Equation Model (SEM). Variables studied in this research that were exogenous variables are ease of use (EOU), and there are three endogenous variables; perceived usefulness, attitude toward using, and intention to use e-procurement. The measurement scale used in this research is the scale intervals using a Likert scale with five technical criteria ranging from strongly disagree to strongly agree. The populations in this study performed in 2012 were 409 business people in Sentra Sablon Suci Bandung who do not use e-procurement in their operations. The samples of 220 people were encouraged to follow the provisions on data analysis techniques that were required by Structural Equation Modeling. The number of respondents was coupled with a minimum of 200 respondents, whereas 20 people were assumed not to give back the questionnaire by 10 percent. The sampling technique was done with the approach of nonprobability judgment sampling.
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2.9 Operationalization of the Variables Table 1. Operationalization of Variables No.
Variable
1
Attitude toward using
2
Perceived ease of use
3
Perceived of usefulness
4
Intention to use e-procurement
Items of Questionnaire Using e-procurement technology is a good idea (X1) Using e-procurement technology would be a wise idea (X2) Using e-procurement technology in procurement is pleasant (X3) It is desirable to use e-procurement technology (X4) Learning to use e-procurement technology would be easy for me (X5) The interaction with e-procurement does not require a lot of mental effort (X6) It is easy to use e-procurement technology to accomplish my procurement tasks (X7) Using e-procurement technology would enable me to accomplish my task more quickly (X8) Using e-procurement technology would make it easier for me to carry out my task (X9) e-procurement technology is useful (X10) Overall, using e-procurement technology is advantageous (X11) I would use e-procurement technology for my procurement needs (X12) Using e-procurement technology for handling my procurement tasks is something I would do (X13) I would see myself using e-procurement technology for handling my procurement tasks (X14)
2.10 Research Hypothesis No. 1 2 3 4 5
Table 2. Operationalization of the Variables Research Hypothesis H0 = There are no positive effects on ease of use (EOU) to the perceived usefulness of e-procurement H1 = Ease of use (EOU) has positive effect on the perceived usefulness of e-procurement H0 = There are no positive effects on ease of use (EOU) in attitude toward using e-procurement H2 = Ease of use (EOU) has positive effect on attitude toward using e-procurement H0 = There are no positive effects on Perceived of usefulness in attitude toward using e-procurement H3 = Perceived of usefulness has positive effect on attitude toward using e-procurement H0 = There are no positive effects on Perceived of usefulness to intention to use e-procurement H4 = Perceived of usefulness has positive effect on intention to use e-procurement H0 = There are no positive effects on attitude toward using intention to use e-procurement H5 = Attitude toward using has positive effect on intention to use e-procurement
3. Finding And Discussion 3.1 Respondents’ Characteristics Based on the research results, the characteristics of respondents by gender consist of 155 males and 65 females. This shows that the majority of businesses people in the Sentra Sablon Suci were male. Based on the age group, the majority of respondents were aged 26-39 years who were examined in the 124 respondents, between 40-50 years in the 48 respondents, those who were aged less than 25 years are of the 27 respondents, and those with the age over 50 years are of the 21 respondents. This shows that the majority of respondents in the Sentra Sablon Suci are in their productive ages. Based on their educational background, the majority of respondents were high school graduates with 180 respondents, 13 respondents graduated from junior high school, 12 respondents graduated from the university/institute, and 15 respondents who were educated apart from the criteria mentioned in the questionnaire. Based on the number of workers, the majority of respondents surveyed have a number of employees which is less than five people with 103 respondents, respondents who have a number of workers between 5-9 people with 82 respondents, respondents who have a number of workers between 10-20 people with 14 respondents, and respondents who have a number of workers over 20 people with 21 respondents. This shows that the majority of respondents are SMEs that are small-scale business consisting of only several workers. Under the old business, 90 respondents participating have been doing business between 8-15 years with, 88 respondents have run the business more than 15 years, 99 respondents have been doing the business between 2 to 7years, and 20 respondents have been running their business for less than two years. Based on their educational background, the majority of respondents have passed the education of high schools and their business duration. This suggests that the majority of respondents have been running the business for a long time and they still exist to this day. It also indicates that businesses in the Sentra Sablon Suci are likely to be the business that is passed down from previous generations. In addition, it demonstrates the Sentra Sablon Suci is one source of skilled labor to support the business activities. The businesses may not be run by the people who have higher education, but they can run their business until now. Based on the revenue earned in a year, 88 respondents receive over 70,000,000.00 IRP in a year, 56
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Analysis on Prediction of e-procurement Adoption using Technology Acceptance Model (TAM) in SMEs (Case Study in Sentra Sablon Suci Bandung in 2014)
respondents receive the revenue between 10,000,000.00 - 39,000,000.00 IRP, , 50 respondents received the revenue between Rp40,000,000.00 - 70,000,000.00 IRP, , and 26 respondents receive the revenue below 10,000,000.00 IRP in a year.. This shows that although the respondents are engaged in small-scale businesses, Sentra Sablon Suci can generate sizable revenue in a year and it also shows that the Sentra Sablon Suci is still a potential pivot SMEs in Bandung.
3.2 Statistic Descriptive Analysis Descriptive analysis is used to determine the responses of respondents to the variables contained in the TAM; ease of use (EOU), perceived usefulness, attitude toward using, and intention to use e-procurement in Sentra Sablon Suci Bandung. The questions in the questionnaire are based on the items listed in the picture 2 as follow:
Att U 20 %
36%
52% TB
STB
68% CB
84%
Int Eou
100% SB
B
Descriptions: Att : Attitude toward Using Eou : Ease of Use U : Usefulness Int : Intention toward Using
Fig. 2. Statistic Descriptive Analysis in TAM Variables
Based on the results using descriptive analysis on the variables in the TAM model, which consists of variable ease of use (EOU) located in both categories with the average value of percentage of 71.63%. This illustrates that the respondents in Sentra Sablon Suci think that electronic procurement technology is a good thing and is easy to use, which involves the process of learning and interacting. The variables of perceived usefulness are in good categories with the average value of percentage of 73.06%. This illustrates that the respondents in Sentra Sablon Suci Bandung think that electronic procurement technology is going to provide benefits when it is applied in the future. The attitude toward using variables is in good category with the average value of percentage of 70.81%. This illustrates that the respondents in Sentra Sablon Suci Bandung think that they have ideas and perceptions regarding the implementation of the procurement process through electronic or e-procurement in the future. The variable of intention to use e-procurement is in good category with the average value of percentage of 73.27%. This illustrates that the businesses in Sentra Sablon Suci Bandung give positive response to the variable of the intention to use e-procurement in which they have the desire to implement and use the electronic technology procurement or e-procurement in the future.
3.3 Analysis of Structural Equation Model (SEM) In the SEM analysis using Lisrel program in this research, some analyzes are performed:
a.
Normality Test Data Table 3. Normality Test Data Test of Univariate Normality for Continuous Variables Skewness Kurtosis Variable Z-Score P-Value Z-Score P-Value X1 -0.896 0.370 -0.278 0.781 X2 -0.863 0.388 -0.313 0.755 X3 -0.317 0.751 -0.695 0.487 X4 -0.720 0.472 -1.619 0.105 X5 -0.351 0.726 -0.794 0.427 X6 -0.724 0.469 -1.097 0.273 X7 -0.646 0.519 -2.011 0.044 X8 -1.028 0.304 -0.524 0.600 X9 -0.041 0.967 -0.415 0.678 X10 -0.814 0.416 -0.876 0.381 X11 -0.448 0.654 -0.290 0.772 X12 0.081 0.935 0.264 0.792 X13 -0.255 0.799 -1.611 0.107 X14 -0.025 0.980 -1.935 0.053 Relative Multivariate Kurtosis = 1.000
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Skewness and Kurtosis Chi-square P-Value 0.881 0.644 0.843 0.656 0.583 0.747 3.140 0.208 0.753 0.686 1.728 0.421 4.462 0.107 1.331 0.514 0.174 0.917 1.430 0.489 0.285 0.867 0.076 0.963 2.660 0.264 3.745 0.154
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Based on Table 3, the test for normality can be seen from the P-values for skewness and kurtosis Value. Subject to the value above 0.05, all variables used in this study are included in the data and they are normal.
b.
Analysis of Confirmatory Factor Analysis (CFA) CFA test is used to examine the indicator used in this study for their valid and reliable value. The value is used in latent variable if the value of the loading factor is > 0,5. The picture below illustrates the result of CFA test from Lisrel program in the latent variable:
Fig. 3. CFA Test of Attitude toward Using
Fig. 4. CFA Test of Ease of Use
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Analysis on Prediction of e-procurement Adoption using Technology Acceptance Model (TAM) in SMEs (Case Study in Sentra Sablon Suci Bandung in 2014)
Fig. 5. CFA Test of Perceived Usefulness
Fig. 6. CFA Test of Intention to use E-Procurement
Based on the results of the CFA tests conducted to test the validity of each indicator for each variable in the TAM model of 14, the indicators tested contain 13 valid items that can be used in the SEM analysis stage. The indicators may apply to the model as a whole, however there is one item that is invalid and should be dropped out from further analysis. The valid items, among others, are the statements of X1, X2, X3, X4, X5, X7, X8, X9, X10, X11, X12, X13, and X14. While the item that is not valid according to the results of the CFA test X6 will be in trimming or dropped from further analysis.
c.
Goodness of Fit (GOF) Test In SEM analysis, the model used should be in fit condition. This indicates that a model can be examined in further analysis. When the model is fit, it means that the model can be used to analyze problems in which they are formulated in the hypothesis.
Fig. 7. The Result of Structural Equation Model (SEM)
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GOF Criteria Chi- Square GFI RMSEA CFI IFI NFI RFI RMR
Cut-off Value Expected to be small >0,90 0,05 – 0,08 >0,90; > 0,95 >0,90; > 0,95 >0,90; > 0,95 >0,90; > 0,95 < 0,08
Table 4. Goodness of Fit GOF Output 90,69 0,94 0,078 0,98 0,98 0,97 0,94 0,053
Description Marginal fit Good fit Good fit Good fit Good fit Good fit Good fit Good fit
Based on Table 4, all of the requirements for testing the goodness of fit are in good condition. This means that the model is fit and acceptable although there are conditions that are in the category of marginal fit, which is the chisquare.
d. Validity and Reliability Test Item X1 X2 X3 X4 X5 X7 X8 X9 X10 X11 X12 X13 X14
SLF Output 0.85 0,74 0,63 0,52 0,71 0,97 0,99 0,53 0,79 0,70 0,59 0,71 0,66
Table 5. The Result of Validity for Indicator Test Acceptance of SLF Descriptive ≥ 0,5 Valid ≥ 0,5 Valid ≥ 0,5 Valid ≥ 0,5 Valid ≥ 0,5 Valid ≥ 0,5 Valid ≥ 0,5 Valid ≥ 0,5 Valid ≥ 0,5 Valid ≥ 0,5 Valid ≥ 0,5 Valid ≥ 0,5 Valid ≥ 0,5 Valid
Based on Table 5, all the indicators which are used in this research are all valid. In SEM analysis, the variables should have the standardized loading factor (SLF) of ≥ 0.5 Variable Attitude toward using Ease of Use (EOU) Perceived Usefulness Intention to Use E-Procurement
Table 6. The Result of Composite Reliability Test Value of Composite Reliability Composite Reliability Standard 0,77 ≥ 0,6 0,83 ≥ 0,6 0,85 ≥ 0,6 0,68 ≥ 0,6
Descriptive Reliable Reliable Reliable Reliable
Based on Table 6, the variables used in this study meet the requirements of composite reliability ≥ 0.6. Therefore, this research can be accepted.
e.
Equation Result of SEM The equation results of SEM in this study with the output of Lisrel are as follows:
Attitude = 0.69*Usefulness + 0.31*Ease Of Use, Errorvar.= 0.16 , R² = 0.84 (0.14) 4.82
(0.083) 3.67
(0.080) 1.98
Intention = 0.53*Attitude + 0.47*Usefulness, Errorvar.= 0.057 , R² = 0.94 (0.22) 2.44
(0.18) 2.63
(0.068) 0.84
Usefulness = 0.63*Ease Of Use, Errorvar.= 0.60 , R² = 0.40 (0.061) 10.42
(0.060) 9.87
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Analysis on Prediction of e-procurement Adoption using Technology Acceptance Model (TAM) in SMEs (Case Study in Sentra Sablon Suci Bandung in 2014)
Accordingly, it can be concluded that the predictor may see where the value of t-value is above 1.65 points. This means that the conditions for accepting the statistical hypothesis test are as follows: 1) Based on the t-value in the equation 10.42> 1.65 causing h0 to be rejected and h1 is accepted, it is proved that there is a positive effect of ease of use (EOU) on the perceived usefulness. 2) Based on the t-value in the equation 3.67> 1.65 causing h0 to be rejected and h2 is accepted, it is proved that there is a positive effect of ease of use (EOU) on attitude toward using. 3) Based on the t-value in the equation 4.82> 1.65 causing h0 to be rejected and h3 is accepted, it is proved that there is a positive effect of perceived usefulness on attitude toward using. 4) Based on the t-value in the equation 2.63> 1.65 causing h0 to be rejected and h4 is accepted, it is proved that there is a positive effect of perceived usefulness on intention to use e-procurement. 5) Based on the t-value in the equation 2.44> 1.65 causing h0 to be rejected and h5 is accepted, it is proved that there is a positive effect of attitude toward using on the intention to use e-procurement.
4. Conclusion 1) The process of adopting e-procurement in Sentra Sablon Suci Bandung as a whole is in good category. This is shown by all the TAM variables that serve as tools of analysis. The variables of ease of use (EOU), perceived usefulness, attitude toward using, and intention to use e-procurement are in the good category. The results of the analysis on variable level value of TAM are used to produce value for the variable of ease of use (EOU) for 71.63%, 73.06% for perceived usefulness, attitude toward using amounted with 70.81%, and the intention to use-procurement with 73,27%. 2) The variable of ease of use (EOU) has a positive effect on perceived usefulness by 60%. This suggests that the perception level of the usefulness of using technology is strongly influenced by the perception level of the ease of use on particular technology under the condition that the users still use new technology. 3) The variables of ease of use (EOU) and perceived usefulness have a positive effect on attitude toward using simultaneously by 16%. This suggests that the perception of ease of use of technology and the perception of the usefulness of technology gives small effect on a person's attitude towards the use of e-procurement technology, especially in Sentra Sablon Suci Bandung. 4) The variables of perceived usefulness and attitude toward using have a positive effect on the variable of intention to use e-procurement simultaneously by 5.7%. This suggests that the perception of the usefulness of technology and attitudes towards the use of technology give a very small effect on the interest in using e-procurement technology, especially in Sentra Sablon Suci Bandung. 5) Overall, the technology acceptance model (TAM) is a model that is less powerful in predicting the adoption of eprocurement technology in SME’s, especially in Sentra Sablon Suci Bandung. This can be a consideration for the organization who wants to make or implement new technology in the new area, for example in SME’s.
5.
Future Research
For future research, there are some main points that should be taken into account. First, if the researcher wants to examine the adoption of technology especially in SME’s, he should consider more about the social factors; for example, the usage of TRA (Theory of Reasoned Action) or TPB (Theory of Planned Behavior). This factor maybe more suitable for SME’s user. Second, TAM usage of technology adoption should be examined, including the other technologies like eauction, e-market, etc., which are useful for SME’s user. Finally, the researcher should consider expert opinion to combine this research in order to get further information.
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References [1] [2] [3] [4] [5] [6] [7] [8] [9]
Pujawan, I Nyoman, & ER Mahendrawathi. (2010). Supply Chain Management. (2nd). Surabaya: Guna Widya. Siahaya, Willem. (2012). Manajemen Pengadaan Procurement Management. Bandung: Alfabeta. Indrajit, Richardus Eko, & Djokopranoto Richardus. (2003). Dasar, Prinsip dan Potensi Pengembangan E-procurement. Jakarta: Dinastindo. Chuttur, Mohammad. (2009). Overview of the Technology Acceptance Model: Origins, Developments, and Future Direction. Working Paper on Information System, ISSN: 1535-6078, 9-37. Retrieved from sprout.aisnet.org. P.L., Charlesto Sekundera. (2006). Analisis Penerimaan Pengguna Akhir Dengan Menggunakan Technology Acceptance Model dan End User Computing Satisfaction Terhadap Penerapan Sistem Core Banking Pada Bank ABC. Thesis in Magister of Accounting, Diponegoro University: Unpublished. Riantini, Regina Eka. (2007). Analisis Adopsi Layanan M-Banking oleh Nasabah Perbankan di Bandung Tahun 2007 dengan Pendekatan Technology Acceptance Model (TAM). Thesis ini Telecommuncation and Informatic Business Management, Sekolah Tinggi Manajemen Bisnis Telkom: Unpublished. Aboelmaged, Mohamed Gamal. (2010). Predicting E-procurement Adoption in Developing Country: An Empirical Integration of Technology Acceptance Model and Theory of Planned Behaviour. Journal of Industrial Management & Data System, Vol. 110 No. 3, 392-414. Retrieved from Emerald Group Publishing Limited. Khafidhin, Rahmat. (2013). Identifikasi Faktor-Faktor Penggunaan Layanan CIMB Mobile Banking Oleh Nasabah di Kota Bandung. Thesis ini Telecommuncation and Informatic Business Management, Institut Manajemen Telkom: Unpublished. Ramdani, Boumediene, Chevers, Delroy, & William, Densil A. (2013). SME’s Adoption of Enterprise Application: A Technology-OrganizationEnvironment Model. Journal of Small Businessand Enterprise Development, Vol. 20 No.4, 735-753. Retrieved from Emerald Group Publishing Limited.
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The ISC CLO Conferen nce 2014
Beenchmarrking Leaarning O Organizaation Pilllars and Processees in n Indoneesian Co ompaniess Bayyu Prawira Hie Intellectual Business Commu munity, [email protected] @gmail.com, Jakarrta, Indonesia
Abstract A Many M companiess are transform ming into Learniing Organizatioons in various degrees d of succeess. However, nno tool is availaable to measuree th he progress of thhe transformatiion, to pinpoint which factors are lagging and d which factors are doing welll, and to compaare against otherr co ompanies or peeers. HBS Profeessor David Gaarvin, et al, offeered a benchmaarking tool in lo os.hbr.edu and rreviewed their survey concept in n the article “Iss Yours a Learnning Organizatiion” in Harvardd Business Rev view March 200 08. While the iddea and the too ol were good too measure m the orgganizational leaarning climates and factors, itt did not embod dy the 5 discip plines explainedd in Peter Seng ge’s concept off Learning Organiization. In his work explaineed in this paperr, the author ex xpanded the Sen nge’s five Learrning Organizaation discipliness nto ten pillars, aand took the iddea of Garvin et.al e in the persspective of meaasuring the proccess, then deveeloped a benchm marking tool too in heelp companies to transform into Learning Organization w with more preccise efforts. Th he tool has beeen used to su urvey numerouss co ompanies in Inndonesia, in thrree consecutivee years. This toool helps identiification of wh hich pillars are lagging compaared with otherr piillars, thus can help the compaanies to focus in n improving thee lagging pillars . And this surrvey also descriibe the transform mation process, whether w it is in thhe initiation byy the leader, in the implementattion, or already y forming some of the culture. This benchmarrk needs to havee more m companies survey to be abble for companiies to benchmarrk against the same industry’s companies.
© 2014 Bayu Prawira Hiee. Published by b Telkom P Pub. Ltd. Selection andd peer-review w under respo onsibility of T The ISCLO, Department of o Communiccation, Univeersity of Telkom, T 203422 Bandung, Indonesia I . Keywords: K Learn rning Organizati tion; benchmarkk; Indonesian coompanies;
In ntroduction d in the 1990ss, and pioneerred by the wo ork and researrch Learnning Organizattion is a concept that was jjust developed L Organnization concept is differen nt than what w was coined ass Organizationnal off Peter Senge and colleaguues. [1] The Learning Learning. L Learrning Organizzation is accorrding to Peterr Senge [2]: “an organizatiion where peoople expand their t capacity to
create cr the resul ults they truly desire, d where new and expaansive patternns of thinking are nurtured, w where collecttive aspirationn is seet free, and w where peoplee are continuaally learning hhow to learnn together.” This T is fundam mentally diffeerent than whhat co ommonly peoople perceivedd as organizational learning, which is the learning process of people in an organization.[3][4] The Learning L Orgaanization conccept touches many other fundamental issues, in wh hich Peter Seenge termed as a ‘disciplines’. still referring However, H many authors are g to organizatiional learning g in exchange of Learning O Organization. This differennce off interpretatioons results inn different deefinition of hhow a successsful Learning g Organizatioon will look like. The veery ph hilosophical cconcept of Leaarning Organiization that is explained in the book of Peter P Senge “T The Fifth Disccipline: The Art A
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The 2nd International Seminar & Conference on Learning Organization Proceedings
and Practice of Learning Organization” [2] somehow needs to be translated in practical steps which can be measured to guide corporations to progress according to the concept. Measuring and Benchmarking Learning Organization Transformation “If you cannot measure it, you cannot improve it” is a quote that is often mentioned by management authors including Peter Drucker. This means if we want to lead a corporation to transform into a Learning Organization, we need to be able to develop a measurement instrument, to track progress on the efforts and results, and also to benchmark against other corporations. Google Search that was done by the author until 18th October 2014, gave some leads to some efforts of formulating a measurement or benchmarking tool for corporations to assess themselves: 1. HBS Professor David Garvin, et al, [5] offered a benchmarking tool in the website (accessed on 18th October 2014) http://www.midss.org/content/learning-organization-survey and reviewed their survey concept in the article “Is Yours a Learning Organization” in Harvard Business Review March 2008. While Garvin’s idea and tools were good to measure the organizational learning, it doesn’t show any connection with the disciplines of a Learning Organization such as mentioned by Senge. The author mentioned the purpose of the instrument is “to assess, and compare, the learning that is occurring in several areas of an organization or in different organizations.” Interesting though, Garvin divided the survey into three key sections: The first section, Supportive Learning Environment, assesses psychological safety, appreciation of differences, openness to new ideas, and time for reflection. The second section, Concrete Learning Processes and Practices, assesses experimentation, information collection, analysis, education and training, and information transfer. The final section examines Leadership in the organization to determine if it reinforces learning behavior. The three sections can logically explain the stages of how an organization changes; fist is the initiation by the leader, follows by the embodiment of the initiative into the process and practices inside the organization, and finally will create an environment that is supportive to the initiative or comply to the initiative which means the culture has changed into the new one. 2. Bryan T. Phillips, [6], a Managing Partner, at Consolidated Consulting, Lennox Head, New South Wales, Australia, wrote an article 'A four‐level learning organisation benchmark implementation model' in The Learning Organization, Vol. 10 Iss: 2, pp.98 – 105. The abstract mentioned “Reveals that research using a new learning
organisation benchmarking implementation model has found that Australian organisations are increasingly committed to adopting, and implementing, learning organisation principles. Discusses the debate over individual and organisational learning. Outlines a ten‐principle learning organisation benchmarking and implementation model and describes the methodology used to establish its validity. Shows how organisations can determine the extent of the shortfall between the importance accorded learning organisation principles and the extent of their implementation. It has the ability to identify sectoral trends and reveal individual organisation weaknesses. Concludes that the model is an effective means of establishing an organisation’s status, providing a vehicle for evolution into a learning organisation. “ 3. Bersin and Associates [7] offered a report service on High Impact Learning Organization research that was written in a report with specification of “350-plus page study is a detailed analysis of trends and best practices in the management and operations of corporate training. The report is based on surveys of more than 800 organizations and interviews with approximately 100 learning executives over the last three years. The definitive go-to resource for every corporate learning executive, the study identifies the top 18 learning strategies that have highest business impact and 50 key characteristics of a high-impact learning culture.” Again, from the specification it mentioned, the measurement is more on corporate training or learning, which is not specifically aligned with the Learning Organization defined by Senge. Designing and Developing a Measurement Tool for Learning Organization Transformation Peter Senge [2] described the five disciplines that are needed to transform a corporation into a Learning Organization, which he explained as:
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B Benchmarking Lea earning Organizatition Pillars and Processes Pr in Indon nesian Companiess
    
Personnal Mastery; the disciplinee of continuallly clarifying and deepenin ng of our perssonal vision, of focusing our o energiies, of developping patience, and of seeingg reality objecctively. Mentaal Model; the discipline of understandinng deeply ing grained assump ptions, generaalizations, or even e pictures or imagees that influencce how we un nderstand the w world and how w we take actiion. Sharedd Vision; the discipline to apply the skiills of unearth hing shared 'p pictures of thhe future' thatt foster genuiine comm mitment and ennrollment rath her than complliance. Team Learning; thee discipline to improve the ccapacity of members m of a teeam to suspennd assumption ns and enter innto a genuuine 'thinkingg together.' System m Thinking; the t disciplinee to enhance tthe ability to recognize the invisible faabrics of interrrelated actionns, whichh often take yeears to fully pllay out their eeffects on each h other.
The discipplines explaineed by Senge are a the input oor efforts of ev veryone in thee corporation that will lead the corporation o transform innto a Learning Organization n. However, inn addition to th he input indicators, we needd to know of what w will be the t to reesults that cann be seen whennever a corporation turns innto a Learning g Organization n. As we all kknow, a compaany is measurred by y its productivvity, and espeecially in the a Learning O rganization where w pictured d as “where ne new and expannsive patterns of thhinking are nuurtured “, innoovation shouldd be a paramoount result to be seen. This is also in acccordance to thhe research done by y Kontoghiorgghes et. al [8] In additionn to that, the practice of Knowledge K M Management is i also an inteegral part of a Learning Organization, O as kn nowledge maanagement described as managing peopple to create new n knowled dge, disseminaate it widely throughout the t orrganization, aand quickly em mbody it in neew technologiies and produccts.[9] So the existence of K Knowledge Management M can bee also used ass an indicator of o a Learning Organizationn. This link is also a researcheed by Dzunic [[10]. Accordingg to Lawler IIII (1993) Rewaard systems arre a critical paart of any orgaanizational deesigns. To direect the efforts in Learning L Orgaanization so thhat it connectt to its purposse, the reward d systems sho ould be basedd on performaance and shouuld vaalue learning. Last but nnot least, in anny transformaational processs, leadership plays an imp portant role. L Like the Hann nover Insurannce CEO C Bill O'Brrien said in Senge S [2]. 'Iff this type off organization n is so widely y preferred, w why don't peoople create suuch
organizations? or ? I think the annswer is leaderrship.” So, in adddition to the five disciplin nes mentionedd by Senge, there t are fivee other indicaators that can n be found inn a Learning L Orgaanization, thatt can be used as measurem ment items. Th hose five other indicators are productiv vity, innovatioon, kn nowledge mannagement, rew ward systems, and leadershiip. Garvin et. al. [5] work gave g an insigh ht that a transsformation is happening in several stagess. The first stage is when the t leeader takes thee initiative andd then reinforrces day-by-daay all other leaaders and stafffs to change, that is what iss called Leadeers Reinforcement R t. In this stagge, the changees happen in the organizattion are in th he forms of eencouragemen nt from leaderrs, leeaders behavioor, etc. The initiative and reinforcemennt of leaders will w not give practical orgaanizational efffects unless the t in nitiative is theen transformeed into new processes p andd practices, e.g. changes in n the reward systems, com mpany rules annd reegulations, crreation of leaarning groups, etc. And fiinally, after being b done so ometime conssistently, thesse changes will w trransform into new habit andd culture, whicch are more suustainable. In this stage, people don’t neeed to adjust to o the changes by b fo ollowing proccesses and praactices anymore, but they allready reflect the changes in n their everydday’s mindset and behavior.. o a Learning Organization O Figure 1. Transformaation Stages of
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T 2nd Internatio The ional Seminar & C Conference on Leearning Organizat ation Proceedingss
By combinning the ten inndicators, or pillars of a Leaarning Organization and thee transformatioon stages, thee structure of the t measurement m toool will be likke this: Figuree 2. The Surveey Structure
Considerinng the total tim me of each paarticipant needd to fill up thee survey, each h of the pillarss of Learning Organizationn is measured m by 6 questions, wiith total 60 qu uestions to covver the 10 pilllars. If one question needs 330 seconds for the participaant to o answer, thenn the total queestions will taake up 30 minnutes to finish h. The 6 questtions of each pillars are div vided into thrree caategory; 2 quuestions for Leaders L Reinfo forcement stagge, 2 question ns for Process and Practicce stage, and 2 questions for f cu ulture stage. T The example of o the 6 questions is below. Figuure 3. The exam mple of 6 queestions in a pilllar divided in nto 3 categoriees of stage
Selecting the R Respondents for the Surveey for Learniing Organization Transforrmation People in the top execuutive positionss usually havee a biased op pinion about th heir organizattion towards more m optimisttic viiew, as leaderrs are always optimistic. Therefore T theyy are not good d candidates for f this surveyy. They may think that whhat th hey have initiiated have beeen executed by b the employyees, becausee simply they have encoura raged people to t execute. The
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B Benchmarking Lea earning Organizatition Pillars and Processes Pr in Indon nesian Companiess
reeality might bbe different, as different people p take ddifferent attitu ude and time towards a chhange. So the candidates of reespondents in this survey arre the manageers below the eexecutives position (below Board of Direectors). Consiidering the levvel off understandinng of what is going g on in th he company, juunior or new employees aree not ideal canndidates of this survey eitheer. The T minimum number of resspondents requ uired is 40 perrsons. Figure 4. The ideal ccandidates of respondents r to o this survey
Applying A the M Measuremen nt Tool for Leearning Orgaanization Tran nsformation The measuurement tool that t was desig gned and deveeloped in 2010 0, then was ap pplied to severral companiess in 2011, 20112, an nd 2013. The 2014 survey is still ongoin ng. In 2011, tthe companiess that took thee survey weree 14 companiees, they are; PT P Angkasa A Pura 1, PT Antam m, PT Asabrii, PT Bakrielland, PT Buk kit Asam, PT FIF, PT Jassa Marga, PT T Asuransi Jaasa In ndonesia, PT Kresna Securrities, PT Latinusa, Perum P Pegadaian, PT T Pelindo-2, PTPN P V, PTPPN IX, and PT T Total Banguun Persada. In 2012, there werre 13 companies took the ssurvey, they are; a PT Astra Otopart, PT Asuransi Jasaa Indonesia, PT P Kresna K Securitties, PT Pelinddo-2, PT Pelin ndo-3, PT Buukit Asam, PT T FIF, PT Forttune Indonesiia, PT Jasa Marga, M PT Pupuuk Kaltim, K PT Teelkom Indonessai, PT ISS, and a PT Antam m. In 2013, th here were 24 companies toook the surveey, they are; PT P Astra A Otopart, PT Jamsostekk, PT Kereta Api A Indonesiaa, PT Indomob bil Finance, PT P Marga Manndala Sakti, PT P Megapolitaan, PT Pos Logistiik Indonesia, PTPN P IX, PT T Asuransi Triipakarta, PT BNI B Syariah, PT P Angkasa PPura 1, PTPN N XI, PT Asabbri, PT Kresna Seccurities, PT Peelindo-2, PT Mandiri M Finannce, Perum Peg gadaian, PT FIF, F PT Fortunne Indonesia, PT Jasa Margga, PT Garuda Inddonesia, PT Teelkom Indonessai, PT Unitedd Tractors, and d PT Sarinah. There are sseveral interprretations can be b obtained byy the companiies from the su urvey results: 1. Compparison betweeen the 10 pillaars, which pilllars are high and a which pillaars need impro rovements. 2. Portraait of the balance of Leaaders Reinforrcement, Proccess and Practices, and C Culture, relateed to Learninng Organnization princiiples, in that particular p yearr. 3. Time sequence coomparison of the 10 pillarrs. When thee company taakes multiplee years survey y, especially if conseccutively, we can c see the dy ynamics of chhange of each h pillars to seee whether thee efforts in pllace have givven resultss.
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T 2nd Internatio The ional Seminar & C Conference on Leearning Organizat ation Proceedingss
Figure 5. Time sequeence comparison of 10 pillaars of a compaany
4.
Time sequence com mparison of th he stages of trransformation, whether the Leaders Reinnforcement haas manifested in new P Process and Prractice, and crrafted a new C Culture. Figure 6. Time sequeence comparison of 10 pillaars of a compaany
5.
Compparison with other o companies. Paired witth the survey results of other companies as a group in n the same yeaar, can giive feedback of how good the internal ssituations com mpared to the average of otther companiees. In a big daata evaluaation, a compaany can compare to the com mpanies in thee same industry.
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B Benchmarking Lea earning Organizatition Pillars and Processes Pr in Indon nesian Companiess
Fiigure 7. Peer ccomparison of 10 pillars off a company
Figgure 8. Peer comparison off Learning Org ganization tran nsformation oof a company
The inndividual dataa of the compaanies cannot bbe shared in th his paper due to the confiddentiality naturre of the survvey reesults. Howevver, we do haave permission from a com mpany that iss improving year y by year iin our researcch, to share the t reesults. The com mpany is PT FIF F (Federal International I F Finance) and the t permission n to share andd to publish th he survey resuults iss from its CEO O, Mr. Suhartoono, on 29th September 20114. Case C Study; P PT Federal In nternational Finance F (FIF)) Corpoorate Profile of o PT Federall Internationaal Finance (FIIF) according to Bloomberrg Business Week W [11]: “PT “P Federal F Internaational Financce provides coonsumer financ ncing services in Indonesia. The companyy engages in financing f Honnda motorcycles. m It is involved in financing new and used ed motorcycless, as well as multipurposee products, suc uch as electronnic goods go and houusehold appliaances. The com mpany also of offers leasing and a factoring services. It op operates a netw work of has 164 1 branch br offices and 364 poinnt of servicess facilities in M Makassar, Baanjarmasin, Medan, M Palembbang, Semaranng, Yogyakart rta, Surabaya, S Dennpasar, Kedirii, Jember, Ban andung, and ot others. The coompany was formerly f know wn as PT Mit itrapusaka Arttha Finance F and chhanged its nam me to PT Fedeeral Internation onal Finance inn November 1991. 1 PT Fedeeral Internationnal Finance was w founded fo in 198 989 and is heaadquartered inn Jakarta, Indoonesia. PT Feederal Internattional Financee is a subsidia iary of PT Ast stra Innternational, T Tbk.”
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T 2nd Internatio The ional Seminar & C Conference on Leearning Organizat ation Proceedingss
PT FIIF (www.fifgrroup.co.id) offfice is at Men enara FIF, Jallan TB Simatu upang Kav. 1 5, Cilandak, Jakarta, J 124440, In ndonesia. It’s headcount in 2014 is aboutt 16,000 emplooyees. F transformation process sttarted with vission and missiion as well as corporate valu lues transform mation initiatedd PT FIF siince 2010, led by its CEO O, Mr. Suharttono. Other tthan reemphasizing the foccus to custom mers, PT FIF adopt a new w ap pproach towarrds the custom mers that is cu ustomization oof products to o the characteeristics of the customers. One of the new w prroducts was thhat in certain area, the custtomer can payy its installments as much as a they want aaccording to th heir cashflow. For the products innovation, the CEO shifted much of his role down n to the manag gers. It also reeadjust its rew wards systems. The T new rewarrds systems will w allow the lower rank em mployees to achieve a more incentives, i evven can be hig gher than theirr su upervisors. Inn addition to that, t the comp pany also invvolve the famiily of the emp ployees in thee rewards sysstems, e.g. thee faamily of emplloyees were innvited for a dinner d togetheer with the maanagement, an nd the managgement thank them for theirr su upports to the respected em mployees. The company alsoo launched an n integrated IT T system with its dealers, so o the companyy caan anticipate bbetter the needds of financing of the dealeers’ customers. The efforts seem too work well in n the indicatoors of survey of o Learning Organization O tthat we condu ucted upon PT T FIF. Each yearr there was a steady impro ovement of eaach pillars measured. And in the year 22013, PT FIF F achieved thee hiighest score aamong the com mpanies we su urveyed at thatt year. Figure 9. Survey S results of 10 pillars oof Learning Organization O of o PT FIF yearr 2011, 2012, 2013
Figure 100. Survey results of stages oof Learning Orrganization off PT FIF year 2011, 2012, 2013 2
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B Benchmarking Lea earning Organizatition Pillars and Processes Pr in Indon nesian Companiess
From the survey reesults, we shou uld expect thaat PT FIF perrformed betterr than the prevvious years. However, H as the t fiinance industrry is much afffected by the overall o macrooeconomic con nditions of a country c and al also regulation ns applied to the t in ndustry, the coomparison of performance should be agaainst the industry average. From time to time, government regulatioon in ncreased the m minimum dow wn payment fo or vehicle leaasing, which affected a the ov verall vehiclee leasing mark ket size. PT FIF F was w the best inn our survey coompared to otther companiees in 2013, ho owever it didn n’t mean that PPT FIF autom matically was the t beest among othher leasing companies, becaause only a feew leasing com mpanies joineed the survey. And also we need to bear in mind m that a chaange happeneed in a certain n time, might need few yeaars before it caan be seen in the financial statements. We W caan expect thaat PT FIF will show a performance leaap 2-3 years from 2013 where w it show wed above av verage Learninng Organization O suurvey scores.
Figure 11. Financiaal Performancce of PT FIF, year y 2011-20113 Conclusion C Learning Organnization concept originatedd from Peter Senge S idea hass formed a new w meaning which is differeent The L frrom organizattional learningg. The transfo ormation into a Learning Organization O may m happen in some exten nd in companiies without w even aawareness of the t Learning Organization O concept, as ev very company y tries to imprrove its performance througgh many m efforts w which some off them coincide with the Leaarning Organiization concep pt. However, tto fully capitalize the beneffits off being a Leaarning Organization, compaanies need to have a comp prehensive understanding aabout Learnin ng Organizatioon, an nd consciouslyy put efforts to t transform in nto it. A meassurement tool might offer a more specificc approach to improve certaain asspects of beccoming a Leaarning Organization, and too benchmark a company degree d of trannsformation into i a Learninng Organization O compared to other companiees. The measuurement tool designed d and developed byy us can be on ne of the optioons to o measure, in the current sittuation where no standard m measurement tool availablee. The value off this tool willl increase alonng with w the numbeer of years it is i implemented, and also wiith the numbeer of companiees joining the survey, which h will be able to offfer more com mparisons in time-span t and d peer results. The improveement of the Learning L Orgaanization tran nsformation inn a co ompany doessn’t guaranteee an instant financial f resuult, instead it will guarantee more on sustainability. However, the t fiinancial resultt should be seeen within nex xt few years, bbut have to taake into accou unt the macro environment factors that can afffect the absollute amount.***
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The 2nd International Seminar & Conference on Learning Organization Proceedings
REFERENCES: [1] http://en.wikipedia.org/wiki/Learning_organization visited on 18th October 2014 [2] Senge, P. M. (1990). The fifth discipline: the art and practice of the learning organization. New York, Doubleday/Currency. [3] Peter Y.T. Sun, John L. Scott, (2003) 'Exploring the divide – organizational learning and learning organization', The Learning Organization, Vol. 10 Iss: 4, pp.202 – 215 [4] Anders Örtenblad, (2001) 'On differences between organizational learning and learning organization', The Learning Organization, Vol. 8 Iss: 3, pp.125 - 133 [5] Garvin, D. Edmondson, A., and Gino, F. (2008). Is yours a learning organization? Harvard Business Review, March: 109-116 [6] Bryan T. Phillips, (2003) A four‐level learning organisation benchmark implementation model. The Learning Organization, Vol. 10 Iss: 2, pp.98 – 105 [7] Bersin Josh, and Associates, (2008). The High-Impact Learning Organization WhatWorks® in the Management, Governance and Operations of Modern Corporate Training. Internal publication of Bersin & Associates LLC [8] Kontoghiorghes Constantine, Awbrey S., Feurig P. (2005) Examining the Relationship between Learning Organization Dimensions and Change Adaptation, Innovation as well as Organizational Performance. Human Resource Development Quarterly Volume 16, Issue 2, pages 185–212, Summer 2005 [9] Nonaka, Ikujiro (1991). 'The knowledge creating company'. Harvard Business Review 69 (6): 96–104. [10] Dzunic Marija, Boljanovic JD, Subotic J. (2012) The importance of concepts of Knowledge Management and Learning Organization in managing the knowledge-flow in organizatios. Paper in Management, Knowledge and Learning, International Conference 2012. [11] Bloomberg Businessweek webpage accessed on 18th October 2014 http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=31252810
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The ISCLO O Conferencee 2014
Custoomer Sattisfactionn Towarrds Facullty Serviice Using Service S Q Quality Dimensions Perspecctive from m Economiic and Bussiness Facculty Studeents Nuraafni Rubiyaanti, Maheendra Fakhri, Prabubeento Cakti** Busiiness Administrattion, Faculty of C Communication and an Business, Telk lkom University Jl. Telekom munikasi no.1, Teerusan Buah Batuu, Bandung, Indon nesia
Absttract The purpose p of this paper is to exaamine the perception of studennt on the quality y of faculty serv vices. It also atttempts to assess their level of satisffaction towardss faculty services. The study y is carried outt using Importtance Performaance Analysis aand the data iss collected by questtionnaire adoptted from a quallity impact surv vey based on S SERVQUAL diimensions. The result reveals that students’ satisfaction s on facullty service and tthe priority attrribute of SERV VQUAL dimenssions should be considered. Th he study is limitted to the Facullty of Business Econ nomics of Telkkom Universityy, thus any gen neralization to other academiic services is premature p at th this stage. The result on the impo ortance of perfoormance analysiis of service quality could be im mplemented in the faculty serv vice.
014 Nurafni R Rubiyanti, Mahhendra Fakhrii, Prabubento Cakti. Publish hed by Telkom m Pub. Ltd. © 20 Selection and peerr-review undeer responsibiliity of The ISC CLO, Departm ment of Comm munication, U University off Telkom, 2034 42 Bandung, Indonesia. Keyw words: Customer sservice quality; customer c satisfacttion; Importance P Performance Anaalysis
1. Introduction I Satisfaction S iss customer’s evaluation e of a product orr service in teerms of wheth her that produuct or service has met the custo omer’s needs and expectatiions [1]. In 20 009, Kiran [2] measured serrvice quality on o library andd information science. This study y contributes to the growinng body of kn nowledge on service qualiity measures in i academic llibraries. He measured m the perception of acaademic staff towards t the quality q and thhe impact of library services on efficieency and effeectiveness of acad demic work. He also meaasured the lev vel of satisfaaction of acad demic staff towards t librarry services. Pariseau P and McD Daniel [3] perrformed a reseearch in two small private business sch hools to descriibe the most iimportant detterminants of overrall service quuality in businness school an nd to equate the order the importance to be the same me as for otherr services. In ordeer to attract ccustomer, servve their need ds, and retain them, servicce provider an nd researcherr are actively y involved in undeerstanding connsumer’s expeectation and perceptions p off service qualiity. The facultty respondentss receive the SERVQUAL S instrrument in the same form ass the student’ss instrument. T The result is few f differencees in demograp aphic data betw ween the two scho ools, and the fa faculty and business schoolss are not curreently deliverin ng quality serv vice in the view w of their stud dents. The T customer expectations represent a norm n against w which perform mance is com mpared and the hey may, in prrinciple, take man ny forms varyiing from som me minimum to olerable levells of performaance to some concepts of thhe ideal or peerfect service [4]. Customer saatisfaction is a psychological concept aarising from and individu ual’s comparisson of perceiived product perfo formance withh expectations for this perforrmance [5]. * Corrresponding authoor. Tel.: +62 813995000488 E-mail E address: [email protected] muniversity.ac.id, [email protected] mail.com
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The he 2nd Internationa nal Seminar & Con onference on Learrning Organizatio on Proceedings
Telk kom Universitty is higher edducation proviider. Service iin higher education is divid ded into two ttypes of services; teaching services and admiinistrative servvices. The facculty service iss responsible for the admin nistrative serviices for studen nts. Based on r of the ssurveys and innterview cond ducted by reseearchers, theree are indication ns of some facctors in the faaculty service the results whicch are not parrticularly goodd, including th he persistencee of faculty seervices employ yees who are less responsive to student com mplaints and em mployees attittudes that aree less friendlyy to student. Delivering D good service is more than measuring m and traciing a physicall process, how wever the attiitudes and beehavior of em mployees at ev very level muust show a com mmitment to quallity and respeect for custom mers [6]. Mo odern manageement sciencee’s philosophy y considers ccustomer satissfaction as a baseeline standard of performannce and a posssible standarrd of excellen nce for any bu usiness organiization [7]. Related R to the service quality, itt is the conceept of customeer satisfactionn. Practitionerrs and writerss in popular ppress tend to use the term ut researchers have attempted to be more precise aboout the mean nings and the satissfaction and qquality interchhangeably, bu measurements off the two conncepts, resulting in consideerable debatee although thee two conceppts have certaain things in mmon Satisfacttion is generaally viewed ass a broader cooncept, whereaas service quaality focuses sspecifically on n dimensions com of seervice [1-2]. Since S the resuults of pre ressearch show that t many stuudents complaained about th he faculty serrvices, this study seeks to exam mine how studdents perceivee the service quality q of the ffaculty servicees and what dimension is thhe priority to be b improved. It fu urther investiggates the satissfaction level to faculty seervices and maps m the prioriity scale by iimportance – performance analy ysis [8]. 2. Method M The T measuringg instrument used u was quesstionnaire. Thhe questionnaiire consisted of o 21 questionn items, to sollicit response on a five-point Likert-type scale s [9]. Th he questionnaaire was baseed on SERV VQUAL as a tool for qu uality service measurement. This questionnaiire had has tw wo scale respoonses: the desired service level-measuree student expectation; and perception of facculty service performance. p The questionnnaire was divided into tw wo sections: SSection 1 – perception p on quallity of faculty secretary servvice; Section 2 – expectatioon on quality of faculty seccretary servicee. The analyticcal technique using Importance Performancee Analysis (IP PA) that is firrms is used bo oth to evaluatte their comppetitive positio on and to set priorrities in orderr to enhance customer c satisfaction [10]. A five-point Likert L scale was w used to me measure the perrformance of SER RVQUAL dim mensions. For measuring expectation, thhe scale is raanged from (1 1 –very low tto 5 very hig gh) while the perfo formance rangged from (1 –very – poor performance p tto 5 –very go ood performaance). Fill-in the blanks of categorical quesstions were uused for dem mographic queestions. The ddata were co ollected from Economic B Business Facu ulty, Telkom Univ versity – Banndung in 20144. The researcchers grant p ermission to survey the sttudent over a period of 2 months. The surv veys were coonducted in the t faculty seervice room at the front desk of thee 110 questioonnaires distributed. The quesstionnaires weere derived byy the operation nalization of thhe variables sh hown in Tablee 1.
2.1. SERVQUAL AL model The T researcheer adapts SER RVQUAL as the t instrumennt to assess faaculty servicee quality. Thee SERVQUAL L instrument measures the quaality from the customer’s perspective p baased on five dimensions d (R RATER) refleccting the coree criteria that omers find moost important in judging quality [1]: custo 1. 1 Reliability: ability to perfform the prom mised service ddependably an nd accurately. 2. 2 Assurance: knowledge annd courtesy off employees annd their ability y to inspire tru ust and confiddence. 3. 3 Tangibles: aappearance off physical facilities, equipm ment and personnel. 4. 4 Empathy: prrovision of inndividualized care c and attent ntion to custom mer. 5. 5 Responsivenness: willingnness to help cu ustomers and pprovide promp pt service.
2.2. Customer Saatisfaction Inddex Satisfaction S inndex is reachhed when the performancee of a producct exceeds the value of thhe customer expectations. Custtomer Satisfacction Index is denoted as [9 9]: ……………… … ……………… ……………… ………… 1) Wheere: Satissfaction indexx > 1 means cuustomer is dellighted Satissfaction indexx = 1 means cuustomer is satiisfied Satissfaction indexx < 1 means cuustomer is dissatisfied
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Customer Satisfaction Towards Faculty Service Using Service Quality Dimensions Perspective from Economic and Business Faculty Students
Variable
Table 1. Operationalization of Variables Operational Definition
Dimension
Reliability
Ability to perform the promised service dependably and accurately.
Assurance
Knowledge and courtesy of employees and their ability to inspire trust and confidence.
Service Quality [1] Tangible
Appearance of physical facilities, equipment and personnel.
Empathy
Provision of individualized care and attention to customer. Willingness to help customers and provide prompt service.
Responsiveness
                    
Indicator Honesty in delivering service Ability to make problem solution Employee readiness in serving Punctuality in promises Satisfactory service Clear information Employee hospitality Employee politeness Knowledge of employee Neatness in employee’s dress Cleanliness of the room comfortable room were Completeness of secretariat room Room layout Employee’s respect Responsibility Willingness to listen Willingness to help Care Good communication Quickness in serving
2.3. Importance – Performance analysis Importance-performance analysis (IPA) has been popular multi-attribute technique for evaluating marketing actions, as it yields insights into which elements of a value proposition the management should focus on [10]. It is a simple and useful technique for evaluating two dimensions of customer attributes; perceived importance and performance level. Using this information from sample customers, the analysis plots each attributes on a grid [10-11]. The IPA matrix IS first introduced into marketing domain to help target audience identify and rate certain product or service attributes, based on their importance to the rater and their impact on the organization’s overall performance [8-12]. Extremely important
A. Concentrate here
B. Keep up the good work
Excellent performance
Fair performance
D. Possible overkill
C. Low priority
Slightly important
Fig. 1. Importance – Performance Matrix
The next step is to develop Importance Performance grids for faculty service: 1) Identifying the expectations of faculty service; 2) Measuring the importance of these expectations; 3) Measuring the performance of the faculty service; 4) Interpreting the ratings in a two-dimensional visual grid. The vertical axis of the grid indicates the customer’s perceived importance of the variables, and the horizontal axis shows the product’s performance in relation to these variables [11]. Each variable is positioned in one of the four quadrants of the IP grid. Quadrant A includes variables considered important by faculty service but they are performed poorly, suggesting that the faculty service needs to concentrate on improving these attributes. The variables in quadrant B are rated as being of high importance and they are delivered with high performance. These attribute are considered as strengths,
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The 2nd International Seminar & Conference on Learning Organization Proceedings
which the faculty service should strive to maintain. Quadrant C contains variables that are low in both importance and performance, while Quadrant D includes variables that are of low importance but high performance. The variables in Quadrant D can be interpreted as possible overkill, because they seem to provide services that customers do not perceive as being important.
3. Results and discussion A total of 110 questionnaires were distributed to the students of Economic Business Faculty. Only 100 are returned, giving a return rate of 90.9 percent. The details of the respondents are as shown in Table II. The majority of respondents are female with 61%, whereas male are 39%. The intensity rate respondents visiting secretariat are 67% more than 8 times a month, about 5 – 8 times a month, and 1 – 4 times a month. The respondents are from different year of admissions or different generation; the majority of respondents are varied; from the class of 2010 with 40%, class of 2011 with 25%, class of 2012 with 20%, and class of 2013 with 15%.
3.1. Students’ perception towards faculty service The mean value of perception of quality as rated by students based on the five dimensions is shown in Table III. Overall, the highest score is for Tangible (m = 4.45), followed by Reliability, Empathy, Assurance, and Responsiveness with the same result (m = 4.00). For the secretariat, the services receiving the highest ratings are “neatness in employee’s dress”; “cleanliness of the room”; “completeness secretariat room”; and “room layout”. Table 2. Mean value of each dimension by expectation Dimension Reliability Assurance Tangible Empathy Responsiveness
Expectation Mean 4.40 4.40 4.45 4.40 4.40
3.2. The expectation of student towards the faculty service The mean value of expectation on quality as rated by student based on the five dimensions is shown in Table IV. Overall, the highest score is also for tangible (m = 3.60), followed by Reliability (m = 3.01), Empathy and Responsiveness with the same score (m = 3.00), and lastly Assurance (m = 2.90). Table 3. Mean value of each dimension by performance Dimension Reliability Assurance Tangible Empathy Responsiveness
Performance Mean 3.10 2.90 3.60 3.00 3.00
3.3. Satisfaction level of students towards Faculty service Table 4 is the result of data acquisition using the SERVQUAL instrument and we can get the results as presented in column 2 and column 3, which is the mean of each questionnaire. Mean value is obtained by summing the score for each item and then divided by the number of respondents. The highest score for faculty service performance is on item 17 (m = 4) “employees dress modestly”, followed by item 1 (m = 3.6) “ employees are honest in delivering service”, whereas the lowest score for performance is item 3 (m = 2.7) “appropriate in promising” and item 9 (m = 2.8) “ quickness in service”. The highest score on student’s expectation are item 7 and item 9 (m = 4.6) “employee need to care and provide a quick service, whereas the lowest score on student’s expectation is item 1 (m = 4.3) “employees are honest”. Next step, to determine the customer satisfaction index is by calculating deviation about perception and expectation score for each item. The result shows that overall, it has a negative value suggesting a gap in service quality. The biggest gap is in item 3 (m = -1.7)” appropriate in promising”, followed by item 4 “readiness in serving the students”, item 5 “ employees answer is satisfying”, item 9 “quickness in serving” (m = -1.6). Whereas the lowest gap is item 17 (m = -0.5) “neatness in employee’s dress”, followed by item 1 (m = -0.7) ”employees are honest”. Customer satisfaction indexes for SERVICE QUALITY dimension are shown on Table 4. The index shows the gap seen from the negative value, they are
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Nurafni Rubiyanti, Mahendra Fakhri, Prabubento Cakti
reliability (-1.3); responsiveness (-1.4); assurance (-1.5); empathy (-1.4); tangible (-0.9). It is necessary to have training programs as an effort to improve service on aspects of responsiveness and the faculty service ability to deliver the promised service accurately, especially the ability of employees on faculty service in fostering student’s trust and satisfaction. Table 4. Customer Satisfaction Index Item Mean per item Customer index per item Dimension Mean per dimension Customer’s index by SERVQUAL score Perception Expectation Perception Expectation 1 3.6 4.3 -0.7 Reliability (Item 1 – 5) 3.1 4.4 -1.3 2 3.2 4.4 -1.2 3 2.7 4.4 -1.7 4 2.9 4.5 -1.6 5 2.9 4.5 -1.6 6 3.3 4.4 -1.1 Responsiveness (Item 6 -9) 3.0 4.4 -1.4 7 3.0 4.6 -1.1 8 3.0 4.4 -1.1 9 2.8 4.6 -1.6 10 3.0 4.5 -1.5 Assurance (Item 10 – 13)2.9 4.4 -1.5 11 3.3 4.5 -1.2 12 3.4 4.4 -1.0 13 3.3 4.4 -1.1 14 3.0 4.4 -1.1 Empathy (Item 14 – 16)3.0 4.4 -1.4 15 3.0 4.5 -1.5 16 3.0 4.4 -1.1 17 4.0 4.5 -0.5 Tangible (Item 17 – 21)3.6 4.5 -0.9 18 3.5 4.5 -1.0 19 3.4 4.5 -1.1 20 3.5 4.5 -1.0 21 3.3 4.4 -1.1 1.1. interpreting the ratings in a two-dimensional visual grids using Importance Performance Analysis Table 5. Ratings in a two-dimensional visual grid No Indicators Performance (X) Expectation (Y) Quadrant Dimension 1 Honesty in delivering service 3.6 4.3 IV Reliability 2 Ability to make problem solution 3.2 4.4 IV 3 Employee readiness in serving 2.7 4.4 I 4 Punctuality in promises 2.9 4.5 I 5 Satisfactory service 2.9 4.5 I Reliability Total Average 3.06 4.42 6 Willingness to help 3.3 4.4 IV Responsiveness 7 Care 3 4.6 III 8 Good communication 3 4.4 III 9 Quickness in serving 2.8 4.6 III Responsiveness Total Average 3.025 4.5 10 Satisfactory service 3 4.5 I Assurance 11 Clearly information 3.3 4.5 II 12 Employee hospitality 3.4 4.4 IV 13 Employee politeness 3.3 4.4 IV Assurance Total Average 3.25 4.45 14 Employee’s respect 3 4.4 III Empathy 15 Responsibility 3 4.5 I 16 Willingness to listen 3 4.4 I Empathy Total Average 3 4.43 17 Neatness in employee’s dress 4 4.5 II Tangible 18 The room were comfortable 3.5 4.5 II
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19 Completeness secretariat room 20 Cleanliness of the room 3.5 21 Room layout 3.3 4.4 Tangible Total Average 3.54 Performance and Expectation Mean
3.4 4.5 IV 4.46 3.18
4.5 II
II
4.46
Based on X value = 3.54 and Y value = 4.46 the mean score of performance and expectation is shown on table VI, as well as the axis point of IPA quadrant. Figure 4 shows the results of IPA for all dimensions and Figure 5 shows the results of IPA for the entire attributes. Empathy is on the quadrant A; Tangible and Assurance are on the quadrant B; Reliability and Responsiveness is on the quadrant C.; none of dimension is on the quadrant D.
Fig. 2. a). Importance Performance Analysis by Dimension and b) Importance Performance Analysis by Attribute Quadrant A is a group of attributes that affect service quality as an important one but performed poorly. It consists of: 1) Satisfactory service; 2) Punctuality in promise; 3) Employee readiness in serving; 4) Care; 5) Satisfactory service; 6) Responsibility; and 7) Willingness to listen. Quadrant B is a group of attributes rated as being of high importance and delivered with high performance It consists of: 1) Clearly information; 2) Neatness in employee’s dress; 3) The room are comfortable; 4) Completeness of secretariat room; 5) Cleanliness of the room. Quadrant C is a group of attributes containing variables that are low in both importance and performance. It consists of: 1) Good communication; 2) Quickness in serving; 3) Employee’s respect. Quadrant D is a group of attributes including variables that are of low importance but high performance. It consists of: 1) Honesty in delivering service; 2) Ability to make solutions to problems; 3) Willingness to help; 4) Employee hospitality; 5) Employee politeness; 6) Room layout. 2. Conclusion This study was conducted to deepen the understanding of user perception regarding faculty service and their level satisfaction to the faculty service. The result of the survey shows that there is a gap in service quality in the faculty service. There are several points that need to be focused in order to increase the services. The biggest gap from service quality dimension occurs in assurance, and then empathy, whereas responsiveness shares the same amount of gap after the first one and then followed by reliability, the smallest gap is the tangible. Based on every single item on the service quality, one point has the lowest score according to the gap between performance and expectation. The item is employee readiness in serving. This is indicating that the faculty services tend to be less care about students complaints. The students are aware that the faculty service has positive impact on their facility of study. It is expected that faculty service are considered helpful and able to instill trust on them. This would encourage students and increase faculty service staff morale. The tangibility of the faculty service is performed well, employee’s dress is modestly, the room is clean, comfortable, and the facility is quite complete. There is indeed potential for the secretariat to improve the service and facility to support student’s learning process. Most students are not satisfied with the empathy of faculty service staffs. The employees are considered less able to explain and provide information clearly. Friendliness and courtesy of employees are also considered bad. The faculty service should investigate this matter further and if the services are well managed then it is likely that the satisfaction of student will increase and will spread throughout all faculties in the university. The value-added service and information resources provided by faculty services are unable to be obtained from social media account because the faculty service does not own particular account to serve student’s needs of information. In general, the result implies that the faculty service has
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to pay more attention on empathy to the student. Faculty service must keep their promise, and always ready and have willingness to help students. Satisfaction of services emerges from each point of services that are delivered and that fulfill students’ expectation. References [1] Zeithaml, V.A., Bitner, M.J., and Gremler, D.D. 2009. Services Marketing: Integrating Customer Focus Across the Firm, 5th ed., McGrawHill, [2] Kiran, K. 2009. Service quality and customer satisfaction in academic libraries, library review, Vol. 59 No. 4, 2010 pp. 261-273 [3] Pariseau, S.E., McDaniel, J.R.1997. Assesing service quality in schools of business”, International Journal of Quality & Reliability Management, vol. 14 Iss 3 pp. 204 – 218 [4] Ennew, M.T., Reed, G.V., Binks, M.R. 1993. Importance-Performance Analysis and the Measurement of Service Quality, European Journal of Marketing, Vol. 27 Iss 2 pp. 59 – 70 [5] Chu, R. 2002, Stated-Importance versus derived-importance customer satisfaction measurement, Journal of service marketing, Vol. 16 Iss 4 pp. 285 – 301 [6] Tschohl, John (2008), Empowerment-the key to quality service, Managing Service Quality: An international Journal, vol. 8 Iss 6 pp. 421 – 425 [7] Mihelis, G., Grigoroudis, E., Siskos, Y., Politis, Y., Malandrakis, Y. (2001). Customer Satisfaction measurement in the private bank sector, European journal of Operational Research 130 (2001) 347 – 360 [8] Martilla, J.A. and James, J.C., (1977), Importance-performance analysis, Journal of Marketing, Vol. 41 No.1, pp. 77-9 [9] Tjiptono, F. 1997), Strategi Pemasaran, 1st ed, Yogyakarta: Andi [10] Busacca, Alessandro Arbore Bruno, (2011), Rejuvenating importance performance analysis, Journal of Service Management, Vol. 22Iss 3 pp. 409–429 [11] Jung, S.K. J. & Boger, E. Y. C. A. (2010), Imporatance performance analysis with benefit segmentation of spa goers, International Journal of Contemporary Hospitality Management, Vol. 22 Iss 5 pp. 718 – 735 [12] McDermott, P. & Prajogo, D. L., (2011), Examining competitive priorities and competitive advantage in service organizations using Importance Performance Analysis matrix, Managing service Quality: an International Journal, Vol. 21 Iss 5 pp. 465 – 483
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Demand Forecasting for Perishable Asset in Importer Company (PT TMM) Mahaning Indrawaty Wijaya, Ratih Hendayani, Sri Widiyanesti Economics and Business Schools, Telkom University JL. Telekomunikasi no.1TerusanBuahBatu Bandung 40257, West Java, Indonesia Economics and Business School of TELKOM University
Abstract Gaps between sales target and their realization in perishable assets cause overstock and understock. Both of them, in the end will potentially decrease a corporate’s profitability. In the last two years, there have been significant gaps between sales target and their realization in PT. Tunas Maju Mandiri (PT.TMM) as a company which has a focus in importing horticultural products. Therefore, it is necessary to make forecasting to know the number of demand in the future, so that appropriate target can be made. Data were collected by doing a direct interview with PT.TMM and by collecting historical data on PT.TMM’s perishable asset target and demand. Based on the collected data, three types of product with highest sale rates were selected; those are China apples, Thailand longans, and China oranges. After that, the data were analyzed using Microsoft Excel, Minitab, and Zaitun Time Series with various kinds of methods such as Naïve Approach, Moving Average, Single Exponential Smoothing, Double Exponential Smoothing (Holt), Triple Exponential Smoothing (Winter), and Trend Projection. One best method was chosen to forecast the future demand. The selection of the best method was based on the lowest error rate to be shown by MAPE (Mean Absolute Percent Error). The result shows that Triple Exponential Smoothing has the lowest error rate for the three types of product, which means this is the best method to forecast the future demand of PT.TMM’s perishable asset.
© 2014 Mahaning Indrawaty Wijaya, Ratih Hendayani, Sri Widiyanesti. Published by Telkom Pub.Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia Keywords: demand, forecast, horticulture, importer, perishable asset
1.
Introduction
PT. Tunas Maju Mandiri (hereinafter referred to PT. TMM) is a global company which focuses on importing horticulture products. Economics and politics are external factors that often affect PT. TMM business as a global company which has to be able to avoid threats and utilize chances [1]. Economic and political instability led to changes in regulations that PT. TMM have to obey. For example, as a result of the Permendagri (Regulation of Interior Minister) No. 7 in 2013 about opening thirteen horticulture taps as a way to stabilize horticulture products, many parties registered themselves to be horticulture importers and thus the number of the horticulture importers increased to more than 100%, from 79 importers in the first semester in 2013 to 169 importers in the next semester [2]. The increasing number of competitors can be a threat to the accomplishment of PT. TMM business objectives, whose goal of business is to get profits. This happens because customers will have more choices in selecting horticulture importers; and overall this can reduce the profitability of the company as a result of a reduced number of customers due to movement of consumers to competitors. In an attempt to gain the advantage, PT. TMM plans sales targets every month. Often that target planning was not achieved; in the last two years there has been a 14% gap between target and actual sales, where the biggest gap occurred in China oranges (22%). That gap caused overstock which led to the company’s losing money due to unsold goods stacked in the warehouses, because the nature of the horticultural products are perishable
* Corresponding author. Tel.: +62-22-70043321 E-mail address : [email protected]
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(easily decomposed) [3] [4] [5]. It also causes understock, i.e. the number of stock is below the number of demand. That caused PT. TMM to lose the opportunity to sell or even lose the customers. These indicate that PT.TMM has not made any optimal capacity planning. Therefore, PT. TMM needs to establish a better capacity planning in the future. This can be done by forecasting its future demand [6] [7]. There are many methods of forecasting. Yet, in general, forecasting can be done both quantitatively and qualitatively. Yet quantitative forecasting is more often used in the business world because this approach uses a set of numbers to forecast; these numbers are usually the events in the past, such as the product sales in the previous years, market surveys, or other research [8]. The most common quantitative method that is used in forecasting demand is time series method [9]. In time series method, there are several models that are often used, such as moving average, exponential smoothing, and trend projection [9]. Of these methods, the best method will be selected. The best forecasting method is a method that has the smallest deviation of the actual values [10]. A number of research have been done previously by a number of researchers to determine which forecasting method was the best in predicting a wide range of variables or objects. For instance, a research conducted by Kumar and Sahu [11] foresees demands for milk products (paneer) in Chhattisgarh; it showed that the most suitable method was single exponential smoothing. Then a research by Akkurt, et al. [12], regarding forecasting of natural gas usage in Turkey, showed that the most suitable method is the double exponential smoothing for annual forecast and SARIMA for monthly forecast. Further research, Sahu [13] showed that the naive method and semi-average method is the best method to predict sweet curd in Chhattisgarh, India. A research conducted by Candra and Sarjono [14] showed that the most appropriate method for predicting spring beds are linear regression. Research that was conducted by Daniel [15] showed that moving average method is the most appropriate method to predict the yielded production of plastic in manufacturing companies. Those previous research indicate that the best forecasting method differs for each item or variable forecasted. Therefore, this research aims to find out the best forecasting method in foreseeing PT.TMMs products demand in the future hence PT. TMM could sell as many as the target and avoid loss that is caused by surplus or shortage of goods. 2.
Methodology
This research is a descriptive quantitative research which aims to describe object characteristics [16] by using a set of numbers [17]. Both primary data and secondary data were used. Primary data were obtained by conducting unstructured interviews; the researchers did not use the guidelines that have been arranged, but only used the questions outlined to be asked [18] to the general manager of PT. TMM to find out about the perishable products. Secondary data were obtained with documentary study method that was done by collecting chosen documents appropriate for the goal and focus of the problem [19], such as historical data of PT.TMMs perishable asset demand and sales from February 2012 until January 201, and also all information that is related to this research. Then the collected data were analyzed using time series as a research variable. Six time series methods were used as variable attributes of this research, namely Naïve Approach, Moving Average, Single Exponential Smoothing, Double Exponential Smoothing (Holt), Triple Exponential Smoothing (Winter), and Trend Projection. The data were processed with Microsoft Excel, Minitab, and Zaitun Time Series. Microsoft excel was used to count the error rate of naïve approach method. Minitab was used to count the error value of moving average, exponential smoothing, and trend projection methods. Meanwhile Zaitun Time Series [20] was used to determine the optimum value of alpha, beta and gamma for triple exponential smoothing. After the data were processed, one best method was chosen based on the smallest error rate that would be shown by MAPE to forecast the future demand of PT. TMMs perishable assets. The model could be seen in Figure 1.1 Perishable Asset of PT. TMM
Time series: 1. Naïve Approach 2. Moving Average 3. Single Exponential Smoothing 4. Double Exponential Smoothing (Holt) 5. Triple Exponential Smoothing (Winter) 6. Trend Projection
Demand Forecasting
Historical data of PT.TMMs products demand
Quantitative Forecasting Best Forecasting Method Forecasting result for next year
Fig. 1.1 Methodology
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Demand Forecasting for Perishable Asset in Importer Company (PT TMM)
2.1.
Operational Variables Table 1.1 Operational Variables
Variable Time Series Method
Forecasting Error
Attribute Naïve Approach Moving Average Single Exponential Smoothing
Scale Ratio Ratio Ratio
Double Exponential Smoothing (Holt) Triple Exponential Smoothing (Winter)
Ratio Ratio
Trend Projection
Ratio
MAPE (mean absolute percent error)
Ratio
2.1.1. Naïve Approach Naïve approach method can be done by assuming the demand in the future will be equal to the demand in the last period [9]. 2.1.2. Moving Average Moving average method is a method that uses the average of ‘n’ last period demand to forecast the next period demand. Mathematically, simple moving average is expressed as follows [9]: Moving Average
(1)
(n = total periods in moving average) 2.1.3. Single Exponential Smoothing Single Exponential smoothing is a method whose data plots are weighted by an exponential function. The equation of single exponential smoothing is written down as follows [9] Ft = Ft-1 + α (At-1 – Ft-1)
(2)
In which: Ft = new forecast Ft-1 = previous forecast α = smoothing constant At-1 = previous actual demand 2.1.4. Double Exponential Smoothing (Holt) Exponential smoothing should be changed when a trend is detected. It can be done by calculating the average of exponential smoothing data, and then adjusting it with positive or negative delay (lag) in the trend, so it is also called exponential smoothing method with trend adjustment or double exponential smoothing (Holt). Here is the formula of exponential smoothing with trend adjustment [9] Ft = α (At-1) + (1- α) (Ft-1+ Tt-1)
(3)
Whereas, for trend adjustment the following equation [9] can be used. Tt = β (Ft - Ft-1) + (1-β) Tt-1
(4)
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In which: Ft = forecasting with exponential which is smoothed from time series data at period of t Tt = trend with exponential which is smoothed at period of t At = actual demand in period of t α = smoothing constant for average (0 ≤ α ≤1) β = smoothing constant for trend (0 ≤ β ≤ 1) 2.1.5. Triple Exponential Smoothing (Winter) When seasonal pattern is detected, equation needs to be modified to adjust the seasonal pattern. This method is also named exponential smoothing with seasonal adjustment or triple exponential smoothing (winter). The mathematical equation for exponential smoothing with seasonal adjustment is written as follows [10] Ft = α
+ (1- α) (Ft-1+ Tt-1)
(5)
In which: Ft = forecasting with exponential which is smoothed from time series data at period of t Tt = trend with exponential which is smoothed at period of t = seasonal estimate p = forecasted periods s = length of seasonality Trend adjustment (Tt) can be done by using this following equation [10] Tt = β (Ft - Ft-1) + (1-β) Tt-1
(6)
Whereas seasonal adjustment (St) can be smoothed by . The mathematical equation from seasonal adjustment can be written as follows [10] St =
+ (1-
(in which
is smoothing constant for seasonal, 0 ≤
(7) ≤ 1)
2.1.6. Trend Projection Trend projection is the method in accordance with the trend line of the data plots in the past, and it is projected into the future forecasting. In mathematics, the trend equation is written as follows [9] ŷ = a + bx
(8)
In which: ŷ = calculated value from variable which will be predicted (dependent variable) a = y-axis intersection b = regression slope x = independent variable Regression slope can be known by the following equation [9] (9)
b= In which: b = regression slope x = known independent variable value y = known dependent variable value = x value average
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Demand Forecasting for Perishable Asset in Importer Company (PT TMM)
= y value average n = number of data or observation Once the value of b is known, the value of a (y-axis intersect) can also be determined by the following equation [9] (10)
a= 2.1.7. MAPE
Each forecasting method certainly contains errors, namely the difference between the results of forecasting and the actual situation. Calculating forecast error aims to show how well the forecasting method works by using historical data. There are some calculations that are commonly used to calculate total forecast errors. Yet, the calculations will produce consistent results when they are used to evaluate different forecasting methods [10]. Thus, to obtain information about what forecasting method is the best, one sort of calculation can be chosen. One error calculation that is used is MAPE. MAPE (mean absolute percent error) is the average of absolute differentiation between the predicted value and the actual value, expressed as a percentage of the actual value. The equation of MAPE is written as follows [9]: (11)
MAPE = 3. Results and Discussion 3.1. Testing Demand Forecasting Method of PT. Tunas Maju Mandiri’s Perishable Asset
Testing forecasting method was done to know what forecasting method is the most appropriate to forecast the perishable asset. The best method is the method that has the lowest error rate. Forecasting is made for the products that dominate company product’s sales, namely; China apples, Thailand longans and China oranges. Other products were not forecasted because the proportion was small and there were so many variations that a classification process is difficult to do.
Figure 4.1 Percentage of PT Tunas Maju Mandiri’s Imported Fruit Sales February 2012 – January 2014 Period Figure 4.1 shows that the sales are dominated by China apples, followed by Thailand longans and China oranges. The rest are a wide range of products, which is 20% of the total sales. From the various fruits that are sold, there is a gap between the target and actual sales. The target, sales and gap can be seen in Table 4.1 Table 4.1 Target and Actual Sales PT. TMM period February 2012-January 2014 Product name Target Sales
Gap
China apples
52,535
49,288
6%
Thailand longans
41,820
36,918
12%
China oranges
35,935
28,041
22%
Others
35,820
28,114
21%
Total
166,110
142,361
14%
Source: PT. TMM document
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Based on Table 4.1 it can be seen that during the last two years, there has been 14% gap between the target and actual sales. Therefore, a better capacity planning has to be made in the future to minimize the gap. Based on the calculation using Microsoft Excel, Minitab 16, and Zaitun Time Series, forecasting error rate of each method can be determined. The rates can be seen in Table 4.2. Table 4.2 Comparison of Forecasting Methods Error Rate (MAPE) Forecasting Method China apples Thailand longans Naïve Approach Moving Average Single Exponential Smoothing Double Exponential Smoothing (Holt) Triple Exponential Smoothing (Winter) Trend Projection
38% 21% 31% 35% 11% 29%
25% 21% 24% 23% 11% 23%
China oranges 47% 43% 48% 46% 17% 48%
Based on Table 4.2 it can be seen that in predicting the demand for PT.TMMs China apples, Thailand longans, and China oranges, triple exponential smoothing (winter) is the method that has lowest error rate (MAPE). Thus, this method is the most appropriate to forecast the products in the future. However, the error rate of the method in predicting China apples (11%) was greater than the gap between the target and the sales of China apples (6%). This means this method is not better than the capacity planning effort done by PT. TMM previously, namely by intuition. However, the results are still taken into consideration in the company’s decision-making. The results of demand forecasting by using a triple exponential smoothing (winter) can be seen in Table 4.3
Table 4.3 Forecasting results for Perishable Asset February 2014-January 2015 Month
China apples
Thailand longans
China oranges
February March April May June July August September October November December January
2,955 2,177 1,916 1,728 1,599 2,800 3,353 1,362 1,381 1,992 2,642 2,146
2,022 1,443 1,087 1,221 1,347 1,988 2,508 1,303 1,192 1,351 1,634 1,616
1,744 1,488 866 660 880 1607 2,199 747 558 682 1,274 1,342
Total
26,051
18,712
12,706
Based on Table 4.3, it can be seen that the demand of PT. TMM perishable assets during February 2014 - January 2015 period would fluctuate, where the highest demand was for China apples, Thailand longans, and China oranges that would occur in August. In this period, China apples sales is predicted to reach 26,051 boxes, 18,712 boxes Thailand longans and 12,706 boxes China oranges.
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4.
CONCLUSION AND RECOMMENDATION
4.1. CONCLUSION 1) Based on the calculation of error rate from each forecasting method for each product, the result shows that in the case of China apples, the gap is already smaller than the lowest error rate of the forecasting methods, and thus the prediction done by PT.TMM using intuition is the most appropriate method to forecast the demand for Chinese apples. Yet, for the other two products, Thailand longans and China oranges, triple exponential smoothing method (winter) has the smallest error rate. Thus, triple exponential smoothing method (winter) is the most appropriate method to forecast Thailand longans and China oranges in February 2014 - January 2015 period. 2) Based on the data processing, it can be seen that during February 2014 - January 2015 period, the demand for China apples will reach to 26,051 boxes, Thailand longans will reach 18,712 boxes and China oranges will reach 12,706 boxes. During the forecasting period, the demand will fluctuate, where the highest demand for China apples, Thailand longans, and China oranges will occur in August, while the lowest demand for those three products will occur in May 4.2. RECOMMENDATION 1) Based on the result of the data processing, PT TMM should make demand forecasting using triple exponential smoothing (winter) for the perishable products as a means to minimize the forecasting error and risk of loss that are caused by uncertainty in the future. Moreover, that means is easy, fast, and objective to be used and therefore PT.TMM could make good forecasting of their products. 2) Further research should consider other variables that might affect the sales of PT.TMM perishable assets, such as weather, and macroeconomic factors. REFERENCE
[1] David, Fred R. (2013). Strategic Management Concept and Cases. England. Pearson Education Limited [2] http://nefosnews.com/post/ekbis/nasib-petani-terancam-pemohon-jadi-importir-buah-naik-100-persen Nasib Petani Terancam, Pemohon Jadi Importir Buah Naik 100 Persen. 16 Desember 2013. Accessed at March 5th (2014) [online] [3] Jederman, Reiner. et al. Reducing food losses by intelligent food logistics. Phil. Trans. Royal Society. May 2014. [4] Giri, B.C and Chaudhuri, K. S. Deterministic Models of Perishable Inventory with Stock-dependent Demand Rate and Nonlinear Holding Cost. Volume 105, Issue 3, March 1998. [5] Feng, Youyi. Perishable Asset Revenue Management with Markovian Time Dependent Demand Intensities. Volume 46, Issue 7 July 2000. [6] Tilman, David. Forecasting Agriculturally Driven Global Environmental Change. Science Magazine. Vol. 292 no. 5515 April 2001. [7] Clottey, Toyin. et al. Forecasting Product Returns for Remanufacturing Operations. Decision Sciences Journal. Volume 43, Issue 4, August 2012. [8] Kosasih, Sobarsa. (2009). Manajemen Operasi. Jakarta. Mitra Wacana Media. [9] Heizer, Jay dan Barry Render. (2009). Manajemen Operasi. Jakarta. Salemba Empat [10] Hanke, John E. et al. (2001). Business Forecasting Seventh Edition. New Jersey. Prentice-Hall, Inc. [11] Sahu, Pradeep Kumar dan Rajesh Kumar. Demand Forecasting For Sales of Milk Product (Paneer) In Chhattisgarh. International Journal of Inventive Engineering and Sciences (IJIES) Vol.1 No.9 August 2013. [12] Akkurt, Mustafa, et al. Forecasting Turkey’s Natural Gas Consumption by Using Time Series Methods. European Journal of Economic and Political Studies. Vol.2, 2010. [13] Sahu, Pradeep Ku. Use of Time Series Models for Sales Foreecasting of Sweet Curd in Chhattisgarh, India. International Journal of Innovative Research and Studies Vol.2 No.12 [14] Sevenpri Candra dan Haryadi Sarjono. Forecasting for Inventory Control. Journal of Supply Chain Management, Vol.6 June 2012 [15] Ezeliora Chukwuemeka Daniel, et al. Moving Average Analysis of Plastic Production Yield in a Manufacturing Industry. International Journal of Multidiciplinary Sciences and Engineering Vol.4, No.2, February 2013 [16] Zikmund, William G. et al. (2010). Business Research Methods 8th Edition. United States of America. South Western. [17] Nasehudin, Toto Syatori, dan Nanang Gozali. (2012). Metode Penelitian Kuantititatif. Bandung. CV Pustaka Setia [18] Sugiyono. (2012). Metode Penelitian Kuantitatif, Kualitatif, dan Kombinasi (Mixed Mothod). Bandung. Alfabtea, CV [19] Sukmadinata, Nana Syaodih. (2012). Metode Penelitian Pendidikan. Bandung. PT. Remaja Rosdakarya. [20] Badan Pusat Statistik. Zaitun Time Series Mengikuti Ajang Asia Pacific ICT Awards 2009 di Melbourne [Online]. http://www.bps.go.id/eng/aboutus.php?info=38 (27 Juni 2014)
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Do Malaysian Managers Understand the Learning Organization Concept? A Case Study of Malaysian Bankers Mohamed Yazam Sharif1 1
School of Business Management,Universiti Utara Malaysia,06010 Sintok, Kedah,Malaysia,
Abstract The aim of the paper is to present findings on the perceptual understanding of managers on the concept or construct of learning organization. Learning organization concept has been around in the literature since the early 1990s. Many studies have been conducted worldwide. Some agrees with it while others have their doubts. Grieves (2008) has even questioned the wisdom of retaining the concept. The researcher believes that there is much that we do not know. In developing countries (including in Malaysia), there are still a lot of interest in it. This study reflects the need for further research in the area. The sample was 20 Malaysian bank managers. In-depth interviews conducted spanning a week with each interview that takes one hour to complete. An interview protocol of 10 broad questions were created based on issues raised by quantitative scholars through their long tested instrument called the ‘Dimensions of Learning Organization Questionnaire’ (DLOQ) developed by Marsick and Watkins (2003). The findings were audio-taped and transcribed. The general findings were that the interviewed bankers knew the word ‘learning organization’. They were eager to embrace the concept as it encourages innovation and employee commitment. But there were no conscious efforts by the top management of their respective institutions to translate it into reality through incorporating it into their strategic plans or bank policies. It is concluded that generally the bankers who were interviewed did not fully understand or appreciate the concept and its potential benefits.
© 2014 Mohamed Yazam Sharif. Published by Telkom Pub. Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia. Keywords: Bank, case study, learning organization, Malaysia, qualitative study
1. Introduction The banking sector in Malaysia is one of the most dynamic sectors in Malaysia and possibly in South East Asia. It is the backbone of Malaysia’s economy. In spite of the scenario for global financial markets and world economic being gloomy, the financial health of the commercial banks operating in Malaysia is sound. The Association of Banks in Malaysia (ABM) representing the banks feels that commercial banks in Malaysia are in a strong position to execute their responsibilities and support domestic economic activities. The Malaysian Central bank strict monitoring and control has ensured that the Malaysian banking industry has been to a large extent insulated from the global financial crisis. The experience gained from the 1997-98 Asian financial crisis and the reforms undertaken thereafter have significantly strengthened the banking industry. But as banking organizations, whatever they enjoy in the first decade of the 21st century could be attributed to good management practices. One of the management concepts espoused by scholars since the 1990s is the concept of learning organization which can be a strategic tool for achieving success by any organization. The question posed in this paper is that have the banking institutions in Malaysia practiced the learning organization concept in their business and are the bank mangers (both top managers and functional managers) aware of the benefits of practicing the learning organization concept?
E-mail: [email protected]
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1.1. Definitions of Learning Organization Over time, there have been several definitions of learning organization that have been developed by scholars. But this paper would like to highlight just five prominent definitions which have been widely cited (Table 1). The concept of learning organization was made popular through Peter Senge’s (1990) publication called ‘The Fifth Discipline’. He defined learning organization as an organization which encourages continuous learning among its employees. Other scholars (Garvin, 1993; Moilanen, 2005; Pedler et al., 199; Watkins & Marsick, 1996) added other elements such as the existence of learning culture and transformation among the organization’s members on a continuous basis that would assist in the practices of a learning organization. Table 1 Sample definitions of learning organization
Author Senge (1990)
Garvin (1993)
Definition of learning organization An organization where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning how to learn An organization skilled at creating, acquiring and transferring knowledge and at modifying its behavior to reflect new knowledge and insights
Pedler et al. (1991)
An organization that facilitates learning for all its members and consciously transforms itself and its context
Moilanen (2005)
A learning organization is a consciously managed organization with learning as a vital component in its values, visions and goals as well as in its everyday operations and their assessment An organization that is characterized by continuous improvement and the capacity to transform
Watkins and Marsick (1996)
Learning organization constructs Personal mastery Mental models Shared vision Team learning Systems thinking Systematic problem solving Experimentation Learn from past experience Learning from others Transferring knowledge A learning approach to strategy Participative policy making Informating Formative accounting and control Internal exchange Reward flexibility Enabling structures Workers as environmental scanners Intercompany learning Learning climate Self-development opportunities Driving forces Finding the purpose Questioning Empowering Evaluating Continuous learning Dialogue and inquiry Team learning Embedded system Empowerment Leadership Financial performance Knowledge performance
Source: Sharifrad (2011), p. 664.
1.2. The Development of the Studies on Dimensions of Learning Organization Questionnaire (DLOQ) There are several tools which have been developed by researchers to measure elements of learning organization (Sharifrad, 2011). But for this paper, the focus is on the tool called “Dimensions of the Learning Questionnaire” (DLOQ),
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which was introduced by Watkins and Marsick (1998). It is organized into five sections emphasizing individual level, team level and organization level learning and measuring the financial performance of the organization, with the last section gathering information about the organization and the role of respondents in that organization. The questionnaire is organized around seven dimensions: 1. Creating continuous learning opportunities; 2. Promoting inquiry and dialogue; 3. Encouraging collaboration and team learning; 4. Establishing systems to capture and share learning; 5. Empowering people towards a collective vision; 6. Connecting the organization to its environment; 7. Modeling/supporting learning as well as measuring financial and knowledge performance (Marsick & Watkins, 1999, p.50). The instrument was intended to gauge the perceptions of employees regarding these seven constructs at a particular point in time, i.e. take the pulse of an organization at that time. According to Jamali, Sidani and Zouein (2009), based on their review of the seven measurement instruments, they found that the DLOQ of Watkins and Marsick (1998) meets the criteria of comprehensiveness, depth and validity. But the DLOQ had been revised many times and scientifically validated to be reliable (Marsick & Watkins, 2003; Yang, 2003).
1.3. The Research Framework For a qualitative study, it is not usually necessary to have a research framework. But a guiding framework could be helpful in guiding the researcher’s thinking (Creswell, 2013). In this study, the guiding framework looks as the concept of learning organization as the dependent variable and the respondent’s demographics as the independent variable (Figure 1). Independent Variable
Dependent Variable
Respondent’s demographics
Concept of Learning Organization
Figure 1 the Guiding Framework
2. Method The study had adopted the qualitative case study method to investigate the learning organization phenomenon among Malaysian bankers. Creswell (2013) stated that the case method is suitable for studying in-depth issues. The qualitative case study is a method which involves in-depth interviews with identified respondents or interviewees in their natural setting. According to Yin (2009), “… as a research strategy, the case study is used in many situations to contribute to our knowledge of individual, group, organizational, social, political and related phenomena” (p.1). The sample was 20 Malaysian bank managers of banks located in northern Peninsula Malaysia. The banks were Malayan Banking, Public Bank, Ambank, RHB Bank, CIMB Bank, Affin Bank, Alliance Bank, Citi Bank, HSBC Bank and Bank Islam. In-depth interviews were conducted spanning a week with each interview taking one hour to complete. An interview protocol of 10 broad questions were created based on issues raised by quantitative scholars through their long tested instrument called the ‘Dimensions of Learning Organization Questionnaire’ (DLOQ) developed by Marsick and Watkins (2003)(see Table 2 for the List of Questions). The findings were audio-taped and transcribed.
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Table 2 List of Ten Questions No. 1 2 3 4 5 6 7 8 9 10
The Questions Are you familiar with the word ‘learning organization’? Where did you first hear about the word? What does it mean? Is it listed formally in your organization’s strategic plan? If Yes, since when? Even if it is not in your strategic plan, is it part of the practice in your organization? Are you supportive of the idea of the learning organization? Why? Do you think your senior management knows about the concept of a learning organization? Do you think your senior management is supportive of the idea of a learning organization? Why? Are you willing to champion the concept of learning organization in your organization should you have the opportunity to do so? Why? Which learning organization are you aware of?
3. Results and discussions
3.1
Profile of Respondents
There were 20 interviewees from ten commercial banks located in northern Peninsula Malaysia (two from each bank (Table 3). From the 20 interviewees, four were female managers. In terms of ethnic group, all were Malays. The interviewees were in the 30 to 40 year-old age group. In terms of qualification, 19 had a bachelors’ degree and one had an MBA degree. In terms of banking experience, these bankers had between five to fifteen years of experience. They were the right people who would know the management practices of their respective organizations. Table 3 General Profiles of the Interviewees
3.2
No.
Item
Result
1 2 3 4
Gender Ethnic Group Age group Qualification
5
Experience
4 Females; 16 Males 20 Malays 30 to 40 years old 19 bachelor’s degree; 1 MBA 5 – 15 years
Total Interviewee 20 20 20 20 20
Familiarity with the Word ‘Learning Organization’
All of the 20 interviewees claimed that they knew about the word ‘learning organization’. But the depth of their knowledge differs. The two managers of the banks which had the ‘learning organization’ incorporated in its strategic plan were quite knowledgeable about the concept of ‘learning organization’. Others knew about the meaning of the word through various means like from television, newspapers and the internet. But they seemed to interpret that the learning organization practices were about training of employees at various levels.
3.3 The Meaning of Learning Organization Two interviewees answered the question correctly. But the other 18 seemed to relate the learning organization to mainly training of employees (Table 4).
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Table 4 Meaning of Learning Organization No. 1
Name of Bank (coded) Bank A
2
Bank A
3
Bank B
4 5
Bank B Bank C
6 7
Bank C Bank D
8 9 10 11
Bank D Bank E Bank E Bank F
12 13 14 15
Bank F Bank G Bank G Bank H
16 17
Bank H Bank I
18
Bank I
19
Bank J
20
Bank J
Reply It is an organization which encourages learning among employees continuously… It is an organization that nurtures learning among its employees on a continuous basis… Organization which invests a lot in training of employees… Organization which emphasizes employee training… …Training of employees is important to that organization… Organization which likes the training of employees... Organization with training of workers in mind all the time … Organization that focuses on employee training… It is an organization with training focus… Organization with employee training in mind… It is an organization that emphasizes on training of workers …. Organization with employee training as the aim... Organization that is interested in employee training… Organization with training of employees in mind…. Organization that wants to train employees all the time... Organization with employee training as its goals… Organization that is interested in improving employee skills through training… Organization that wants skilled workers through training… Organization that focuses on training of skilled employees… Organization which is interested in always improving the skills of employees by training them all the time…
3.4 Support of the Idea of Learning Organization The 20 interviews gave a unanimous answers that they like the concept of learning organization for the benefits it would give to increase employee commitment and motivation at work and they would support its implementation in their organizations (for banks which did not yet incorporate the learning organization concept into their respective strategic plans).
3.5 Awareness of Top Management on the Concept of Learning Organization According to the 20 interviewees, they believed that all of their top management (or senior management) were aware of the concept of the learning organization. But only the top management of one bank had put the idea into practice by incorporating it into their strategic plan. The top management of the other nine banks, however, did not give much emphasis on the learning organization concept in their operations.
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3.6 The Interviewees’ Knowledge of the Learning Organization Model Two interviewees mentioned the Learning Organization model created by Senge (1990). The other 18 interviewees either stated that they did not know or they mentioned the model by Peter Drucker. As Drucker, a famous professor of management, did not create any learning organization model during his lifetime (1909 – 2005) (Denning, 2014), this showed that many among the bankers who were interviewed did not know much about the learning organization models. 4. Conclusion Generally the 20 respondents who were interviewed claimed that they knew about the concept of learning organization. However, only two respondents from the same bank stated that the concept was formalized in their organization’s strategic plan. The other nine banks did not incorporate the learning organization concept in their strategic plans. Nevertheless all the ten banks seemed to record excellent financial performance in the last ten years. This implied that most of the ten banks did not focus on the learning organization concept. Probably they were using other business models that could give them good returns. For now, they are making good returns. But banking is not just about making money for a period of time. It is about continuous performance (Wolf, 2008) and sustainability (Fenwick, 2007). In the long run, the business of banking is about fulfilling employees’ needs, customers’ needs and staying competitive in the growing globalized environment in order to survive. A model which can help a bank to adjust quickly to the changing environment is very important. It has been recognized by many banking scholars and practitioners worldwide that the learning organization is one of the most effective models which can keep banks to remain competitive (Dymock & McCarthy, 2006; Nazari & Lope Pihie, 2012; Ortenblad, 2004; Rowley & Gibbs, 2008; Yeo, 2005). It is recommended that the Malaysian banks give the learning organization concept a chance.
References Creswell, J.W. (2013). Qualitative Inquiry and Research Design (3rd Ed.). Singapore; Sage. Denning, S. (2014). The Best Practice of Peter Drucker. Forbes, August 29. Dymock, D. & McCarthy, C. (2006). Towards a learning organization? Employee perceptions. The Learning Organization, 13(5), 525 – 536. Fenwick, T. (2007). Developing organizational practices of ecological sustainability: A learning perspective. Leadership & Organizational Development Journal, 28(7), 632 – 645. Garvin, D.A. (2000). Learning in Action: A Guide to Putting the Learning Organization to Work. Boston: Harvard Business School Press. Grieves, J. (2008). Why we should abandon the idea of the learning organization. The Learning Organization, 15(6), 463 – 473. Jamali, D., Sidani, Y. & Zouein, C. (2009). The learning organization: tracking progress in a developing country – A comparative analysis using the DLOQ. The Learning Organization, 16(2), 103 – 121. Marsick, V. & Watkins, K. (2003). Demonstrating the value of an organization’s learning culture: the dimension of the Learning Organization Questionnaire. Advances in Developing Human Resources, 5(2), 132 – 151. Nazari, K. & Lope Pihie, Z.A. (2012). Assessing Learning Organization Dimensions and Demographic Factors in Technical and Vocational Colleges In Iran. International Journal of Business & Social Science, 3(3), 210 – 219. Ortenblad, A. (2004). The learning organization: an integrated model. The Learning Organization, 11(2), 129 – 144. Pedler, M., Burgoyne, J.D. & Boydell, T. (1991). The Learning Company. London: McGraw Hill. Rowley, J. & Gibbs, P. (2008). From learning organization to practically wise organization. The Learning Organization, 15(5), 356 – 372. Senge, P.M. (1990). The Fifth Discipline. London: Random House. Sharifirad, M.S. (2011). The Dimensions of Learning Organization Questionnaire (DLOQ). International Journal of Manpower, 32(5/6), 661 – 676. Watkinm, K. & Marsick, V. (Eds.) (1996). Creating the Learning Organization. Alexandra: ASTD. Wolf, J.A. (2008). Health Care, Heal Thyself! An Exploration of what drives (sustains) High Performance in Organization today. Performance Improvement, 47(5), 38 – 45. Yang, B. (2003). Identifying valid and reliable measures for dimensions of a learning culture. Advances in Developing Human Resources, 5(2), 152-162. Yeo, R.K. (2005). Revisiting the roots of learning organization: a synthesis of the learning organization literature. The Learning Organization, 12(4), 368 – 382. Yin, R.K. (2009). Case Study Research: Design and Methods (4th Ed.). London: Sage.
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Exploratory Study on Learning Organization: A Case Study in Faculty of Economics of a Private University in Jakarta, Indonesia
Nita Handastya, Levi Nilawati, Andy Susilo Lukito Budi Atma Jaya Catholic University of Indonesia - Faculty of Economics Jalan Jenderal Sudirman kav. 51, Jakarta Selatan 12930, DKI Jakarta - Indonesia
Abstract University is a centre of knowledge that produces both ideas and thinkers. However, can such an institution be automatically called learning organization? Learning is, according to Senge (1990), the only means of survival in this changing world,. In a hierarchical organization such as a faculty, many things interfere with the learning process, just as other types of organization. The reason Faculty of Economics was chosen for this study was the fact that it is the oldest and largest faculty in the university it belongs to. This paper attempts to study whether or not the Faculty of Economics is a learning organization based on Senge’s five disciplines. This paper used both qualitative and quantitative approaches to explain the learning organization in the context of educational institution. The method of data collection was through surveys and in-depth interviews. The questionnaire was based on Neefe’s (2001) and the interview was based on Senge’s (1990). The respondents were both academic and administrative employees of the faculty, to provide a broader view. According to the quantitative approach, most respondents agreed that the faculty of Economics is a learning organization. However, the qualitative approach resulted in a fairly different conclusion. While the first approach shows the concept of learning organization, the latter shows that things are not as they seem since there are forces that drive the system in an invisible way. Indeed, both approaches complement one another, providing a wholesome image of the faculty. This research was started with the quantitative approach, and then complemented by the qualitative approach. The findings also show that a system thinking is the most fundamental discipline but it is still greatly affected by the mental models of the faculty members.
© 2014 Nita Handastya, Levi Nilawati, Andy Susilo Lukito Budi. Published by Telkom Pub.Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia. Keywords: Learning Organization; Learning in University; Organizational Culture.
1. Introduction In the 21st century, every aspect of humanity has been developing rapidly, leading to many changes in various aspects. This fact affects every organization and individual in the process of the change itself. Change is something that can contribute toward progress, but it is also a threat that may lead one to failure. Universities as a form of organization are not immune to this fact. A number of universities in Indonesia alone have been declared bankrupt due to their inability to sustain themselves. Many factors affecting these, among others, are: their inability to meet the standards imposed by the government, inability to compete in a highly competitive higher education industry, and failure to attract new students as a source of funding. As an independent organization that has to generate profit to survive, a university, especially that of private owned, has to discover its own competitive advantage and amplify it in order to survive and stay in the competition. Atma Jaya Catholic University of Indonesia (THE UNIVERSITY) is one of the major private universities in Jakarta, Indonesia. It is shown by its achievement in the past and how the survey shows public trust toward the institution. At its maturity age, THE UNIVERSITY as one of the major universities in Indonesia has been through many obstacles and stays competitive. Yet, surviving today does not mean surviving tomorrow. THE UNIVERSITY still faces threats imposed by changes. In THE UNIVERSITY, the Faculty of Economics is the oldest and largest faculty, which reflects the university in term of age and size. As said by Marquardt (2002), old and big organizations tend to be like dinosaurs: slow and rigid, fragile toward changes. According to Senge (1990), learning is the only means of survival in the changing world, while de Geus (1988) stated
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that the ability to learn faster than your competitors might be the only sustainable competitive advantage. According to Kapp (1999), a learning organization is a group of people who have woven a continuous, enhanced capacity to learn in the corporate culture, an organization in which learning processes are analyzed, monitored, developed, and aligned with competitive goals. A learning organization generates knowledge and learning faster than competitors do and turns that learning into a strategic advantage to outmarket, outmanage, and outsell competition. This is why it is very important for an organization to be learning, especially an organization that was intended to generate ideas and innovation. In this way, this study attempts to explore learning in one of the major universities in Indonesia. 2. Theoretical Background Learning is very important in university. This process also includes the process of finding mistakes and a chance of recovering and reformation (Argyris and Schon, 1996). Neefe in her 2001 study compared six literatures and found a common theme among the six literatures (Senge, ASTD; Bennet&O’brien; Gephart&Marsick; Goh, Kaplan & Norton; and Gavin) to describe learning organization in university. She found that from fifteen characteristics proposed by the six literatures (Personal Mastery, Mental Models/Culture/Climate, Shared Vision/Mission, Team Learning, Training, System Thinking, Leadership, Management/Executive Practices, Communication Systems, Information, Knowledge, Structure, Change Facilitation, Work Processes, Rewards & Recognition, and also Performance Management), there are six elements that emerge consistently in most of the literatures, which are: Leadership, Shared Mission/Vision, Teamwork and Team Learning, Organizational Culture, System thinking, and Employee Skills & Capabilities. While Neefe compared 6 literatures to find this theme, she also included Senge’s five disciplines in her source. The researcher found that Neefe and Senge share a unique perspective. While Senge spoke of organization of any type in general, Neefe focused the topic only on the universities. Inspecting Senge’s five disciplines, Senge used a different term for each discipline, namely: Personal Mastery (Employee Skills and Capabilities), Team Learning (Team work and learning), Mental Models (Organizational Culture), while the Shared Vision and System Thinking are still the same. One element that is missing in Senge and found in Neefe is Leadership. Neefe’s research shows that in an educational institution such as university, leadership deserves to be independent, while Senge’s five disciplines show that leadership has to be embedded onto each discipline. There were many literatures written on the theme of measuring Learning Organization application. Sari (2012) conducted a research on Learning Organization Application in PT XL AXIATA, using qualitative methods. There are others as well that were conducted on the education industry using quantitative approach such as Navehebrahim & Badakhshan (2013) and Veisi (2010). Quantitative measurement tools for learning in higher education institutions, however, are lacking. As seen in the said literatures, most researchers utilized widely used questionnaire constructed for organizations in general, and then modified the questionnaire to fit their need.
3. Methods and findings This research was conducted on two different approaches in order that it will provide a broader view of learning organization in the Faculty of Economics by complementing each other. Quantitative approach was conducted first, providing a descriptive study of learning at the surface level of the faculty. The qualitative approach was conducted to provide many explanations about what emerged on the surface and how it came to emerge. Then, both approaches were combined, providing a whole image of the faculty as a learning organization.
3.1. Faculty of Economics as a Learning Organization (Quantitative) The descriptive study of Faculty of Economics as a learning organization was conducted by collecting questionnaires. The questionnaire used in this approach was based on Neefe’s Organizational Learning Questionnaire (2001). She based her questionnaire on Learning Organization Survey developed by Goh and Richards and modified the said questionnaire for university use. The population for this study was academic and administrative staffs of Faculty of Economics (N=103). From the population, a sample size was taken based on Harry King’s nomogram (n=34). The sampling method was the stratified random sampling. The strata consist of academic staffs and administrative staffs. The questionnaire for this study consisted of 31 items that were divided into 6 sub-systems of learning organization, which are Leadership, System Thinking, Mission/Vision Statement, Employee Skills and Capabilities, Team Work and Team Learning, and Organizational Culture. A five-point, Likert-type Scale (1-5) was used to indicate the degree of agreement toward the statements. To describe the findings, Overall Mean Score (OMS) was used. Cronbach Alpha of the questionnaire scored 0.926, which was greater than 0.70; thus, it can be said reliable. For the OMS itself, class intervals will be used to explain
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the degree of agreement of the respondents toward the statements. The class intervals are as such: 1.00-1.80 (Highly Disagree), 1.81-2.60 (Disagree), 2.61-3.40 (Neutral), 3.41-4.20 (Agree), and 4.21-5.00 (Highly Agree). According to the demographic data, the majority of the respondents are between 36-40 years old with a total of 8 persons (23.5%). In term of the sex of the respondents, we can see that the majority are males with a total of 20 persons (58.8%). Most of the staff have worked for the University for 21-25 years (10 persons that occupy 58.8% of total) and the same goes for the duration of work in the Faculty of Economies (10 persons that occupy 29.4% of the total). Respondents were divided into 2 categories based on the work types, which are; administrative and academic staff. The respondents consisted mostly of academic staff, totaling 26 persons (23.5%). Lastly, the respondents are mostly studying at the graduate degree program (20 persons that occupy 58.8% of the total), as stated by the state that in order for one to be permitted to teach, one has to possess a graduate level education. The result of the descriptive study itself can be observed as follows:
Fig. 1. Overall Mean Score
From the figure, we can compare the data measurement with the class interval. Thus, the data shows that in all of the six sub-systems, the respondents agree that the faculty of economics is a learning organization, based on Neefe’s 6 subsystems. Here are figures of each subsystem:
Fig. 2. Shared Vision/Mission
According to the overall mean score for the sub-system of shared vision/mission (3.77), it can be argued that the respondents agree that Shared Vision exists, promoting learning to exist in the Faculty of Economics. This finding reflects that perception of the respondents toward shared vision and its ability to promote learning is positive.
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Fig. 3. Organizational Culture
According to the overall mean score of the subsystem of organizational culture (3.605), it can be argued that the respondents agree that the organizational culture that promotes learning exists in the Faculty of Economics. This finding reflects that the perception of the respondents toward organizational culture and its ability to promote learning is positive.
Fig. 4. Team Work and Team Learning
According to the overall mean score of the subsystem of team work and team learning (3.49), it can be argued that the respondents agree that team work & team learning that promote learning exists in Faculty of Economics. This finding reflects that the perception of the respondents toward team work & team learning and their ability to promote learning is positive.
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Fig. 5.System Thinking
According to the overall mean score of the subsystem of system thinking (3.425), it can be argued that the system thinking exists in the Faculty of Economics and it promotes learning. This finding reflects that the perception of the respondents toward the system thinking and its ability to promote learning is positive.
Fig. 6.Leadership
According to the overall mean score of the subsystem of leadership (3.47), it can be argued that the respondents agree that leadership that promotes learning exists in the Faculty of Economics. This finding reflects that the perception of the respondents toward leadership and its ability to promote learning is positive.
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Fig. 7.Employee’s Skills & Competencies
According to the overall mean score of the subsystem of employee’s skills and competencies (3.475), it can be argued that the respondents agree that employee’s skills & capabilities that support learning exist in the Faculty of Economics. This finding reflects that the perception of the respondents toward employee’s skills & capabilities and their ability to promote learning is positive. Hence from the quantitative findings described above, it may be concluded that faculty of economics is a learning organization based on perception of the faculty members. The findings shows perception on the surface level and thus need to be complemented with deeper understanding
3.2. Faculty of Economics as a Learning Organization (Qualitative) The qualitative study of Faculty of Economics as a learning organization was conducted by initially performing semistructured interviews. The interviews were guided by an interview guideline which the researcher constructed based on Senge’s five disciplines (1990), namely: System Thinking, Mental Models, Shared Vision, Personal Mastery, and Team Learning. The sampling method used is judgmental sampling method, based on the researcher’s judgment. The sample consisted of six academic staffs of the faculty. All of the respondents have been in the university, specifically in the Faculty of Economics for at least 8 years. Two were females and four of them were males. Two of the six served the faculty in structural positions. The analysis was based on Miles and Huberman’s three current flows of activity in the data analysis (1994). The researcher interpreted the activity and constructed three analysis steps, started with t0 table which contains a summary of the respondents’ responses toward each question. Then, t1 table was constructed, containing generalization of the response of each question. The last one was t2 table which contained generalization of themes and responses, resulting in general theme for each discipline. The result is then displayed as follows:
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Exploratory Study on Learning Organization: A Case Study in Faculty of Economics of a Private University in Jakarta, Indonesia
Fig. 8. Learning Organization Characteristics in the Faculty of Economics
After the figure was created, we can observe that in a qualitative approach, there are findings in the deeper level of perception. Interviews enabled the respondents to freely explain their perspective, providing richer information. From the figure, we can see that of the entire general theme in each discipline, not all of them actually supports learning. Each theme provides positive or negative magnitude toward learning. The explanations for findings are as follows:
3.2.1
Shared Vision
The finding shows that there is a gap between organizational vs. personal visions in the Faculty. In the Faculty of Economics, from what were found in the semi structured interviews, it seems that almost all of the respondents had no idea about the vision and mission of both the university and the faculty. In term of the university’s vision, it might be acceptable since the academic staff usually work under the faculty and do not have much interaction with the university, except for those who are holding certain positions. The faculty’s vision and mission are derived from those of the university’s, and in the Faculty the vision and mission are translated into a set of goals. The academic staff know about the goals, but they do not know about the vision. The researcher tried to ask the respondents, and almost all of them said that they did not memorize it and tried to explain what kind of direction they have according to their interpretation. Instead of mentioning any value of the vision and mission, most of them mentioned the goals and university’s principle which were set around two years ago. The researcher assumes that this phenomenon happens because the vision and mission statements are considered far away in the future and are unrelated with the daily operation. The reason why most respondents recognize the principle might be that the principle is new and was created during their employment, socialized to every staff, and easy to remember.
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This discipline displays negative magnitude toward learning because learning is enforced by the shared vision only if the organization members adopt the organization’s vision.
3.2.2
Mental Models
The findings show that senior faculty members have a stronger influence on new recruits, compared to those of organization’s value and norms. Not only that, the interview also reveals that people tend to be pragmatic and stay in a safety zone. But lately, people realize the need to change their behavior and mental models. The interview also shows that new ideas are welcomed, but the drive to share is low among the faculty members. Mental models in the Faculty of Economics are not only individual ways of thinking as a part of the organization, but instead it is a culture that is accepted by the majority of the faculty members and rapidly absorbed by new recruits. This might be caused by the facts that people mingle with each other in high intensity so that they may influence one another, while the Faculty didn’t reinforce its value and norm as effectively. This also may be the reason why most of the faculty members are pragmatic and tend to stay in the safety zone. From the interviews, the researcher found that people in the Faculty of Economics had certain sets of expectations. But during their employment, they went through a change of heart because of certain obstacles. These obstacles might take many forms, and not everyone went through this phase, but only people who did change their whole perspective. One of the faculty members witnessed her family falling apart and the children going astray during her work as an academic adviser, leading her to rethink of her priority. While the other had an idealism to help Catholic institution to develop, the organization failed to aid this, leading to disappointment. During the last few years, many of the academic staffs built network outside the university and/or came back from their study abroad, bringing new ideas and slowly starting to change the way of thinking in the faculty. These people are small in numbers, but because they consistently encourage the new way of thinking, it has started to affect other faculty members who were pragmatic. The last indicator of this study revealed in the interview was ideas. The researcher found that ideas were encouraged, but most of the faculty members kept the idea to themselves. Exposing ideas to the leaders will lead to brainstorm and need assessments on whether the idea can or need to be realized or not. If the idea is accepted, the person who contributes the idea will usually be the one who will be assigned to realize the idea. Several people see this positively since they can actualize themselves and contribute to the faculty. Others, on the contrary, view this as an increase of work for them, with already unbalanced workload, which is unwanted. This is one of the reasons why people keep the idea to themselves.
3.2.3
Personal Mastery
The findings show that work distribution is uneven, not only between the tasks components, but also between peers. This is triggered by the fact that academic staffs have to fulfill the main responsibilities imposed by the government, the Tridharma (lecturing, researching, and community service), while the faculty demands the academic staffs to also work on supporting tasks. Lecturing is especially high in term of work load because of the high ratio between lecturers available and the students. Other time-occupying tasks are the supporting tasks. Different from lecturing, a supporting task in the Faculty is a bit unique since people who fail to fulfill the faculty’s expectation on their supporting tasks will be taken out of the pool, thus limiting the talent choice for the supporting tasks. This creates dilemmas among the leaders because this has led to heavy workload on the supporting tasks among certain people but not among the others. This is bad since people who fail will have the disadvantage of having a smaller chance to join any working groups. Supporting tasks are considered time consuming because they have little points compared to those of Tridharma in term of academic staff‘s evaluation. Research and community service, on the other hand, are relative to the person. In addition, people realize the needs to learn as something essential for them. The reason for the eagerness to learn, however, can be divided into two. The first reason why faculty members think that learning is important is that they perceive learning beneficial for them. For the academic staff, a higher degree means an access to a higher academic career level. It also helps them in their tasks. Meanwhile, for the administrative staffs, higher education means a higher chance to improve their living since people with an academic degree have better pay than those who are high school graduates. Training is seen as an aid to their daily tasks. The second reason for the faculty to perceive learning as crucial is that it is administrative in nature. To reach a good accreditation, a faculty has to have a certain number of publications, a certain number of Doctors, et cetera. The faculty believes that a higher degree for the academic staff is equivalent to a high rate of research, even though the relationship is yet to be proved. Although the eagerness to learn is high, chances provided by the faculty to learn is open to everyone, but it is unequal. The leaders expressed that even though anyone can propose to be funded during their study, there are determinant factors that are known only to the decision makers, and unopened to public (faculty members in general). According to one of the leaders, the factors are, among others, but not limited to: commitments shown toward the organization, motivation to study,
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behavior in the Faculty, historical record, strategic planning (on what discipline needed by the faculty), and quota (budget constraint and including a number of academic staff currently studying). From what the respondent comprehend, the task itself serves as a great determining factor. People with a high rate of success in their tasks and outstanding performances will be favored due to their historical records. For the administrative staffs, chances are open as well, even though the majority of the administrative staffs are not eager to be funded due to the contract that will be put legal binding on them upon completion of study. For training and courses there is no problem since there is budget to accommodate them and they do not need too much time. Lastly, reward is available to encourage learning, through tasks, but punishment is absent.
3.2.4
Team Learning
The findings show that the formal dialogue platform in the faculty is obsolete compared to the informal one. In a learning organization, dialogue has to be encouraged by the organization. A way to encourage the said discussion is to provide a medium or platform for every faculty member to mingle and create a learning atmosphere where people are comfortable to speak out their thoughts. In the Faculty of Economics, only the academic staffs are given such a platform formally, depending on the task. For the academic staffs, however, a platform is provided. Though along its journey the platform serves many functions from a scientific to socialized meeting, the platform was meant for knowledge sharing. Even though it has resulted in several proposals and grants, the real dialogue that sparks an idea takes place in informal small groups between academic staffs and those with the same interests or aspirations. It is limited, for sure, since not every group has the same view on the urgency of learning. But it is a sign of self-initiated learning among the faculty members, which is good. Also, there is no platform for inter-faculty research. Inter-faculty research takes place based on the personal relation between individuals. The leaders consider such a platform unnecessary since research is based heavily on personal preferences. Besides research, another task that involves people from the possible different units (limited to units because each faculty has its own authority) usually only involves a certain group of people. Membership of this group was not expressed by any of the respondents, and thus the criteria are unknown. But according to one respondent, the leaders handpick people who will be in the team, but the considerations remain unopened. Some of the respondents expressed that failure in previous group membership will lead to a smaller chance of being picked for the next working team. Since the working group usually involves a certain group of people, usually the group is always same. In the work process they work on, the formal documentation exists but it cannot be referred to next time the same process/problem occurs. This is due to knowledge relating to the process that belongs solely to the group member in the form of tacit knowledge and it is not documented properly. People who are new to the group or newly in charge have to ask the people joining earlier if such a process/problem ever occurs again. It is unclear how the faculty will respond if one day the key person is no longer in the university and the process/problem occurs. It is against learning organization principle where information should be able to be accessed by all faculty members whenever they need it (Marquardt, 2002). The information can be shared with other faculty members, but there is a tendency of other faculty members who do not ask for information necessary for their current work. The researcher thinks that it might be another norm that is widely accepted in the university that people who have no business does not need to know. Whether they will need to know in the future is another story.
3.2.5
System Thinking
The findings show that learning is considered crucial and needful by the faculty members and the leaders. People inside the faculty know their role in the faculty. The leaders have a different approach but, generally, the course stays the same. We can see that the respondents agree that learning is important because not only does it affect themselves, but also the students, their future research and community service, and the faculty, both administratively and academically. Most respondents can see how they play an important role in the organization. This precious perspective cannot be forced by the organization, but it has to be discovered. The academic staffs discover this mostly by themselves or by their senior’s guidance. There is no mentoring department for the academic staff, one to another. But solidarity as an academic staff drives the senior to guide the junior, or at least as observed by the researcher. This knowledge of a role one possesses in the organization is indeed valuable, but it is useless without proper leadership. From what the researcher observed, the overall direction of the faculty during the change of dean is relatively the same, but only a different approach or method. It is acceptable since a leadership style differs one to another person. The dean has to provide direction and clear guidance on what the faculty tries to achieve. Even though as explained in the shared vision section most of the respondents have no idea about the vision, at least they still stick to the principle and goals set by the faculty. The dean as the leader of the faculty has to make sure that principles and goals that the faculty members hold on to will be utilized to move the faculty to the direction intended. To conclude, a system thinking shows acceptable magnitude that affects learning of the Faculty of Economics.
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3.3. Outcome Space The findings in quantitative and qualitative approaches show similar but different impacts toward learning in the organization. The magnitude of each discipline/sub-system is then assigned and displayed to provide a broader view based on the relationship. Quantitative Qualitative Subsystem Shared Vision
Magnitude +++
Magnitude -
Culture
++
-
+++
+
++
+
+
+
Employee’s Skills and Capabitilies Team Work & Learning System Thinking Leadership
Discipline Shared Vision Mental Models Personal Mastery Team Learning System Thinking
++ Fig. 9. Quantitative vs. Qualitative (OutcomeSpace)
Magnitude is shown as positive (+) or negative (-). For the quantitative, the magnitudes are amplified to highlight disparity in scores between the sub-systems as shown in Figure 1. According to the class intervals, all of the sub-systems in the quantitative method would be grouped in the same class as “AGREE”. But staying faithful to the class interval will lead to failure in capturing the phenomenon. The more the (+) signs, the more positive the sub-system support toward learning. Assigning the magnitude was based on the researcher’s subjectivity to picture various degrees of support toward learning by each discipline/sub-system. There was almost no previous research featuring such an outcome in the topic of Learning Organization, and even if one exists, it is in very few in number. The researcher based the model of qualitative on Sari’s (2012) that used a qualitative approach. However, as seen in Sari (2012), the researcher merely attempted to prove whether the organization was a learning organization or not. But in this study, the researcher found that describing how the sub-systems being perceived as a research object is very important. Sari’s research was normative, and thus the researcher attempts to map each subsystem’s position in the negative and positive area to serve as a starting point for future studies to identify factors that burden the learning implementation in the organization. The positive (+) and negative (-) assignments in the outcome space indicate whether the sub-systems are still in an early stage or implemented stage. As we can see in Figure 9, or Employee’s Skill & Competencies, Team Work & Learning, and System Thinking, the differences are not very significant since all of them display positive influences toward learning. Shared vision and Culture show very different results in the comparison, whereas the quantitative method shows a highly positive result; meanwhile, the qualitative method shows relatively negative results. From the 6 sub-systems used in the quantitative approach, we have to note that some of the sub-systems are ignited by the organization, while the others are ignited by the individuals. While the sub-system of Shared Vision, Culture, and Leadership are arguably ignited by the organization or leadership, the Subsystems of Employee’s Skill & Competencies, Team Work & Learning, and System Thinking are generally ignited by the individuals, with the aid of leadership. The extreme differences in our case, however, take place in those three sub-systems. Even though the Leadership sub-system has no direct equivalent, it is embedded in every discipline in the qualitative approach. Since it shows relatively different results, the researcher concludes that leadership has to be investigated as well. Shared Vision shows different magnitude in both approaches. While the quantitative approach shows that it scores highly positive, the qualitative approach says otherwise. We can see from the question items of this sub-system that it indeed attempted to explain that vision defines values, shows what the work should achieve, and whether or not the vision is supported. However, it should be noted that the questionnaire lacks one very important question. It didn’t show how deep the staff’s knowledge of vision and whether the respondents adopt it as a personal vision or not. The vision might be translated into a set of target (achievements) and values (norms), but being translated does not mean all of faculty members truly understand. The researcher suspects that the main problem here is communication. The faculty members feel no urgency to learn about the direction, and moreover to adopt it. The vision statement remains as some set of words that can
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be shown to an assessor when there is any assessment for administrative purpose. It is as if the vision is only important for people with positions, while the staffs do not need the direction. Next is the organizational culture sub-system. Analysing the questionnaire items again, we could find that the questionnaire tried to investigate rewards and punishment, how faculty reacted to new idea proposed by staffs, and encouragement toward being critical. When given the questionnaire, the respondents could answer quickly, but there are certain aspects on the statement that the questionnaire failed to explain. Rewards and punishment could be explained, although it was not as deep as the interview. New ideas are described as welcomed, but their execution depend on the leaders and the leaders tend to assign the execution of new ideas to the person who proposed the idea. With such tendency, people who have an idea will tend to keep the idea to themselves, since workload is already high and contributing an idea brings more trouble. Other than that, the questionnaire fails to explain how people tend to think in the organization. It is not because the questionnaire is obsolete, but because a way of thinking is not something to be asked with five levels of answer. By conducting interviews, the researcher has succeeded in generalizing people’s way of thinking inside the facility. The pragmatic and simple way of thinking, as well as risk avoiding behaviour is becoming a culture. It is not a culture intended by the organization. Ideally, the organization creates the culture, based on values and norms. But in the Faculty of Economics, culture and values created by the organization are not strong enough that the widely accepted culture and value are the ones created by the faculty members’ disappointment or changes in the way of thinking during their employment. However, it has changed lately. It can be seen from how the respondents remember the university‘s principle which explains virtues in the university and how the pragmatic way of thinking is shifting into changes in oriented views. The interview scored negative because at the moment the interviews being conducted, that was the condition. Even though a change is expected in the near future, it will move slowly inside the faculty. As a shift of mind is occurring between the young people, people who network outside the university, and leaders that realize the need for changes, there are also people who are not ready to change. The speed of a fleet is the speed of the slowest ship, and so it happens in an organization as well. Employee’s Skills & Competencies score higher in the quantitative method; maybe because the questionnaire didn’t explain that even though the chance to self enhance is open to everyone, it is not equal. There are factors that determine whether or not an employee will be able to be funded. One of them is historical track. While the leaders make the final decision, it is the staffs that determine whether they are qualified or not. The staff’s lack of commitment, lack of enthusiasm, and several failures in the past will put such a candidate on the last option. Unfair, most of people would think. But funding on a study is a big stake an organization has to decide. The decision makers are rational to put certain consideration, as long as it is objective. Most items in the questionnaire only indicate the existence of such practice, while deeper, we can find that there are other conditions that follow the practical execution. In addition, each person perceives the statement item differently. For one respondent, his/her work is considered to fully utilize his/her skills and capacity, while for another, it is not. The next sub-system in question is team work & learning. The quantitative approach scores slightly higher than those of the quantitative. The most important trait in this sub-system is sharing. Knowledge sharing is the heart of team work & learning, and thus dialogue is important. From the questionnaire, we can see that people think they can share knowledge, successful practices, and basically any useful information. In the interview process, we can see that such a platform is provided. A media for brainstorming. Not limited to a proposal discussion, knowledge sharing, or even just talks and interactions with each other. But again, from the interview we can see that the media didn’t work quite as expected. The platform is provided, schedule cleared, place provided in the faculty, but one more crucial factor does not fulfil the expectation, which is, the human beings. Either the academic staff is too scared to make criticism, has no interest in such dialogues, thinks that it is time wasting, and too different discipline backgrounds, or else. The interview provides a small number of details in this matter. The researcher believes that everyone in the organization, especially the academic staff, has a different perception of what a scholar should be, on their work, on their daily work, on their mind. The discussion happens, still, but not in the formal platform provided. Instead, it takes place in small informal groups. The other important thing pointed by the questionnaire is how closely every group member can work. In the researcher’s opinion, this might score high because there are not many problems in the team work. This might be due to the membership of the group. As explained before, in the Faculty of Economics, everyone is given tasks, whether individual or group tasks. Success in these tasks will earn trust from leaders, thus granting the possibility of future membership in the working group. This is not necessarily positive or negative, because it depends on the perspective of the person. For one person, membership in a group is a benefit because they enjoy more work, while for another person, it is undesirable because it occupies the time they can use to conduct a research or write a book instead. The interview also discovered certain tacit knowledge that belongs to some groups of people that is not shared with public unless it is necessary. This put people with tacit knowledge on certain positions, while people without such knowledge will have less chances and have to rely on people with tacit knowledge since the organization’s documentation is not helpful. Another form of team working takes form in inter-faculty research. The questionnaire didn’t explain that either. But from the interview we can see that it happens, but in a very limited rate
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since inter-faculty research is limited to the personal relationship among the researchers, since the platform for such function does not exist. Next is the system thinking. In this sub-system, learning at the level of organization is explained. This sub-system scores quite high on the quantitative approach. It is relatively the same as those in the quantitative approach so the researcher concludes that there is not much to explain since both methods agree that the system learning in the faculty supports the learning positively but not with very high rate. The last one is Leadership, which affects all disciplines according to Senge. In this part, leadership has no counterpart in the qualitative approach since Senge thinks that leadership has to be embedded into 5 disciplines explained previously, while Neefe thinks that in the educational institution such as University/College, it deserves a place of its own. Leadership in the Faculty of Economies itself is divided into many levels. University level leadership plays a big role since every policy in a faculty is derived from the university’s policy. In the faculty, faculty level leadership has a big scope since it houses three departments. Leadership at this level is generally considered stable. But on the department level, it is a different story since several years later, a change of leader takes place quite often. The type of leader will affect every other subsystem/discipline. There are leaders who are future oriented, but there are leaders who are operational oriented. The researcher fails to dig deeper into this topic. But the researcher notices that the failure of several sub-systems and disciplines has to be attributed to this sub-system. Leadership has to provide mental models for every faculty member to follow. Thus, leader’s failure to be a role model will result in loss of learning, as explained in the previous section. Leaders also determine whether faculty members will adopt the organization’s vision or not. The researcher concludes that even though an individual in the organization is a big determinant factor for learning to take place, leadership is another big determining factor that might be able to influence the faculty members’ tendency to learn.
4. Conclusion and Suggestions Taking a conclusion of the analysis between two approaches, the researcher founds that Senge (1990) provides a philosophical guidance for an organization to be a learning organization, regardless of the industry. But Educational institution is a very unique organization that tends to be traditional; thus, the researcher agrees with Neefe’s leadership subsystem because in an organization with a strong hierarchical order, leadership is a determinant factor that will affect the other disciplines/subsystems. Following close observations, there are two triggers that determine the magnitude of each sub-system toward learning in the Faculty. Those triggers are the individuals and the leadership. It is true that learning starts in the smallest component of an organization, which is individual learning (Marquardt, 2002). But while some of the subsystems are ignited by the individuals, such as personal mastery, all of the sub-system is not fully ignited by only one party. Instead, it is ignited by both parties, but to a certain degree. Thus, some sub-system individuals dominate, while another sub-system leadership dominates. However, an individual is also influenced by the leadership as well. In the analysis, the researcher sees that leadership is a crucial factor that fails to perform perfectly, due to many factors. This is unfortunate since leadership can bring this organization to thrive even further if used properly. It is expected that this research serves as a reflection for the leaders and future leaders of the Faculty of Economics of how the staffs perceive the organization, leadership, themselves, and the students as an environment. In a faculty such as the Faculty of Economics, a decision making process is not a process undertaken by merely a leader. Because of the collegial leadership, decision making process is not to be done quickly. It is because of the organizational structure that involves many people in the decision making positions, and thus every decision made has to be considered as a part of long term process which has to be assured of its sustainability. They have to also make sure that the decision will be carried on by their successor. This is why a leader in the Faculty of Economics has to take many accounts into consideration in the decision making, without taking too much time that will delay any process. Learning from both approaches, the researcher concludes that the Faculty of Economics is a learning organization, but only in the early stage. Even though not every sub-system shows a positive magnitude toward the statement, the researcher sees, in accordance with the quantitative approach, that learning takes place. Even if now it is not strong yet, the researcher believes that in the near future, learning will be more general in the Faculty of Economics. The differences and similarities of both approaches show that things are not as visible on the surface. Things are not as they seem due to the complexity of the organization where many factors play important roles. During the interviews, the researcher found that many respondents went through an obstacle or several of them, causing changes of view of their employment. These obstacles are not the full responsibility of the organization; sometimes such obstacles are out of control of both parties. But future research may be conducted to find what obstacles play the big part in changing the respondent’s way of thinking, since it can explain further how the obstacles take effect before and after they
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take existence. However, the fact that the university in this case study is a university draws a clear line that differentiates this research from Sari‘s (2012). Also, the fact that the university is located in Indonesia and a Catholic University also plays a role that makes this research different from Veisi (2010) and Naverbrahim& Badakhshan (2013) who conducted studies in a university in Iran. Thus, this study is not to generalize universities of faculties of economics in Indonesia, nor Jakarta. Limitations of this study also play an important role in this research. For future research, this research can also be improved by conducting such research in different faculties of the university, or even conducting a massive scale research on the whole university, both the faculties and the bureaus/centres/institute/units. The sampling method might be changed into Slovin’s formula (in Sekaran, 2003) or any other methods that draw over 50% of the population, to capture more comprehensive and deeper phenomena regarding a Learning Organization. If any future researcher wishes to improve this research, the sampling size is one thing to be improved since the sample size in this study is considered too small. This research can serve as a foundation if any other researchers wish to construct a questionnaire to measure the learning organization in Indonesian Universities, since the modified questionnaire used in this research didn’t capture the whole image of the Indonesian higher education institutions. A construct of future questionnaire should be made differently for private universities and state universities. The size of a university also plays an important role in determining variables the measurement tools tries to capture. Note that in Indonesia, higher education institutions are not only universities but there are also academy, institute, polytechnic, et cetera. All of these have to be taken into account in constructing new measurement tools in the future to ensure reliability and validity. This research has thus reached a conclusion, that the Faculty of Economics is a learning organization, but with a note that many things still have to be improved if the Faculty of Economics wishes to stay competitive in a changing world as today. The complexity of the practices, norms, and values inside the organization are what make the Faculty of Economics stand out from other similar institutions. The said complexity can serve as a cornerstone for improvement, but it can also act as an obstacle, depending on the leadership.
References [1] Kapp, KM. (1999). Transforming Your Manufacturing Organization Into a Learning Organization. September 11, 2013. http://www.businesstrainingexperts.com/white_papers/training_return_on_investment_roi/Learning%20Improves%20Manf%20Productivity%2017%2 5.pdf [2] Argyris, C. and Schön, D. (1996). Organizational learning II: Theory, method and practice, Reading, Mass: Addison Wesley. [3] Senge, PM. (1990). The Fifth Discipline: The Art and Practice of the Learning Organization. New York: Doubleday/Currency. [4] Marquardt, MJ. (2002). Building the Learning Organization: Mastering the Five Elements for Corporate Learning. Palo Alto: Davies-Black Press [5] De Geus, AP. (1988). 'Planning as Learning.' Harvard Business Review. Harvard Business Review. Harvard Business School. Web. [6] Neefe, DO. (2001). Comparing levels of organizational learning maturity of colleges and university participating in traditional and non-traditional, University of Wisconsin – Stout Menomonie, WI. 54-75. [7] Navehebrahim, A., and Badakhshan, A. (2013). 'An Evaluation of The University as a Learning Organization.' Australian Journal of Basic and Applied Sciences 7 (7) 148-54. [8] Sari, FP.. (2012). Penerapan Learning Organization Di PT XL AXIATA TBK. Thesis. Universitas Indonesia, 2012. Depok: Universitas Indonesia. [9] Sekaran, Uma. (2003). 'Research Method for Business: A Skill Building Approach.' 4thed. New York: John Wiley & Sons. [10] Veisi, Hadi. (2010). 'Organizational Learning in the Higher Education Institutions (A Case Study of Agricultural and Natural Recourses Campus of University of Tehran).' International Online Journal of Educational Sciences 2.1 : 23-36 [11] Miles, MB., and Huberman, AM. (1994). Qualitative Data Analysis: An Expanded Sourcebook. Thousand Oaks: Sage Publications.
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Improving Informal Communication to Enhance the Mutual Trust Qualitative study in School of Communication - Private University Dini Salmiyah Fithrah Ali*, Asaas Putra Faculty of Communication and Business, Communication Science– Telkom University, Jl. Telekomunikasi, Terusan Buah Batu, Bandung 40257, West Java, Indonesia
Abstract
This study describes the informal communications network in School of Communication - Private University. The purpose of this study is to draw informal communications among the members. The method for data collection used questionnaires and observation method of collecting participants, while the secondary data were obtained from documents provided by the private university. The type of research was descriptive qualitative using in depth interview and observations. Based on the results of the study, it has been revealed that informal communication flowing through the set of informal structures that sustain organizations and less formal relationship in a job environment can enhance trust among the organizations member. © 2014 Dini Salmiyah Fithrah Ali, Asaas Putra. Published by Telkom Pub. Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia. Keywords: enhance, mutual trust, communication, informal, organizations
1. Introduction The development of information technology is fast changing the way of communication in a workplace. Indeed, it creates opportunities for a variety of corporates that extensively use information technology, one of which is Private University. These opportunities must be balanced with the corporate condition that has high competitiveness, especially in terms of human resources or employees, because human resources have a vital role in corporate activities. Daniel Dăneci [1] has stated that people are interrelated and that individual performance affects and is affected by other performances. The role of the internal corporate communication becomes an important factor to determine the company's efforts to gain success. Therefore, it’s required a system, or corporate communication network that helps the employee to achieve that goal. Pace and Faules [2] said that the decisions taken by member organizations will work effectively. Therefore it is essential to be honest to the organization, to form the spirit within the Organization, to perform the duties creatively and to offer innovative ideas for the improvement the organizations influenced by communications. The importance of communicating the things remain associated with progress, so the work between Division/Department and other departments are needed to create synergies, reduce the misunderstanding that can trigger conflict in work, and strengthen mutual trust between management and employees. The interesting part for the case studies is to examine the organizational communication as communication flow takes place in line with the internal changes in the organizational structure of the company itself. Communication is a sequence of small communication networks, somewhat
*
Corresponding author. Tel.: +62-22 7503055; fax: +62 227505522
E-mail address: [email protected].id
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overlapping and interconnecting to form networks. Informal communication often contributes to the effectiveness of an organization in reaching its goal. Both formal and informal communications are related to each other, so the members of the organization can process information, and both types of channel are interchangeable. For example, each channel type, can take turn informal channels of communication are not over filled by formal channels. Communication media that are used today in order to facilitate internal communication in School of Communication are as follows:  Whatsapp, the cross platform messaging applications using smartphone media messages, are used to inform the non-formal or formal messages.  Board Announcements/Magazine Wall, is used to inform, policy dissemination such as teaching schedule.  Mailing Group is used to inform the wedding invitation, policy dissemination. Basically, the official communication medium in Communication Science Program is public announcement board and mailing group list media sharing. It means that in School of Communication and Business, the members of the mailing list are not only the lecturers of Communication. Meanwhile, Users of Group discussion via Whatsapp is the object of the research in order to examine the function of the author's internal communication, both formal and informal. The application is more flexible as compared with others. The user of the media can directly communicate and even exchange multimedia files. Information is two-way and connects a person with even a few other people simultaneously (group). This media users are arguably semi-formal, because it can also be used to discuss organizational issues, job, the personal affairs and even rumors. Communications networks are relatively less structured than formal. Network communications that occur just show the behaviour of everyday communication of individuals within an organization. Communication networks change over time, and therefore its existence cannot be predicted as well as formal structure. The organizational structure is a simple diagram of the ideal communications relationships within an organization. What actually happens is sometimes different, as it is shown by the research organization. Analysis of communication networks is one of the best ways to find out the presence and origin of the difference in organizations. According to his book, Rogers and Rogers [3], it is said that there are three different concepts as follows: 1. Total System Network (Network System Total) includes all communications among individuals in a system, such as an organization. This network can consist of thousands of people and it is also a great organization. 2. Clique is defined as the network subsystem elements with other elements that interact relatively more often than other member of a communication system. Most major of component a clique of a communication network within an organization. 3. Personal Network (private networks) - defined individuals related and currents associated with certain pattern communication in individuals. To identify 'key actors' and a homogeneous group, Cross et al. suggested to study the five organization networks (including the three previous studies proposed by Krackhardt and Hanson, [4]:Communication network, Information
network, Know network, Problem solving network, Access network. Network of accessibility to knowledge within the organization. These informal network can be divided into: non-working domain and working domain. This paper presents
informal communications among School of Communication members in a Private University. It draws a small communications network using Whatsapp; the cross platform messaging applications using smartphone media messages in small-medium organizations is reported in this paper. This paper presents four factors to be identified in this qualitative research method: Factors of relations role (role relationships), Factors of direction of message flow (direction of message flow), Factors of circuit current message (the serial nature of the message flow), Factors of the content of the message (the content of the message). 2.
Method To examine how to improve organizational performances through a formal and informal communication in the Communication Studies Program at a Private University, researchers used qualitative research method, whereas the process of observation and accurate data collecting were based on the data field featuring an interview with a guest speaker. According to Jumroni and Suhaemi [5], the qualitative research is conducted in a reasonable situation (natural setting). Moreover, collected data are generally qualitative. The reason why qualitative research method was used was to investigate how cross-platform technology such as “whatsapp” can improve organizational performance through a formal and informal communication for lecturers in the Communication Science Study, Faculty of Business Communications Private Telecommunications. The writer uses descriptive qualitative method because it discusses the informal interpersonal relationships in organizations that expose individuals to increase communication model performance. Qualitative research is holistic or an overall symptom. It is not a variable or set of research based on other researches. Therefore, qualitative research is not only based on a variable set of research studies, but also the overall social situation under studies that covers the aspects of the place, actors and activity interacting synergistically. Qualitative research has the objective to interpret social phenomena. Qualitative researchers can use semiotics, narrative, content, discourse, archival, phonemic analysis, and even descriptive
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statistics. This study used a qualitative descriptive approach. Because the problems brought on by researchers is still tentative, the theory used in the preparation of the qualitative research proposal is still tentative, and will be developed after researchers enter the field or social context. Related to the theory, the quantitative research is to test the hypothesis or theory, whereas qualitative research is finding a theory, or in this case to find a way of analyzing the Informal Communication in the Organizations- the Private University Qualitative researchers should be 'perspective emic' meaning that the researchers obtained the data in a way that is not 'as where it should be'; it was not based on what was considered by researchers, but it was based on the implementation, experiences, felling, and thought by participants or data source. By using qualitative method, researchers could figure out the opinion of the faculty member as the members of Whatsapp about the existing reality, trust in organizations of improving organizations performance. This research led to the use of IT applications cross platform using smart phones to inform media messages and to use formal messaging. According to De Vito [6] in his book “communication between Humans” it is explained that the organization is sending and receiving various messages in the organization in a formal or informal group organization. Organization Communication can be formal, whereas the communication approved by the Organization itself is oriented to on the organization. The contents of the ways work within organizations, productivity and variety of work to be done in organizations: memos, policy statement, press conference and official letters. Meanwhile an informal communication is communication that is socially approved. The Orientation is not in the Organization itself, but rather on its members individually. In its daily routine, communication is established between employees. It shows dynamics in performing job functions, positions and authority existing in the organization of work place and it gives impact to the lack of coordination between divisions/departments because the information is not given to the right or to the authorities party to follow up the problems, so that handling problems is often stunted and leads to complaints from clients and thus decreases the risk of image or, worse, criminal charges. Goldhaber [7] described there are factors that influence the nature and scope of the Network: relationship role, message flow direction, serial nature flow and content in an organization. The discourse above has interesting thoughts about the need for the study of formal and informal communication patterns in a medium-size organization that has a wide range of variable levels of employee education, age, ethnicity, culture, old work, and so on. Goldhaber said that the scope of the communication network organization is influenced by several factors, such as: relationship role factor (role relationships), 2-way message flow factor (direction of message flow), circuit current message (the serial nature of the message flow) factors, and the content of the message factor (the content of the message) Starting with relationships role factors, Goldhaber said that the role of individual is a factor in the organization in accordance with the position or duty. In order to implement formal tasks, the information or message is submitted in formal messages and uses a communication network as a formal means of communication. All types of communications and exchanges of related messages in the field of duty are a formal communication channelled through formal networks. Furthermore Goldhaber also said that if there are at least three or more individuals, interactions occur continuously between them, and then a group (group) will form. Hargie et al. [8] also said that during the interactions colleagues often discover similar reviews on their attitudes, opinions, and values and consequently they will become acquainted and mates to one another resulting in friendships. This means organizations can appear in variety of types of groups within its own network. This main factor becomes the foundation of the theory used in this journal. Through a chart/organizational structure, we can learn the operational system and also act as a suggestion to lead these patterns to the directions instructed by formal communication channels. Evertt & Rekha [3] declared that we can predict the nature of the communication by knowing the formal chart. Thus, this organizational structure not only expresses the expected patterns of formal communications, but also the informal patterns of communications. Formal structure contains the patterns of formal relationships and tasks, job description, formal rules, operational policies, procedures, compensation and rewards, etc. In other words, the organizational structure contains the aspect of the patterns of behavior in organizations that is relatively predictable. Besides that, there are also informal structures. Guffy et al. [9] stated that informal communication is based on a social relationship among people so that we could not separate the formation of informal structures because when the employees get less information from the formal structure, the informal structure can complete the shortcomings of formal structure Gray & Laidlaw [10]. Formal communication and informal communication channel within an organization sometimes, complementary and interchangeable. Hanson Krackhardt [4] stated that the performances of organizations are determined by the informal structure called real central nervous system, which drives the collective process, the actions, and the relationships inside the business unit. But sometimes overlapping occurs between the formal organizational structure and informal communication patterns Allen & Cohen [11]. Often, there are incongruity between formal behaviour and formal structures and the informal structures. In this study there are several reasons because of this discrepancy: (1) the structure organizations that frequently change (2). There is a shadow of organization structure (task force) beside the official structure (3) climate companies are looking for a family to make the employees tend to get information from fellow employees. This is the fundamental of this research. Generally, informal structure triggers the development of gossip. Gossip is an unconfirmed message that is sent along personal channel. Gossip as rumours are communicated without assurance standards based on facts/evidence-channel and
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do not follow the official channels, therefore rumours are spread very quickly. Gossip is almost entirely verbal, and the fact that gossip is not literally written can skip the formal channels. A study stated that employees that relies on the grapevine employees when they feel threatened, insecure, are under stress, when there is a pending change, and when employees feel that communication from management is limited. 3.
Result and Discussion
3.1. Result Communication Studies Program Faculty of Communication and Business Private University has a structural organization that is led by the Chairman of the Program and assisted by staff and educating staff. Educating Staff are the workers who are directly involved in educating students, in this case called the Lecturer. Lecturer, the personnel are divided into four categories; 1. Extraordinary Lecturer or abbreviated LB, is a lecturer who is only present at the time of teaching, and paid based on the hours of teaching/semester credit system (SKS). They do not have other obligations, such as research, they don’t have Lecturer National Identification Number. 2. Part Time Lecturer, is a lecturer who has taught also in addition to the obligation to be present at a certain time, being thesis advisor to students 3. Full Time Lecturer is a lecturer who has an obligation to come every day, do counselling to students, academic meetings, may hold structural positions, and obligations, have registered NIDN on behalf of the institution. 4. Fulltime Employees and Prospective Employees, is a lecturer who has the same obligations to remain full-time in faculty, with more rights than others, such as health, and other scholarships. This study focuses on the informal communication through the media group “whatsapp” that increase mutual trust in the organization. In this study researchers use 6 informants which is three of them are the members of Group Discussion and 3 others are not the members of the Group Discussion via media whatsapp. All of informants use a smart phone to access “whatsapp” account. All of informant Group Discussion retrace whatsapp more than 3 groups, with a wide range of topics and group themes. Based on interviews with respondents, there are some facts that have many issues in discussion are not valid. Some information that is disseminated through the group sometimes contain invalid information disseminated through the mailing list or the board. Some issues had low of validity, for example the case of the health facility. Discussions that occurred in the group mentioned that Private Foundation has no longer cooperated with the previous hospital or clinic. The different issue revolved through mailing list. The issue was ignored by the spread of information through e-mail and mailing list and included the attachment of the HRD. On the other side, Group Discussion could increase organizations performance in sharing information at critical moments. Most of the informants said the information on SYSTEM INFORMATION EDUCATION MANAGEMENT assist for update system. Issue appeared when the lecturers were faced with the new education management information system (SYSTEM INFORMATION EDUCATION MANAGEMENT) applied to the Private University in the absence of socialization. The socialization of system designed was not good in internal organizations. The information is not conveyed properly, socialization of SISFO (IT Department) were spread through the official channels (mailing list of employee-information systems, dashboards) was not accepted clearly. The cause for socialization system using the mailing list and the dashboard was not familiar in the lecturer’s sight. For this critical situation, the lecturers turned a Group Discussion as informal channel that was very helpful and could support the activity of the lecturers. Sharing the information, the use of education management information system tools, processes and management courses guardianship can be solved due to the Group Discussion sharing. In addition, not all lecturers with permanent status have the application installed on their smart phone can become a member of the whatsapp group members. Several new lecturers reference (group discussion members) may not be directly approved by the members of the group. The membership is approved by one of the informants. The process to become a member of group discussions is defined by closeness among the member itself. Even though, there were a few times informant out of the group members was invited to join, although in the end came out as well. As an unwritten rule, members of Group Discussion are lecturers at the department of Communication Studies, although he/she is no longer active in the Communication Studies. In fact, the rules to be a member of this group are not clear. it contrasts to mailing list lecturer, which is managed directly by the Faculty of Communication and Business. If its compare to mailing list which is managed by the Faculty of Communication and Business, this group has informal organization hierarchy. The level of trust and respect to individuals are based solely on age, position ever lived, seniority (without limitation), and personal credibility. Hereby the process apply to join with group 1. Based on the invitation of the admin group 2. Based on the reference from other members who have joined 3. Based on the request directly to the admin group
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Fig. 1 Flow Diagram membership procedure
Regarding the level of comfort for a member on this group, four informants stated they are feel comfortable being the member of this group. The comfort level is characterized by a feeling of being part of this group. He/she hasreceived the response from the other members during the discussion. One informant stated that the signal whether a person is accepted within a group is by acceptance and getting the response for any information displayed. Forth of six informants claimed to just become 'silent reader', which means that readers decide not to comment anything. They regard Group Discussion as a source of information and only participate when they name was mentioned directly during discussion. Despite all of media claim the group Discussion is informal information, the typical member of a silent reader stated that the group remains limited by constraints that cannot be explained. The main reason to be a 'silent reader' is they want to maintain a personal relations and do not want to be involved much in terms of-things out side of the work. Motive to become a member of the group is essentially all informants agreed just to get the latest information related to the job. All informants agreed that, the group provide much benefit in enhancing mutual trust among members, because the process of direct personal relationships based on trust, closeness and long process. All informants argue that the group is basically helpful in improving organizational performance without using formal conversations, but with the approach of daily-casual conversations. All informants also agreed that it would be better if the group discussion is splited into two, based on the theme of the discussion, which is a formal and an informal discussion. Concerns arise in the middle of the formal discussions, all of a sudden the other members responded with a joke. Communication via text, without involving intonation, facial expressions can sometimes be a mistake response.
3.2. Discussion Gossip as rumours that communicated without assurance standards on facts/evidence turned out to be true, it happened to Group Discussion. Model of discussion about the health facilities provided by the company showed the validity level of Group Discussion is low. Definition Group discussion as a forum for informal communication becomes valid. Even though the communication process occurs in group discussion without any assurance standards and on the evidence or low level of validity, it can help to improve organizational performance. It implies in the case of application for the System Information Education Management. When an official communication infrastructure called System Information Education Management, does not provide clear information Group discussion apparently used by management in the communication Studies courses disseminate information, the validity of information is counted by the credibility of the informant. Group Discussion also met the scope of the factors communications network as it is said by Goldhaber [5] 1. Relations role factors (role relationships), the motive group members trust the validity of an issue. A case in SYSTEM INFORMATION EDUCATION MANAGEMENT implementation is an example of how the group members trust the information submitted by members of the group who has credibility in the member perspectives. 2. Direction of message flow factors (direction of message flow), which is two-way make-to-date information is always flowing and update. 3. Circuit current message factors (the serial nature of the message flow) that connect (another discussion) so that the
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level of information that can be refuted instantly doubtful validity. The content of the message factors (the content of the message), which relates to the job and everything related to group members make daily life is always a concern group members. This relationship is recognized through informal communication networks that have links with high employee morale, ethos, and unity among workers. Therefore, the informal communication network of the informants were asked to think about when he was involved in the communication structures such as chat, spontaneous unplanned meetings, interpersonal relationships, and any other things. Informal communication payloads have little concept of how to do the task compared with information about the people, the attitude of relationships, interactions, prediction, values and norms. Rate information received by each informant is in high level, but not too wide in complexity. This is because each informant almost any time communicates informally to its colleagues, but the topic of conversation is just stuff about the daily activities. 4.
Fig. 2 Sociogram Communication Model for Group Whatsapp
5.
Conclusion
Based on the exposure that has been described in the research and discussion, it can be concluded that ‘whatsapp’ group created a sub-groups based on proximity, seniority and sub-departments or commonly called the click. In progress, trust is not entirely the objective in ‘whatsapp’ group as the primary group. However, this ‘whatsapp’ group, recognized as an informal media successfully strengthen interpersonal relationships among members. Informal conversation to discuss topics such as family circumstances, places of recreation, humour besides discussing the job environment, is the example of how interpersonal relationships become closer. Whatsapp as an application has its own advantages and proven successful data transmission to speed up the process of delivering information compared to other media. The process of someone to become a group member is based on the proximity of a person Group Discussion and reference of the previous group members. Lecturers do not automatically become a member of this group as a faculty group mailing list do. The main factor to be the member is trust that based on emotional closeness between members of the admin group as reason to refuse or accept a person to be a member of a group that is managed by the admin itself. Group Discussion proves useful in cementing relationships and organizational performance in information sharing in the job environment. The process of interpersonal communication occurs in any communication involving group members; by the time, itbrings closeness relationship among the members in job environment.
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References [1]
Dăneci-Pătrău, D, Formal Communication in Organisation, Economics, Management, and Financial Markets, Volume 6(1), 2011, Addleton Academic Publishers, New-York, ISSN 1842-3191, pp 487-497. [2] Pace, R. W., Faules D, F.,1994, Organizational Communication, Third Edition, New Jersey: Prentice Hall, 1994, p.78. [3] Rogers, E, M and Rogers, R, A., 1976, Communication in Organization, New York: The Free Press, p. 230. [4] Krackhardt, D. and Hanson, J.R. 1993, Informal Networks: The Company Behind The Chart, Harvard Business Review, Vol. 71 No. 4, pp. 104-11. [5] Jumroni and Suhaimi, 2006, Metode- Metode Penelitian Kualitatif (Qualitative Research Methods), Jakarta, UIN Press , p. 25. [6] DeVito, J,A., 2009, The Interpersonal Communication Book, USA; Pearson Education Inc, p 19. [7] Goldhaber, G, M., 1986, Organizational Communication, Fourth Edition, Lowa:Wm. C. Brown Publisher, p. 149. [8] Hargie, O., Dickson, D., & Nelson, S., 2003, Working Together in a Divided Society, a study of inter group communication in the Northern Ireland workplace. Journal of Business and Technical Communication, 17(3), pp. 285-318. [9] Guffy, M. E., Rhoddes, K., & Rogin, P., 2005, Business Communication. Toronto: South- Western, pp.17. [10] Gray, J & Laidlaw., H., Part-time Employment and Communication Satisfaction in an Australian Retail Organisation, Employee Relations, Vol. 24 No. 2, 2002, # MCB UP Limited, 0142-5455 DOI10.1108/01425450210420929 pp. 211-228. [11] Allen, T. J., & Cohen, S. 1969, Information Flows in R&D labs. Administrative Science Quarterly, 14, p. 12-19.
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Influence of Internal Market Orientation on Employee Job Satisfaction in Private Sector Organization Syahputra1,2, Irfan Prarendra1, Aditya Wardhana1, Candra Wijayangka1 1
Business Administration Program, Telkom University, Bandung, Indonesia 2 PhD candidates, Universiti Utara Malaysia
Abstract One of the issues in internal marketing in the companies is treating employees as a middle man of customers inside the firm. This study investigates potential enablers of successful internal market orientation in the industry that can increase employee job satisfaction. The main objective of this research is to examine the influence of internal market orientation on employee job satisfaction. In order to measure that, three dimensions of internal market orientation namely internal marketing research, internal communication, and internal response are used. While, the two dimensions that measure employee job satisfaction are intrinsic satisfaction and extrinsic satisfaction. Data were gathered through questionnaire survey of staff at a private sector industry. Regression analysis examines the influence of internal market orientation on employee job satisfaction. The result indicates that internal market orientation positively influences job satisfaction. This limitation includes the sample, which is only in one private company due to time and monetary limitation. This result may not apply in other organizations because there is different management system, policies, and culture within the companies. The result from this research will assist companies to improve their competitiveness in marketing and human resources.
© 2014 Syahputra, Irfan Prarendra, Aditya Wardhana, Candra Wijayangka. Published by Telkom Pub. Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia. Keywords: internal market orientation, job satisfaction, private sector industry, employee, competitiveness
Introduction Internal Marketing, according to the conventional view, focuses on external customers, rather than paying attention to the organization’s employees as “internal” customers. However, internal marketing is a competitive asset in developing sustainable advantage in the marketplace through a “marketing-like approach directed at motivating employees for implementing and integrating organizational strategies towards customer orientation” (Ahmed and Rafiq, 2002). Internal marketing is more important than the traditional external marketing. It happens because employees are also consumers, where the organization has to take care of its employees and build organization value for every member to follow (Kotler, 2004). In addition, Greene, Walls and Scbrest (1994) suggest that internal marketing orientation is the key to excellent service and success of external marketing. In other words, internal marketing is a process that operates among various departments within the given firm, also between the staff and management. Therefore, there is a strong need for marketers to motivate and influence workers to change the internal process as expected according to an effective external market orientation. This combines all the activities of the company to convince employees to respond to the market, which includes the capability of adapting quickly the changes within the external market. However, Atousa (2007) asserts that the fundamental tool for achieving employee satisfaction is the treatment of employees as customers. The concept of internal marketing has evolved from the original conceptualization of employee motivation or happiness by treating employees as customers and profession as products for improving service
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quality (Sasser and Arbeit, 1976; Berry, 1981) to customer orientation or market orientation and the use of marketing approach and marketing-like tools internally to motivate employees (Grönroos, 1990). In other words, organization should respect their employees and treat them as internal customers. Hence, in order to attract, motivate, and maintain employees, the organization should meet their requirements and delight them as customers in order to build up employee loyalty. In order to achieve organizational goals, the employees will be searching for improvement and motivational methods such as motivation system, training, and job design to increase the organizational and individual performance (Chi,Yeh and Chiou, 2008). In short, the creation of a market-oriented culture results in internal customer satisfaction and improved service quality, which leads to customer satisfaction and success in the external market. A number of firms has regularly recognized and utilized the internal marketing program. One potential reason for this has been the growing interest in internal marketing as a prerequisite for successful external marketing. In addition, several authors (Gummesson, 1987; Berry and Parasuraman, 1991; Lings 2004) state that implementing internal marketing campaigns will result in an increase of service quality. The recognition of employees’ key role in service marketing has given a rise the internal marketing program that is strongly oriented to employee development (Tansuhaj, Wong and McCullough. 1988; Grönroos, 1995). It seems to be a very practical approach in industries because the customer-employee interaction determines a significant part of the market offering. Others argue that the quality of service and efficiency of the service distribution as well as the effectiveness of the communication effort would depend more directly on the actions of the employees of the company. Intensive and high quality communications should be treated as a competitive advantage in order to inform employees to be always in time about the current nature of the external environment changes. This is a general internal marketing activity that requires companies to focus on customers and adopt market orientation. The end strong communication pushes staff to identify the need to change and when it is required, also makes staff feel comfortable about adopting quickly. Based on the fact above, the main purpose of this research is to examine the influence of internal market orientation on job satisfaction, at least in the company where this research conducted. The research seeks to answer the following questions. • Is there any relationship between internal market orientations with job satisfaction? • Are there simultaneous significant influences between the internal market orientations on job satisfaction?
Literature review Internal marketing is a philosophy of valuing and treating employees as an intermediate set of customers inside the firm and enhancing the value provided to employees with the aim of encouraging them to perform the organization’s marketing objectives and thus strengthen the competitive position of the firm in the external market (Sasser and Arbeit, 1976, Berry and Parasuraman, 1991; Greene et al., 1994; Ahmed and Rafiq, 2003). Meanwhile, According to Berry and Parasuraman (1991), internal marketing is the process of handling staff as internal customers and projects as internal products that satisfy the needs and desires of the customers and adhere to the company’s goals. Jaworski and Kohli, 1993 also support that Internal Marketing is the process of promoting the company and its products to the employees. As mentioned previously, internal marketing orientation crosses the functional boundaries of marketing and human resource management. The function of management is to influence employees’ behaviors in the ways that will positively affect customer’s perceptions of the levels of service they receive (Hartline and Ferrell, 1996). Therefore, managerial activities can be explained as the equivalent of an external market orientation of the firm. It means that a strategic overview of cultural change helps the given organization’s marketing orientation as well. Internal marketing orientation supports organizations to build effective and efficient relationships with its employees, based on a dedication to provide higher value for employees (i.e. the internal market) by understanding and meeting their expressed and latent needs in as much in the same way as the commitment required to produce value for the company’s customers (Gounaris, 2006).
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
Internal Market Research
Internal marketing uses a marketing perspective for managing an organization's human resource (George and Gronroos, 1991). It is based on the philosophy of viewing organizations’ jobs as internal products and employees as internal customers of these (Sasser and Arbeit 1976). This allows organizations to manage the employee and employer exchange by modifying the existing marketing tools and techniques to the internal environment of the firm (Greene et al. 1994). This has led to operations of internal marketing that directly reflect those of the external marketing. For example, Piercy and Morgan (1990) develop an internal marketing mix which directly parallels to the external marketing mix. In processing internal marketing this way, Piercy and Morgan suggest that jobs or projects constitute internal products. In the end, it is what the employee has to give up to complete the job, promotions are represented by internal communications and distribution by meetings in which the ideas are presented to the employees. 
Internal Communication
Communication is the means by which organizations transfer information from one entity to another i.e. disseminating information (Johlke et al. 2000). Therefore, it impacts the performance of front line staff. Information dissemination is an important requirement to align employees’ attitudes and behaviors with the organization’s goals (Boswell and Boudreau 2001; Guest and Conway 2002). Internal communications are the key in this process (Grönroos 1990), the close physical proximity between managers and employees increases opportunities for such communication, providing the chance to collect information about the wants and needs of the employees, as described above, and also to disseminate the information. The process of communication is also important in fostering organizational identification (Smidts, Pruyn and van Riel 2001), and subordinate job outcomes (Keller 1994). In particular, bi-directional informal communications between managers and staff have positive outcomes for front-line staff (Johlke and Duhan 2001). In the context of internal marketing orientation, this is particularly important as the close proximity of staff and their managers means that bi-directional communications constitute an important part of workplace behavior. 
Internal Response
The internal response dimension comprising the actions has taken in response to the needs of the employees and consists of designing jobs to meet the needs of the employees. The needs may comprise the followings: adjustment on the compensation schemes accordingly, building the management more considerate with regard to the employees’ needs, and offering them the necessary training in order to develop the skill and capabilities that their job description requires (Gounaris, 2008). 
Job Satisfaction
Job satisfaction is an essential objective of internal marketing programs and, thus, a key performance indicator regarding the company’s performance in the internal market. Consequently, in much the same manner, that the company’s degree of market orientation directly influences its performance in the (external) market (Narver and Slater, 1990; Kohli and Jaworski, 1990; Slater and Narver, 2000). The results of many studies show that employees need clear directions regarding their work environment, in another word, the task and job design should be given a higher priority among employees. Job design can be conceived as being similar to an aspect of the job which facilitates the development of structural, social, and financial bonds. According to Herzberg (1966) the leading dissatisfactions are company policy, supervision, relationship with line manager or owner, work conditions, salary, and relationship with peers. The leading satisfactions of a job are achievable, recognition, the work itself, responsibility, advancement, growth and so on.
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Dissatisfaction     
Company policy Relation with Manager/Owner Work conditions Salary Relationships
Satisfaction
Job Satisfaction
     
Achievement Recognition The Work it self Responsibility Advancement Growth
Figure 1: Factors affecting Job Satisfaction (Herzberg, 1966)
Research Methodology 
Population and Samples
The population of this research is employees of Palm Oil Company in South Jakarta, Indonesia. This sample is used due to time and monetary limitation. According to company employees’ database in 2013 there are 450 employees. Quota sampling will be used in this study. This is to ensure that certain groups are adequately represented in the study through assignment of a quota (Sekaran and Bougie, 2013). Generally, the quota fixed for each subgroup is based on the total numbers of each group in the population and convenience sampling method is used. The 50 employees from the populations (see Table 1) are the samples for this study. Furthermore, Roscoe (1975) as cited in Sekaran and Bougie (2013), uses the rules of thumb for determining sample size. One of the rules of sample sizes which is larger than 30 and which is less than 500 are appropriate for most research.
Department Employees Operation 112 (24.89%) Human Resources and General Affairs 53 (11.78%) Sales and Marketing 119 (26.45%) Finance and Accounting 42 (9.33%) Others 124 (27.55%) Total 450 (100%) Table 1: Data of Employees

Samples 12 6 13 5 14 50
Design
In order to achieve the purpose of this research the regression analysis is used to discover the influence of internal market orientation on employee job satisfaction. According to Sekaran and Bougie (2013), regression analysis can suggest that there is influence of independent variable on dependent variables. The independent part is what the experimenter changes or enacts in order to do the experiments. It is well-known that the quantitative method is the research technique that is used to gather quantitative data or information dealing with numbers and anything that is measurable. The research framework of this study is developed based on the view presented in the literature suggesting that it significantly gives influences between the internal market orientations on the employee job satisfaction.
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
Instrument
Measurement of variables is an integral part of the research and is an important design. The total of 65 items are constructed consisting of 43 items that represent the independent variables and 22 items that represent the dependent variables. Internal market orientation items are adapted from Gounaris (2008). The job satisfaction items are adapted from Weiss et al. (1967). 
Reliability and Validity
Data collection is performed through questionnaire method applied to employees with face to face interviews. Before the survey, pilot study is conducted to realize the validity and reliability of the study. The questionnaire form consists of 65 questions. The test was conducted to test the validity of each item in the statement for measuring its variables. The validity testing in this research was conducted by correlating the scores of each statement presented to respondents with the total score for all items. Correlation techniques are used to test validity of the statements in this study and Pearson product moment correlation is also used. The questionnaire statements in this research are valid. Confidence analysis is implemented and confidence coefficients are calculated to achieve consistency of questions each other and homology in the measurement. The reliability of the questionnaire was tested by Cronbach’s Alpha or called Alpha Coefficient to show internal consistency of the questionnaire. According to Sekaran and Bougie (2013), the closes the reliability coefficient of 1.00 the better it is. In general, reliabilities which are less than 0.60 are considered poor; those in the range of over 0.80 are considered good and acceptable.
Variables and Dimensions Independent Variables 1. Internal Market Research
Numbers of Item
Cronbach Alpha
17
0.77
2.
Internal Communication
10
0.65
3.
Internal Response
16
0.73
Dependent Variables 1.

Job Satisfaction
22 Table 2: The Results of Reliability Analysis
0.71
Data Analysis
The analysis used in this study is undertaken in two stages. In the first stage, the overall reliability and validity of internal market orientation and job satisfaction are measured. In the second stage, it measures the influence between two variables using the covariance based SPSS. These steps are discussed in the following subsections. Results A total of 50 questionnaires were distributed to staff at private sector industry (a palm oil company) in South Jakarta. The response rate is 100%. The Majority of respondents are male (60%). Their education background is divided into four categories (i.e Diploma, Degree, Master and PhD) and most of the respondents’ education backgrounds are Degree and Diploma with the percentage of 58% and 26% respectively. From the demographic variables, it can be seen that many of the staffs in this company have the length of services between 1 to 5 years (52%). The company staff’s age range is from 26 to 55 years where 48% of them are between the age of 26 to 35 and 18% of them are in the age between 36 to 45 years.
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
Correlations Result
This research uses correlation analysis Pearson product moment correlation analysis to discover the correlation between internal market orientations variables and job satisfaction. The hypothesis formulation is described in the following: H0: There is no significant relationship between internal market orientation and job satisfaction. H1: There is a significant relationship between internal market orientation and job satisfaction. The result is shown in the following table: Table 3: Correlations result between variables 1
2
1. Job Satisfaction 1 2. Internal Market Research 3. Internal Communication 4. Internal Response **. Correlation is significant at the 0.01 level (2-tailed).
.466 1
3 **
4 **
.620** .436** .600** 1
.467 .419** 1
The result indicates that all the three dimensions of internal market orientation are positively correlated with job satisfaction. The three dimensions of internal market orientation are internal market research, internal communication, and internal response, with the coefficient value of 0.466, 0.467 and 0.620 respectively with overall job satisfaction. 
Regression Analysis Result
Regression analysis is used to explore predictive ability of internal market orientation on job satisfaction. The hypothesis formulation is described in the following: H0: There is no significant influence internal market orientation on job satisfaction. H1: There is a significant influence internal market orientation on job satisfaction. The result is shown in the following table: Table 4: Regression of internal market orientation on job satisfaction Model
Unstandardized Coefficients Standardized Coefficients B
(Constant) 1
t
Sig.
Beta
46.852
17.474
2.681 .010
Internal market
.662
.217
.483 3.049 .004
Internal comm
-.125
.311
-.058 -.402 .689
.029
.232
Internal response a.
Std. Error
.018
.123 .903
Dependent Variable: job satisfaction Model 1
R .470
R Square Adjusted R Square Std. Error of the Estimate a
.221
.170
96
3.042
Influence of Internal Market Orientation on Employee Job Satisfaction in Private Sector Organization
Table 4 illustrates the regression results of individual internal market orientation dimensions and job satisfaction. The result reveals that only 22.1% (R Square=0.221) of the variance in job satisfaction that has been significantly explained by the three dimensions of internal market orientation, namely internal market research, internal communication, and internal response. The result also indicates that one dimension of internal market orientation correlates with job satisfaction at p≤0.05. The dimension is internal market research. Internal market research is found in the most important factor in explaining job satisfaction because of its high beta value of 0.483, while internal communication and internal response have beta value of -0.58 and 0.18 respectively. Discussion There is a significant relationship between the overall internal market orientation and the overall employee job satisfaction. The correlation result reveals positive relationship between internal market orientation variables and the overall job satisfaction. This result sets forward that internal market orientation and employee job satisfaction are associated with each other. In other words, the positive correlation between internal market orientation and employees job satisfaction as indicated in this research are in line with what has been discussed by Gounaris (2008). He says that adopting an internal market orientation indicates an integrated kept organization. Therefore, the aim of the internal market orientation is excluded to produce employees’ job satisfaction. Meanwhile, regression analysis indicates that the dimensions of internal market orientation consist of internal market research, internal communication and internal response. It can be seen that only 47% of the variance are explained by the independent variables where only internal market research is significant to the job satisfaction. Lings (2004) discusses that internal market orientation is about identifying and satisfying the wants and needs of employees as a requirement for satisfying the customers. Numerous limitations exist throughout this research. This limitation includes the sample, which is only in one private company due to time and monetary limitation. This result may not apply in other organizations because there is a different management system, policies, and culture within companies.
References Ahmed, P. K., & Rafiq, M.: Internal marketing: Tools & concepts for customer focused management, Oxford, Butterworth-Heinemann, 2002 Atousa, F. (2007). The effect of internal marketing on organizational commitment. Retrieved July, 8, 2014 from http://epubl.luth.se Berry, L.L. (1981). The employee as a customer. Journal of Retail Banking, 3:2, 33-44. Berry, L. L. & A. Parasuraman. (1991), Marketing Services, Competing through quality. New York, The Free Press. Boswell, Wendy R. & John W. Boudreau (2001). How leading companies create, measure & achieve strategic results through line of sight, Management Decision, 39 (10), 851-860. Chi, H. K., Yeh, H. R., & Chiou, C. Y. (2008). The mediating effects of internal marketing on transformational leadership & job performance of insurance salespersons in Taiwan. The Business Review, Cambridge, 11(1), 173-180. George, W. R. & Grönroos, G. (1991). Developing Customer-conscious Employees at Every Level: Internal Marketing, in The AMA Handbook of Marketing for the Service Industries, Carole.A Congram, ed. Chapter 5, AMACOM, American Management Association, New York, NY. Gounaris, S. (2008). The notion of internal market orientation & employee job satisfaction: some preliminary evidence. Journal of Services Marketing, 22:1, 68-90. Gounaris, S. (2006). Internal-market orientation & its measurement. Journal of Business Research, 59:4, pp. 432-48. Greene, W.E., Walls, G.D. & Scbrest, L.J. (1994). Internal marketing: The key to external marketing success. Journal of Services Marketing, 8:4, 5-13. Grönroos, C.(1990). Relationship approach to marketing in service contexts: the marketing & organizational behaviour interface. Journal of Business Research 20:1, pp.3-11 Grönroos, C. (1995). Relationship marketing: the strategy continuum. J Acad Mark Sci. 23(4):252–4. Guest, D. E. & Conway, N. (2002). Communicating the psychological contract: An employer perspective. Human Resource Management Journal, 12 (2), 22-38. Gummesson, E. (1987), Using internal marketing to create a new culture: the case of Ericsson quality. Journal of Business & Industrial Marketing, 2, 2328. Hartline, M & Ferrell, O.C (1996). The management of customer contact service employees: an empirical investigation. J Mark; 60:4 : 52 –70.
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The 2nd International Seminar & Conference on Learning Organization Proceedings Herzberg, F. (1966). Work & the nature of man. Clevel& & New York: The Word Publishing Company. Jaworski, B.J. & Kohli, A.K. (1993). Market orientation: Antecedents & consequences. Journal of Marketing, 57:3, pp. 53-70. Johlke, M.C. & Duhan, D.F. (2000). Testing competing models of sales force communication. The Journal of Personal Selling & Sales Management, 21:4, 265-277. Johlke, M. C. & Duhan, D.F. (2001). Supervisor communication practices & boundary spanner role ambiguity. Journal of Managerial Issues, 13:1, 87-101. Keller, R.T. (1994). Technology-Information Processing Fit & the Performance of R&D Project Groups: A Test of Contingency Theory. Academy of Management Journal, 37:1, 167-179. Kohli, A.K. & Jaworski B.J. (1990). Market orientation: the construct, research propositions & managerial implications. Marketing Science Institute, Report no 90- 113. Cambridge, Massachusetts’ Marketing Science Institute. Kotler, P. & Keller, R.T. (2011). Marketing Management. (14th ed.). Prentice-Hall. Lings, I.N. (2004). Internal market orientation: constructs & consequences. Journal of Business Research, 57: 4, 405-413. Narver, J. & Slater S. (1990). The effect of market orientation on business profitability. J Mark, 50(3):20 –35. Piercy, N.F. & Morgan, N. (1990). Internal marketing: Making marketing happen. Marketing Intelligence & Planning, 8:1, pp. 4-6. Sasser, W.E & Arbeit, S.P. (1976). Selling jobs in the service sector. Business Horizons, 19:3, 61-5. Sekaran, U. & Bougie, R. (2013). Research Method for Business, A Skill Building Approach, 6th edition, Wiley. Slater, S.F. & Narver, J.C. (2000). The positive effect of a market orientation on business profitability: a balanced replication. J Bus Res, 48, 69– 73. Smidts, A., Pruyn, A.T.H. & Van Riel, C.B.M. (2001). The impact of employee communication & perceived external prestige on organizational identification. Academy of Management Journal.
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Maintenance Activity and Spare Part Optimization for the Critical System on Mechanical Plant Using Realiability Centered Maintenance (RCM) at PT Pertamina Geothermal Energy Kamojang Area Asysyifaa Ramadhini, Rd.Rohmat Saedudin, Sutrisno Industrial Engineering Study Program, School of Industrial Engineering, Telkom University, Jl. Telekomunikasi no.1 Terusan Buah Batu Bandung 40257, Indonesia
Abstract Pertamina Geothermal Energy (PGE) is a company of PT Pertamina (Persero), which has been established since 2006 and has already accepted an instruction from the governor to develop 15 Geothermal Companies in Indonesia. The new era of geothermal energy was started by the opening of Geothermal Kamojang field on 29th January 1983. The PLTP Kamojang Unit 4 is one of the plants owned by PGE, which is located in 41 Km southeast of Bandung, in sub-district of Ibun, Bandung district, West Java Province. The PGE PLTP Kamojang Unit 4 has 1 PLTP unit installed by the capacity of 60 MW. PGE KMJ 4 maintenance task is mapped according to the company’s Key Performance Index target. There are several special critical equipment which are classified by PGE KMJ 4 maintenance division. The critical equipment are steam turbine, main condenser, and hot well pump. All of those equipment have a vital role I the production, so the maintenance task is needed by every critical equipment’s parts. The result of the research shows that those 3 equipment are in subsystem level 6 in the equipment hierarchy, it has 3 critical items. The critical components are then processed using Reliability Centered Maintenance and RCM++ software for optimizing effectively and efficiently the maintenance activity in terms of time and cost. The spare parts are divided into repairable and non-repairable categories. The spare parts availability become a supporting role in this maintenance activity, so it can work simultaneously with RCM preventive tasks. According to the result of data processing in 3 critical subsystem components, it produces 47 tasks on condition and 32 failure finding tasks, with the variation of interval. The proposed maintenance cost in 1 year is $17.242. It decreases by 13% from the existing maintenance cost. The non-repairable spare parts availability is 267 and the repairable spare parts availability is 5 in 1 year.
© 2014 Asysyifaa Ramadhini, Rd.Rohmat Saedudin, Sutrisno. Published by Telkom Pub. Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia. Keyword—Geothermal, Reliability Centered Maintenance, Reliasoft, RCM++, Spare Parts, and Asset Management.
I. INTRODUCTION The needs of the fuel energy in this world are increasing every time. According to the projection of International Energy Agency – IEA, until 2030 the demands of fuel energy is increasing by 45%, or the average point is increasing by 1.6% each year. The distribution of using the fuel energy in the world is 500 x 1015 BTU each year. Besides oil, the world energies are distributed among coal, gasoline, and biomass, nuclear, hydro and renewable energy. The role of the renewable energy in electrical industry is increasing. Projected from 2010, the role of the renewable energy in electrical industry is placed in the second position of the coal and hydro. On the other hand, the rise of the fossil fuel use is the trigger for the climate changes. That is why IEA is suggesting to use the clean and efficient energy to suppress the carbon emission.
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The sources of renewable energy are solar energy, wind energy, water pump energy, geothermal energy, and biomass energy. Geothermal energy is an energy that is extracted from the heat that is kept in the earth. It is from the tectonic activities in the earth since the planet was created. The heat is also from the sun heat that is absorbed by the earth surface. Around 10 Giga watt of geothermal electrical plant was placed around the world in 2007, and the distribution was around 0.3% of the total of electrical energy in the world. The geothermal energy is friendly to nature because the geothermal fluid, which is the heat energy changed into electrical energy, and the residue of the fluid will be returned to the reservoir through the injection well. Indonesia has 40% or 27.140 MW geothermal potential in the world. That is why geothermal energy is the best source of energy that needs to be invented in Indonesia. From the total of the potential, only 4.2% has already been used as the electrical energy. The process starts when the steam in the earth running through the pipes in every well, then goes to scrubber to separate the steam with other materials such as other gases or material which is brought along the steam from the earth that can make a corrosive. Besides, the solid and liquid fluid will be injected back to the earth. After that, the steam will flow to the steam turbine to change the heat of the steam into mechanical energy then distributes it to the plant to change it into the electrical energy. The steam pressure that enters the steam turbine is 1.02 Mpa with the temperature of 181°C. Next, the fluid from the steam turbine will go to the condenser to change it from the steam into water. The others except for the water steam will go to the gas removal system to eliminate it. The water from the condenser will be injected into the earth and the others will be pumped using the hot well pump to the cooling tower to cool it down. Then the water will flow back again to the condenser which is used to change the steam from the steam into water. A plant that is used every day must be in a good condition to produce electricity. This thing is based on the Key Priority Index (KPI) from PGE KMJ 4 as the minimum standard of electric production. So, the maintenance division and production division must have a standard operating procedure according to the company’s KPI. One of the maintenance division strategies is classifying the critical equipment so it will get a special treatment. The critical equipment have a big role in the production of power plant, so it will need a special treatment and the right way, so the critical equipment can work properly. The problem is what critical components are in the PGE KMJ 4 critical sub system by using matrix risk and what optimal maintenance policy is in PGE KMJ 4 critical sub system by using Reliable Centered Maintenance (RCM). TABLE I.1 MPI PGE KAMOJANG AREA PLTP UNIT 4 Rank
Equipment
242 243 244 245 247 249
Main Oil Tank LRVP Cooling Tower Hot Well Pump Condenser Steam Turbine
Score MPI 245,2987 265,4376 396,0519 514,0873 665,2175 689,5133
Critical Index 3 2 1
Of all the mean of equipment above, the company has already classified the mean of equipment according to the critical index. The company has the Maintenance Priority Index (MPI), by classifying the critical level into 5 parts: Ring 1, 2, 3, 4, and 5. The Parameters that build the MPI are safety, maintenance cost, environment, the failure effect, ramp rate influence and the recovery time. With these causes, the research will focus on the 3 critical equipment and the supporting equipment. That is why it needs an effective and efficient maintenance activities according to the failure characteristic in every 3 sub system components by using Reliability Centered Maintenance method. To make the managing of the management assets easier is by using the software reliasoft RCM++. In deciding the optimal machine maintenance policy, considering the reliability by using the RCM method is supported by counting the needs of spare parts. Counting the spare parts is to know how many repairable spare parts and non-repairable spare parts to support the maintenance activities. To decide the right needed spare parts is by using Poisson Distribute as the
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Maintenance Activity and Spare Part Optimization for the Critical System on Mechanical Plant Using Realiability Centered Maintenance (RCM) at PT Pertamina Geothermal Energy Kamojang Area
accurate foretelling technique. Poisson distribute is the same as the purpose of the research, which is deciding the total of the needed repairable and non-repairable spare parts. II. RESEARCH METHODOLOGY The conceptual model is a description and explanation in the form of logic method and picture depicting the relationship variables and the method used to ultimately achieve the research objectives. Required data for this research are primary data through direct field observation and secondary data are those which are already available so we can just search and collect them. The data was obtained from the office of PT. Pertamina Geothermal Energy Kamojang Area (PGE KMJ 4) entry operator. The data have been collected and carried to the processing of such data. Conceptual models of this research can be seen in Figure II.1 Preliminary data required is a data overview of plant PGE KMJ 4 creating a new tool to facilitate the observation that the system break down structure of PGE KMJ 4 then narrowed to the critical systems of PGE KMJ 4, the Maintenance Priority Index (MPI). MPI will obtain critical system that will be the focus of research. Furthermore, critical systems will be filtered from any maintainable items really critical using the Risk Matrix.
Figure II.1 Conceptual Model
Obtained critical component is subsequently processed in the two calculations. Qualitative measurement for the processing of RCM, with the order, the manufacture of FMEA, with the output of the proposed task list. Meanwhile, Quantitative measurement will calculate the optimal time interval for each task list RCM proposal processing result. Processed along with maintenance costs as the price of components, cost engineer wages, profit loss, and maintenance costs. Furthermore, the results of RCM, will be input into RCM++ to manage the assets easily in control and in evaluation. The calculation of the optimal number of spare parts obtained from the time interval RCM results, divide into two spare parts: Repairable and Non-Repairable. The overall result of this study is the Task Maintenance and Optimization procurement of spare parts.
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III. ASSET MANAGEMENT
A. Maintenance management Moubray (1991, page 6) defines the maintenance as an activity to make sure that the physical assets will work as the expectation of the user. According to Ebeling (1997, page 3) maintenance is defined as an activity so the sub system or the failure system will be repaired in the mean condition and in the mean period. Maintenance management has purposes to dig, study, identify, measure, analyze, and to repair the functional failure equipment and to decrease the downtime, so it will increase the availability of the operated system. According to Marquez (2007), maintenance activities are classified as shown in the Figure III.1.
Figure III.1 Maintenance Classification (Marquez, 2007)
B. Reliability Reliability is a probability of the components or the system which will inform the needed function in the mean period of time which is used while in operating condition (Ebeling, 1997 Dalan Kurniawan, 2008). The relation between the functional reliability R (T) with the functional intensiveness probability (pdf) can be explained systematically as follows: ………….... (1) The functional reliability for each distribution is: 1. Normal Distribution …………… (2) 2. Exponential Distribution ……………………..….. (3) 3. Weibull Distribution …………………......... (4) The functional of the failure rate is a failure level that happens in the meantime (T). 1. Exponential Distribution …………………………….……… (6) 2. Normal Distribution
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Maintenance Activity and Spare Part Optimization for the Critical System on Mechanical Plant Using Realiability Centered Maintenance (RCM) at PT Pertamina Geothermal Energy Kamojang Area
…………………… (7)
3. Weibull Distribution ………………………….. (8)
C. System Breakdown Structure According to ISO 14224, SBS is a way to classify from item to the general group based on the system where it is done systematically.
Figure III.2 SBS
D. Risk Matrix The risk is defined as the combination of the likelihood of failure and the consequences of the danger (OHSAS 18001:2007). Every business ideally is doing the risk management to anticipate the unwanted dangers or accidents. One of the well-known risk managements is Risk Matrix. Risk Matrix is a matrix that is used through the Risk Assessment to decide some risk levels, from every danger probability category and the effect of the risk. Risk Matrix is a simple mechanism to improve the risk visibility and help taking the management decisions.
E. Reliability Centered Maintenance Reliability Centered Maintenance is one of the tools to make the maintenance according to the characteristic of the equipment or system. Smith defines reliability as probability that the item will do the needed function under the mean time period condition. Moubray defines RCM into 2 ways: 1. RCM is a process that is used to decide the physical assets specification in the operational context. 2. RCM is a process to decide what should to do to make sure that the physical assets are still doing what they want in the operational context.
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The RCM process entails asking seven questions about each of the selected assets, as follows: 1. What are the functions and associated performance standards of the assets in its present operating context? 2. In what ways does it fail to fulfil its functions? 3. What causes each functional failure? 4. What happens when each failure occurs? 5. In what way does each failure matter? 6. What can be done to prevent each failure? 7. What should be done if a suitable preventive task cannot be found? Furthermore, to facilitate answering 7 questions above, tools are created to facilitate the work, i.e. the table Failure Mode Effect Analysis (FMEA) and tables Logic Tree Analysis.
F. Reliasoft (RCM++) This research will be focus on the managerial of RCM output worksheet which is processed in RCM++, it is not yet discovered deeper by using the reliability in every interval and others. Therefore, the obtained output is a managerial for the company so that it can be easier in evaluating every task list from RCM.
G. Spare part management Spare parts or components are one of the parts that build in one combination and have a specific function. Non Repairable Spares are the spare parts that cannot be restored to the normal condition. After the components fail, it must be changed into the new one. Then they must be uninstalled and are replaced with the new spare parts from the store, and throw the failure components.
Figure III.3 the Representation of the Non-Repairable Components In the calculation of the needed components the non-repairable spare parts, the total of the failure is the same as the total of the needed spare parts. The total of needed spare parts is the minimum value from (n) with the calculation as follow (Fukuda, 2008) …… (9) Repairable spare parts are the repairable components. It is when the spare parts fail, the components will be taken away and changed with the same component type. Then the components will enter the repair shop for repairing. After it is finished, it will be stored in the store to be used for the next fail components.
Figure III.14The Repairable Components Representation The total of the fail/needed spare parts and the components (to scrap) according to the repairable item formulation:
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……………………………….. (10) The average total of the fail/needed components (to repair) based on the repairable item formulation. …………. (11)
IV. CASE STUDY The study focuses on 3 critical systems of the data MPI Company, which is Steam Turbine and Lube Oil System, Condenser System, Hotwell Pump System. They were done step by step as a reference. RCM processing is divided into 2 calculation, the measurement of qualitative and quantitative measurements
Qualitative Measurement 1. Making equipment in hierarchy (system breakdown structure) based on ISO 14224 2. Processing the maintainable items on the system breakdown structure with a risk matrix to obtain the components really critical. 3. Making Information Worksheet (Failure Mode Effect Analysis, FMEA) to determine the functional failure modes on a machine or system, so it is known the impact of such a failure. 4. Analyzing the decision tree diagram on the worksheet decision to determine what kind of maintenance activities that match the characteristics of each component
Quantitative Measurement Failure data, unstructured, on the company, were then calculated using secondary data, which is OREDA (Offshore Reliability Data). The Failure Data in OREDA is served in the percentage of all Failure turbine, the total is 2867, 13 × 10-6 hour. Below is an example of the λ calculation from Thrust Bearing component: The Failure Percentage can be seen in OREDA table = 0.22% Total mean failure rate Gas Turbine = 2687, 13 × 10-6 So λ = 0, 22% × 2687, 13 × 10-6 = 5, 9117 × 10-6 After obtaining the value of λ the value of MTTF (Mean Time to Failure) was found by using this formula …………………………. (12) Here is an example of Thrust Bearing MTTF calculation: λ MTTF
= = 169156,481 hour
If it is changed into years, so: The total hour in 1 year = = 8760 hours
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MTTF (year)
= = 19, 31010056 Years
Figure IV.1 Proportion of Purposed Policy Figure IV.2 describes the processing of the RCM. There is a scheduled task on 47.3% and 58.7% condition failure finding task. The next is the calculation of the optimal interval for each task proposal.
Interval of on-Condition The Number of ½ PF interval calculated calculation time checking and is repaired if found it will cause a malfunction. This includes procurement of spare time along with the required lead time and the time of reservation. So, the ½ of the PF interval is the time recovering all the actions that can anticipate the particular malfunction and the optimal interval for each task proposed. PF interval is defined as the interval between the occurrence of failure and potential failure conditions of functional equipment (Moubray, 1991, p 17). PF interval is obtained from direct interviews to the staff of PML in PGE KMJ 4. An example of oil pressure monitoring maintenance interval calculation from MOP bearing component is: = × PF Interval
PF Interval
Maintenance Interval (week) = × 4 = 2 weeks
Interval of Failure Finding Scheduled failure-finding is an activity that is scheduled to check the hidden function regularly to know if there is a failure in the system. It is not a preventive task because it is checking the hidden failure which already happens. But it is concerned as the preventive because it is to prevent the next failure that can happen if the hidden failure is not detected. The formula of the failure finding interval for single protective device is FFI =
………………………..(13)
Here is the example of Failure Finding Interval Calculation from the casing inspection: = 34.457, 8hours = 34.457, 8hours = maintenance cost + loss of revenue = $ 30.000 + $ 42.000 = $ 72.000
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Maintenance Activity and Spare Part Optimization for the Critical System on Mechanical Plant Using Realiability Centered Maintenance (RCM) at PT Pertamina Geothermal Energy Kamojang Area
= $168.000
Failure Finding Interval = = = 31.901,8 hours The total of hour in 1 year = = 8760 hours FFI (years)
= = 3.687 years 3 years 7 months
After all the tasks proposed computed interval, RCM ++ is used to allow companies to control and evaluate the existing task, and to manage asset management. The data required are: 1. Breakdown System Structure 2. FMEA 3. RCM Worksheet 4. Task List RCM Worksheet 5. Optimal maintenance time interval 6. Reliability Policy from every component 7. Reliability from every component 8. Probability of Failure from each component 9. Task duration of each task list 10. Task crew from each task list 11. Cost for each task list 12. Task Consequences (bring the system and item down or no) 13. Target Reliability and Availability 14. Current Reliability and Availability The use of RCM++ software makes an easier way in classifying the task according to the plant condition, whether the plant can be done when the plant is producing or not. The task classification is also based on failure mode, so it makes an easier way in completing the task. Other than that it is also easier for the company to evaluate every task, because it is featured with reliability and availability target in the software. The next is classification based on the plant condition.
Figure IV.2 RCM++ Type Task
Schedule on-Condition Cost Scheduled on-Condition Thermal Imaging:
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Task Duration: Task Duration on-Condition = 15 minute Total Task = Total Task for Thermal Imaging Total Task for 1 Year (1M) = = = 26 task Maintenance cost (per hr) = $6 Cost =
=
= $54 Table VI.1 Maintenance Cost Scheduled On-Condition Task Duration for 1 Year (hour)
Cost per hour
Cost
On Condition 2W
377
$6
$2.262
On Condition 1M
253,2
$6
$1.519
On Condition 2M
46,5
$6
$279
On Condition 3M
73
$6
Maintenance Type
TOTAL
$438 $4.498
Failure Finding Cost Failure Finding Cost 2 Years Total Task Duration = 4 hour Maintenance Cost / hr = $8 Cost = = $32 = Table VI.2 Maintenance Cost Failure Finding MAINTENANCE TYPE
TOTAL TASK DURATION (HOUR)
MAINTENAN CE COST (HR)
COST ($)
4
$12
$48
118
$12
$1.416
20
$12
$240
53
$12
$636
555
$12
$6.660
120
$12
$1.440
192
$12
$2.304
FAILURE FINDING (2Y) FAILURE FINDING (3,7Y) FAILURE FINDING (4,2Y) FAILURE FINDING (4,7Y) FAILURE FINDING (6,8Y) FAILURE FINDING (7,6Y) FAILURE FINDING (56,2Y)
TOTAL
$12.744
Table VI.3 Comparison between OC Cots and FF Cost Existing
$22.332
Proposed
$17.242
Difference
$5.090
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Percentage
13%
The compared task is PdM task and Existing Minor Turn Around task. Even though the cost percentage is reduced to 13%, the existing minor turn around activity can be changed to failure finding task with the academically calculated interval. The existing maintenance activity already fulfills the Key Priority Index (KPI) of company, this is very natural because the plant is still new and the lifetime is still long. So, the fatalistic failure is not yet obvious. But as the time goes by, to achieve the world class power plant planned by PGE KMJ 4, there must be some repair in some aspects. One of the aspects is maintenance aspect, improving the maintenance using the RCM. The result of RCM will be focused on every Failure characteristic and the causes. With this approach, more effective and efficient maintenance policy will be obtained in preventing the failure of critical equipment. One of the ways is reducing the minor turn around activity by scheduled on condition output task list of RCM. So, Turn Around is only held every once in 4 years. It can be avoided that Turn Around is a vital preventive maintenance activity, so it can eliminate the Turn Around activity’s easily. In this research, deciding the maintenance task is done by component step of critical sub system. Deciding the maintenance time interval is based on the failure record in OREDA, the observation’s result and interview with some PGE KMJ4’s maintenance workers. According to the result using RCM, the new maintenance policy consists of 47 Scheduled on Condition Task and 32 Scheduled Failure Finding Task. With the comparison task duration of 41.3% and 58.7%. The Scheduled On-Condition proportion measurement unit is 1 year operation. The unit for Failure Finding is 1 interval of Failure Finding. In the task of processing the results of the RCM proposal, there are two types of tasks that can be applied in PGE KMJ 4. In the task Schedule on Condition and Failure finding, the second task is selected according to the characteristics of the failure and the RCM decision worksheet. There is the task of the Time Based replaced or discarded such as typical failure and weigh the cost side. Running to failure will be more effective and efficient on maintainable components or items that could potentially fail during operation. This results from the costs incurred to replace a component on a regular basis will be larger than letting it failure components and replace them with new ones while experiencing failure. It can be anticipated with the optimal procurement of spare parts. When the mechanical seal on the pump hot well malfunction, it will immediately be replaced by the existing stock of spare parts. It is more efficient than specifically schedule on the optimum time to replace the mechanical seal. Several other components also have an almost similar case, but most of the spare parts on the turbine will be checked regularly and replaced at 4 major annual over hauls so as to not selected task time based on three critical subsystems raised in this research.
Spare part Optimization There are two types of spare parts: Repairable and Non Repairable spare parts. Of 3 critical systems, there are 63 types of non-Repairable parts are classified as consumable parts. Of the 63 types of these, as many as 267 parts procurement needed for safety stock for 1 year, with a 95% confidence level.
Calculation of Gasket 10K-150 MTTF = 39016, 8 A (number of component) = 2 P (Confidence Level) = 95% N (Number of Unit Eq) = 1 T (Initial Period) = 12 M (Utility Op.Machine) = 720 The calculation of λt: =
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Table IV.4 Calculation of Gasket 10K-150 RF GASKET 10K-150
34 K
(λt)k/k!
EXP(-λt)
AL i
Probability
AL
0
0,80136144
1
0,80136144
0,801361438
< 95%
1
0,80136144
0,2214432
0,17745604
0,978817479
< 95%
Based on the above calculation, the number of mesh needed to be able to meet 95% as much as the availability for 1 year is 1. As for the Repairable spare, there are 4 types of parts, and it takes as much as 5 pieces for the procurement of safety stock for 1 year with a confidence level of 95% and scrap at 20%.
Calculation Requirement of Main Stop Valve MTTF = 37590, 3 hour MTTR = 10 hour R (Scrap Rate) = 25% A (number of component) = 1 P (Confidence Level) = 95% N (Number of Machine/Unit) = 1 T (Initial Period) = 12 months M (utility/Op. Machine) = 720 hour/month The calculation of λ1t: λ1t = = 0, 2298 λ1 = R x λ1t = 0, 25 x 0, 2298 = 0, 0574 The calculation of λ2t: λ2t
=
= 0, 0002
Table IV.5 P1 Probability Calculation K
EXP(‐λt)
(λt) /k!
k
AL i
Probability
AL
0
0,9441581
1
0,9441581
0,944158115
95%
Table IV.6 P2 Probability Calculation K
EXP(‐λt)
(λt) /k!
k
AL i
Probability
AL
0
0,999734
1
0,999734
0,999734009
> 95%
1
0,999734
0,000266
0,000266
0,999999965
> 95%
Table IV.7 Probability P1 and P2 Main Stop Valve i
P(i;λ1=0,0459)
P(i;λ1=0,0002)
0
0,944158115
0,999734009
1
0,998410981
0,999999965
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Maintenance Activity and Spare Part Optimization for the Critical System on Mechanical Plant Using Realiability Centered Maintenance (RCM) at PT Pertamina Geothermal Energy Kamojang Area
Table IV.8 Calculation Requirement Main Stop Valve P(n‐1)
AL
Note
P(0)
0,9441581
95%
Based on the needs of Main Stop Valve calculation tables above, so to be able to meet the 95% availability of Main Stop Valve for 1 year, the company must provide 1 piece of spares. Where (n-1) = 0 then the result n = 1 piece component Repairable spare parts are parts that can repair not at the time when it is malfunctioning. Repairable spare parts have to use a different number of each kind. That number is the number or value of scrap rates, the amount of usage figures that are within the tolerance of the components of the company and the ability to continue operating after repairs before being replaced with new parts. The Scrap rate in the study of Repairable spare parts this time is 20%, meaning that parts in question can be reused after 5 times the failure and repair. The smaller the scrap rate, the higher the risk. Because of the smaller numbers mean scrap rates are increasingly being carried out repairs and reuse these parts before completely replaced with new parts. This affects the function of the parts to sustain the function of equipment or a system where the parts are located. As for the spare Repairable and Non Repairable have the same level of Confidence, confidence level is a safe level where the spare would certainly meet the 95% when needed. As warranty of parts procurement. Confidence level values obtained from the policy of the company or expert judgment of the expert staff of the company. The smaller the confidence level the more vulnerable parts needs are not met. Meanwhile, the higher the value, the confidence level will more likely be available in the spare time needed. V. CONCLUSION After building the PGE KMJ 4 Breakdown System Structure, the 3 critical equipment can be obtained. They are steam turbine, main condenser, and Hotwell pump in level 7. The next level describes that in level 8 there are 30 sub equipment. The next level is level 9, in which there are 24 components. Those sub equipment and components will be processed by using the risk matrix in the next process to obtain the critical components. Reliability Centered Maintenance (RCM) is used to decide the right preventive maintenance activity for the critical equipment. According to the result of RCM, there are some new maintenance policy. There are 47 scheduled on condition and 32 failure finding tasks Based on the research, the RCM method can reduce the activity of PGE KMJ 4, by the Schedule On-Condition in a shorter time. In addition, the turnaround minor, which is usually performed 1 or 2 years, the company is also reduced by the activity once Failure Finding by the optimal interval. With cost savings of 13% from the previous treatment. Procurement of spare stock in 1 year proposed to maximize the maintenance activities at PGE KMJ 4. REFERENCES [1] [2]
ABS : American Bureau of Shipping, Guidance Note On Reliability Centered Maintenanace,2004, New York Abul-Haggag, Ossama Y; Barakat, Walied, January 2013, “Application of Fuzzy Logic for Risk Assesment using Risk Marix”. IJETAE, Volume 3.
[3]
Banji Ajadi, Olabiyi; Amos Adekunle, Adegbola; Oladele Peter, Kolawole, September 2012, “Identification od Hazard and Risk Assesment for a 40kVA Diesel Powered Lighting Set”. Greener Journal of Sience Engineering and Technological Research, Volume 2. Barrat, Mel and Schram, Gerrad, 2003. Criticality Analysis in Perspective, Introduction into Criticality Analysis, Criticality Measures, and Application. SKF Reliability Systems @ptitudeXchange. San Diego. Ebeling, E. Charles, 1997. An Introduction Reliability and Maintainability Engineering.Singapore. Fore, S and Msipha, A, 2010, ‘Preventive Maintenance Using Reliability Centered Maintenance (RCM): A Case Study Of Ferrochrome Manufacturing Company ’South African Journal of Industrial Engineering, pp 208-212 Fukuda, J. 2008, Spare Parts Stock Level Calculation, pp 1-8. ISO 14224 : 2004. Petroleum and natural gas industries – Collection and exchange of reliability and maintenance data for equipment. 2nd edition Kallesoe, Carsten Skovmose. 2005. Fault Detection and Isolation in Centrifugal Pumps, pp 65-68 Moubray, John, 1991. Reliability Centered Maintenance II. Industrial press inc. 2ndedition. New York. Musyafa, Ali; Kristianingsih, Luluk, Septermber 2013, “Risk Management and Safety System Assesment from Power Plant Steam Boiler in Power System Unit 5, Paiton-Indonesia”. AENSI Journals. Ozog. 2009. Desining an Effective Risk Matrix. [Online]. Available: http://www.iomosiac.com/docs/whitepapers/risk-ranking.pdf Rajora Rajeev and Dixit Harrsh Kumar, April 2013, “Effect of Lube Oil Temperature on Turbine Shaft Vibration”. Int.J.Mech & Rob.Res.2013. Volume 2.
[4] [5] [6] [7] [8] [9] [10] [11] [12] [13]
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Organizational Change Dynamics: A Learning Organization Process toward World Class Organization (Study at Private University) Dyah Puspo Mukti, Nidya Dudija School of Economic and Business, Telkom University, Jl. Telekomunikasi no.1 Terusan Buah Batu Bandung 40257, Indonesia email: [email protected] ; [email protected]
Abstract Change is essential for every organization to survive and grow through environmental changes. Having the strong urgency does not make the organizational change management easy. The purpose of this study was to describe the learning organization process of a private university towards “A World Class University”. The study also identified how the organization faced the challenges during organizational changes and how the leaders handled them. The study used qualitative inquiry and phenomenology design to understand the natural phenomenon. The data was collected from interviews, observation, and documentation. The interview involved 11 subjects with different roles and positions. The study found that the organizational change dynamics happened in five phases: drive-forces, goals, challenges, strategies, and results. Based on Lewin’s three-step change model, the organizational change is on “movement” because it is still going on and the culture has not transformed.
© 2014 Dyah Puspo Mukti, Nidya Dudija, Dedy Sushandoyo, Didin Kristinawati. Published by Telkom Pub. Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia. Keywords: Organizational Behavior, Change Management, Learning Organization, Leadership
1.
Introduction Z-University is a merger result of four higher education institutions under a foundation owned by a private company in Bandung, named A-School, B-School, C-School, and D-School. Z-University was officially launched in August 2013 by the Foundation. Thus, the formers become an organization—Z-University, which has a vision to be “A World Class University”. The background of the organizational change was based on the interview result with Mr. J as former Chairman of Transformation Team II on December 13, 2013 at his office. The results were as follows: supporting government’s economic development programs (MP3EI) in human resource area, increasing effectivity and efficiency of resource management, and increasing organizational competitiveness through global competition. The strong urgency and certain goals didn’t make the organizational change easily Mr. J said that there were sectorial egos from the academic community as dominant resistance to change. Mr. K as ex. Chairman of Transformation Team I, in a mass media publication, said that there were some pros and cons as the reaction to the organizational change from the organization’s members. Conducting organizational change is never easy, there will always be resistance to change that can impede the organizational change and become an obstacle to the organization to reach the goals of change itself. But, “Change or Die!” is a challenge to leaders and managers today. Organization needs to adapt to keep alive and grow well facing the environmental change dynamics. [1] Leaders play a big role in the organizational change to establish the organization’s success story. Seven leaders’ basic roles in merger (as a kind of the organizational change) are: formulating vision and strategic plan, building effective communication, building positive organizational culture, keeping the fairness, negotiating and handling conflict effectively, solving problem and making decision, managing change and uncertainty. [2]
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In leadership theory, the main actors of the organizational change is the leaders. Meanwhile, the organization consists of not only the leaders, but also other members who determine the organization’s performances, including the success of organizational change. It is just not possible any longer to 'figure it out' from the top, and has everyone else following the orders of the 'grand strategist.' The organization which has member’s commitment and capacity to learn is called learning organization. The ability to learn faster than the competitors may be the only sustainable competitive advantage, as the world becomes more interconnected and business becomes more complex and dynamic. Learning organization is not the nature of every organization, but it can be learned and built. [3] Since the merger of four big organizations become a bigger one is a great phenomenon, the study about it has to be conducted. It takes the phenomenon as the study’s topic, and Z-University as the study’s object. Hence, eleven (11) persons with different roles in changes and various positions in the organizational membership as study’s subjects. The study is aimed to understand the organizational change management as a learning organization process in ZUniversity derived from the merger of A-School, B-School, C-School, and D-School. Moreover, the study is aimed to understand not only the challenges faced by the organization but also the way of the leaders to handle the challenges. Thus, the study can be a consideration for organizational change practitioners who want to build learning organization, be a reference for the readers and the next researchers, and be part of Z-University’s life story.
2.
Theoretical Framework The study used some theoretical framework which consisted of: organizational behavior, change management, learning organization, and leadership. Organizational behavior is a field of study that investigates the impact that individuals, groups, and structure have on a behavior that within organizations, for the purpose on applying such knowledge toward improving an organization’s effectiveness. Organizations face many challenges and opportunities in organizational behavior, some of them are: responding to globalization, managing workforce diversity, improving quality and productivity, improving customer service, improving people skills, stimulating innovation and change, coping the temporariness, working in networked organizations, helping in employees balance work-life conflicts, creating a positive workforce, and improving ethical behavior. [1]. There is no organization in a particularly stable environment, so that organizational change becomes a must-to-do to face the environmental change dynamics. There are a lot of forces in organization environment stimulating for organizational change, six specific of them are: nature of the work, technology, economic shocks, competition, social trends, world politics.[1]. Organizational change never came easy; resistances to change exist even if the organization has a strong urgency to change. The resistance to change has both positive and negative impact for the organization. It does not only provide a degree of stability and predictability to behavior in positive way, but also hinders adaptation and progress of the organization. The resistance comes from the organizational members and organization. Individual sources consisted of habit, security, economic factors, fear of the unknown, and selective information processing. Organizational sources consisted of structural inertia, limited focus of change, group inertia, threat to expertise, treat to established power relationship, threat to established resource allocation. [1]. Whitaker [5] concluded from her study that in US 60 % of merger cases (as one kind of organizational change) experienced the failure in fulfilling the financial expectation, because of the lack of top level managers’ concern to the organizational culture, both former organizations and the new organizational culture desired. Seven suggested tactics for change agent in dealing with resistance of change are by: education and communication, participation, building support and commitment, implementing changes fairly, manipulation and cooptation, selecting people who accept change, and coercion. Hence, change agent can be described as persons who act as catalyst and assume the responsibility for managing change activities. [1]. There are many approaches to manage organizational change. Kurt Lewin in Robbins & Judge [1] argued that successful organizational change should follow three steps: unfreezing the status quo, movement to desired end state, and refreezing the new change to make it permanent, as seen in fig.1.
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Fig.1. Lewin’s Three-Step Change Model John Kotter in Robbins & Judge [1] built on Lewin’s three-step model to create a more detailed approach in Kotter’s eight-step plan for implementing changes with eight sequential steps: establish the sense of urgency, form a coalition with enough power to lead the change, create a new vision to direct the change and strategies for achieving the vision, communicate the vision throughout the organization, empower others to act on the vision by removing barriers to change and encourage risk taking and creative problem solving, create short-term wins that move the organization toward the new vision, consolidate improvement and make necessary adjustments in the new programs, reinforce the changes by demonstrating the relationship between new behavior and organizational success. Tyagi quoted in Wibowo [4] developed a change model adopted from Lewin’s three-step change model, which started from: change forces, problem identification, problem solving process, change implementation, measure-evaluate-control change results. Transition management should be held in the change implementation phase, hence change agents play the role as the doers of the change, as seen in fig.2.
Fig.2. Tyagi’s Change Model Amstrong [2] in his study found that leaders played a big role in the organizational change to establish the organization’s success story. The organizational change success was examined from financial condition as long as the change process. Seven leaders’ basic roles in merger, as a kind of the organizational change, are: formulating vision and strategic plan, building effective communication, building positive organizational culture, keeping the fairness, negotiating and handling conflict effectively, solving problem and making decision, managing change and uncertainty. Leadership is defined as the ability to influence a group toward the achievement of a vision or set of goals. Leadership and management are two terms that are often confused, management coping with the complexity and leadership is about coping with change, but organizations need both strong leaders and strong management for optimal effectiveness. In today’s dynamic world, the organizations need leaders to challenge the status quo, to create visions of the future, and to inspire organizational members to want to achieve the visions. The organization also needs managers to formulate detailed plans, create efficient organizational structures, and oversee day-to-day operations. [1] Robbins & Judge [1] stated that “A learning organization is an organization that has developed the continuous capacity to adapt and change. Just as individuals learn, so too do organizations.” Senge [3] stated that “Learning organizations is organizations where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning how to learn together.” Robbins & Judge [1] summarized five basic characteristics of a learning organization, these were: people put aside their old way thinking, learn to be opened with each other, understand how their organization really works, form a plan or vision that everyone can agree on, and then work together to achieve that vision. Three fundamental problems inherent in traditional organizations were fragmentation, competition, and reactiveness.
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Senge [3] explained the way building the learning organization that was consisted of five disciplines: personal mastery, mental models, shared vision, team learning, and system thinking as the fifth disciplines to integrate and to fuse five of them into a coherent body of theory and practice. Personal mastery could be explained as the discipline of continually clarifying and deepening our personal vision, of focusing our energies, of developing patience, and of seeing reality objectively. Thus people with a high level of personal mastery committed to their own lifelong learning, so that personal mastery rolled as the learning organization's spiritual foundation. [3] Mental models could be explained as deeply ingrained assumptions, generalizations, or even pictures or images that influence how we understand the world and how we take action. The discipline of working with mental models should be started with turning the mirror inward; learning to unearth our internal pictures of the world, to bring them to the surface and hold them rigorously to scrutiny. It included the ability to carry on 'learningful' conversations that balance inquiry and advocacy, where people expose their own thinking effectively and make that thinking open to the influence of others. [3] Building shared vision could be explained as managing all organization to bind people around a common identity and sense of destiny. Genuine vision would inspire the people to excel and learn, not because they were told to, but because they wanted to. [3] Team learning would start with 'dialogue,' the capacity of members of a team to suspend assumptions and enter into a genuine 'thinking together.' Team learning would be vital because teams, not individuals, has been the fundamental learning unit in modern organizations. [3] System thinking could be explained as a conceptual framework a body of knowledge and tools developed over the past fifty years, to make the full patterns clearer, and to help us see how to change them effectively. [3] Robbins & Judge [1] suggested how to make the organization to be a continual learner, they were: establish strategy, redesign the organization’s structure, and reshape the organization’s culture. Since organizational culture has become a basic challenge to change, organizational change should be followed by developing adaptive organizational culture and culture to change like stimulating a culture of innovation and creating a learning organization. Cullen et.al. [7] found that organization’s leaders had a significant role in the organizational change as a mediator of the relationship between employees’ adaptability and perceptions of change, related uncertainty and employees’ satisfaction and performance. In a successful organizational change case, the leaders tended to share a positive energy and build effective communication to all organizational members, so that the organization’s members had a good perception on the change and adapted well to the change, and thus the organization’s member satisfaction and performance were improved. Therefore, the organizational change ran successfully. Nordin [8] who conducted a study in a higher learning institution found that there was a significant relationship between organizational commitment and leadership behavior on organizational readiness for change. Organizational change would be possible when the employees identified themselves with the organization. Organizational commitment will be beneficial to transactional leadership behavior during the early stage of change process, and thus may have a significant potential as change management strategy to implement successful change. The study also shows that continuance commitment indicates statistically significant moderate effect on the relationship between transactional leadership behaviors and readiness for change. Therefore, this implies that employee would be committed only if they find that leaving the organization would be a great loss, as they have invested their effort in the organization. In this sense, human resources management should also consider designing attractive rewards and benefits to ensure employee loyalty to the organization. However, further studies on longitudinal research methodology, which may be useful to validate the framework for organizational change, are suggested. Weiner’s [9] study showed organizational readiness as a shared psychological state in which organizational members felt being committed to the implementation of an organizational change and confident in their collective abilities to do so. He suggested the possibility that the strategies that change management experts recommend are equifinal which meant there is no 'one best way' to increase organizational readiness for change, but interrelated cumulative organizational behavior. Maden’s [10] study developed a conceptual model to transform public organization to be a learning organization. These organizations were primarily advised to develop a learning climate through the creation of a favorable atmosphere for individual and collective learning; and subsequently invest in organizational learning through higher knowledge creation and better knowledge management processes. It was believed that by examining the learning organization concept under the context of public organizations and proposing a novel model of transformation. The model was as seen in fig. 3.
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Fig.3. Conceptual Model to Transform Public Organization to be a Learning Organizations 3.
Methodology The study used qualitative approaches because of series of reasons. Creswell [6] said that qualitative study interpreted the philosophical assumption from the researchers. Philosophy meant the usage of abstract idea and belief about the study, hence philosophical assumption was the first pop-up idea to develop the research. The philosophical assumption was important to help the researchers to formulate the study’s problems and questions. The study collected data that consisted of words and figures, not numbers. The data were collected from interview verbatim, videotape recording result, observation notes, official documents, mass media publication, and others. The data analysis was presented by the meaning of the data. The study used phenomenology research design to identify the understanding of the phenomenon from multiple subjects’ experience. Creswell [6] said that phenomenology research design tend to focus on the common data collected, among others. Phenomenology had a goal to take the insight from the multiple subjects’ experiences. The researchers analyzed the multiple subjects’ experience, developed relations and pattern from them, and then presented the model to answer “what” and “how” they experienced the phenomenon. The study wanted to understand the organizational change dynamics in a private university—named Z-University that was seen by related parties in the process; they were: responsible parties in the organizational change to see what they had done to conduct the change, the parties who understood the technical process of the change, academic community as both the subject and the object of the change. Thus, the phenomenology research design was the most compatible for conducting the study. The study had some steps, which were: orientation, preparation to field research, field research, data analysis, data interpretation. At the orientation stage, the researchers started to observe the object but not intensely. At the preparation stage, the researchers prepared all the things needed to do field research (i.e. proposed the counselor lecturers, wrote application letters as the permission to conduct the study and to collect the data) and also started to collect secondary data from mass media publication, official and non-official websites, official documents, etc. At the field research stage, the researchers collected both secondary data and primary data. On data analysis stage, the researchers analyzed collected data (primary and secondary data), the primary data collection had been stopped but secondary data collection still went on until the end of the study period. At the data interpretation stage, the researchers compared the data analysis result and theoretical reference with previous studies. The study’s object was Z-University and the subjects were 11 persons with different roles and positions, consisted of: 2 representatives of the Foundation, ex. chairman of transformation task forces, senior manager of resource, 4 leaders of four faculties, other academic community members (a structural officer, a lecture, and a student). The data were collected by triangulation technique that combined observation, in-depth interview, and documents. Triangulation technique helped the researchers to keep the objectivity of conducting the study. 4. Result and Discussion 4.1. Result The study’s result came from data analysis collected from observation, documentation, and interview with 11 subjects. The subjects consisted of: Mr. J as ex. Chairman of Transformation Team II; Mr. K as ex. Chairman of Transformation
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Team I and also Dean of A-Faculty; Mr. L as Dean of B-Faculty; Mr. M as the representative from C-Faculty leader and also a structural officer; Mr. N as ex. Chairman of Foundation’s Strategic Alliance Directorate and also Dean of D-faculty; Mr. O as Senior Manager of Resources; Mr. P as Structural Officers; Ms. Q as a lecturer; Mr. R as a Foundation’s representative; Mr. S as another Foundation’s representative; and Ms. U as a student. The result would be presented in five phases of the organizational change sequentially as followed: the organizational change drive-forces; the organizational change goals; the organizational change challenges; the organizational change strategies; and the organizational change results. 4.1.1. The Organizational Change Drive-Forces Z-University was a merger result from four higher educational institutions under a foundation: A-School, B-School, CSchool, and D-School, said Mr. J as ex-Chairman of Transformation Team II. From Decision Letter from Education Ministry, it was known that after Z-University official launch, A-School became A-Faculty, B-School became B-Faculty, CSchool became C-Faculty, and D-School became D-Faculty in Z-University. The organizational change was driven by external and internal factors, Mr. J explained three of them: management of four schools under a foundation, the challenge of global competition, and the opportunity to play a bigger role in government’s economic development program (MP3EI). Mr. S as the Foundation’s representative explained that organizational change was driven by two internal factors, the existence of a shared vision to be “A World Class University” and the management of four schools under a foundation in a region that might allow for efficiency upgrading. The researchers, based on the explanation above, concluded that the transformational change from A-School, B-School, C-School, and D-School to be Z-University was driven by several internal and external factors, the internal factors consisted of the existence of a shared vision to be “A World Class University”; and management of four schools under a foundation in a region, hence the external factors consisted of the challenge of global competition and the opportunity to play a bigger role in government’s economic development program (MP3EI), as seen in fig.4. INTERNAL FACTORS Shared vision to be “A World Class University”
Four schools under a foundation in a region
“A-School” “Z-University”
“B-School”
Transformation
“C-School” “D-School” The challenge of global competition
The opportunity to play a bigger role in government’s economic development program (MP3EI) EXTERNAL FACTORS
Fig.4. Organizational Change Drive-Forces based on Data Analysis
4.1.2.
The Organizational Change Goals
Mr. J as ex. Chairman of Transformation Team II said that organizational changes of four large higher education institutions to be a larger one was an effort to achieve the shared vision of becoming “A World Class University” by
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gathering the power of the former-four. Resemble clarification was stated by senior manager of resources, who said that ZUniversity transformation was a decision to gather the strength to achieve common vision and mission. Mr. J said that transformation of Z-University was a kind of reaction from the foundation to face the environmental changes, both internally and externally which were explained in the previous sub-section, so the goals of the organizational change were to play a bigger role in government’s economic development program (MP3EI) by increasing contributions in human resources quality improvement, improving the organizational international competitiveness (including to enlarge the change to get research grants), and improving organizational effectiveness and efficiency. The researchers, based on previous description, concluded that the organizational change had some goals: to gather the strength to achieve the prime desire of becoming “A World Class University”; to improve the organization’s effectiveness & efficiency; to improve organization’s global competitiveness, and to play role on human resources development in government’s economic development program (MP3EI), as seen in fig.5. To gather the strength to achieve the prime desire of becoming “A World Class University” Organizational Change Goals
To improve the organization’s effectiveness & efficiency To improve organization’s global competitiveness To play role on human resources development in (MP3EI)
Fig.5. Organizational Change Goals based on Data Analysis
4.1.3. The Organizational Change Challenges The organizational change process experienced some challenges faced by academic community. Mr. J as ex-Chairman of Transformation Team II said that the biggest challenge of the mergers was the sectorial egos from several groups in the organization, a kind of superiority among others. Mr. O as Senior Manager of Resource explained that various organizational working systems and mechanisms in the former organizations was a challenge to merger processes, meanwhile the biggest challenge for the organizational change was the culture. Moreover, the former organizations had a different culture that had been attached for long. Organizational culture became a big challenge in the organizational change because it was formed from specific habits pattern in various organizational aspects. The organizational change, which was followed by organizational restructuring, caused position and authority changing issuess, not only on the leaders of former-four but also on the other organizational members. Mr. M as the representative of C-Faculty leader explained that the new organizational structure drove to a “culture shock” condition to the organizational members because of rapid changes. The first Rector of Z-University who came from the outside of the Foundation said that a new formation on organizational structure drove communication challenge to the academic community, sometimes miscommunication and multi-perceptions could lead to misunderstanding and confusion of provided information. The organizational change also disturbed the comfort zone of many organizational parties. It demanded for adaptation both systematically from organizational leaders and individually from the other members for the new system made by the leaders. The organizational change demanded the organizational members to improve the competencies and capabilities such as English competencies, but sometimes the organizational members who felt under pressure experienced working spirit loss or reduced performance. Mr. P as a structural officers said that having new organizational structure and new formation in units led to knowledge sharing, a structural officer said that the knowledge sharing occurred naturally in the way they worked but another structural officer said that it had not enough yet . Ms. Q as a functional officer (lecturer) had not felt much of the organizational change impact because only a few policies for lecturers had been applied effectively at the end of February 2014. There was a new funding policy for lecturer’s research publication that only covered registration fee. The lecturer gave some advices in organizational change implementation to the top level managers, they were: to make governance or governance guidelines, so the organizational
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members have certain guidelines to do to face the organizational change; to improve communication quality so the information could be effectively received as it is presented; and to prepare information system capacity appropriate to entire academic community usage. Ms. U as a student said that she felt the decline in several areas’ quality of service, such as the financial system on the registration process and academic secretariat facilities. Students were confused about academic regulations due to the rapid changes, hence the socializations had not been intense and effective enough. Some students’ confusions happened on the regulations of internship, final assignment, and academic calendar. Student organizations were changed structurally, consisted of Student Executive Board (BEM) and the Student Representative Council (DPM) that would exist only at the university-level and faculty-level, the emergence of several Student Association (HIMA), and the merger of the similar Student Activity Unit (UKM) at the university-level. The change of student organization structure was followed by the change of budgeting policies for student activities as a whole. Before Z-University Grand Launching, the student activity fund was given to each of former-four, hence it was centralized in the university-level. It would be a huge task to share it fairly to all parties. The researchers, based on subjects’ explanation above, concluded that the organizational change process experienced many challenges faced by the academic community as seen in Fig.6. Structural officials and employees faced: sectorial egos of academic community; former systems & working mechanisms incompatibility; position and authority worries; culture shock; communication ineffectiveness & inefficiency; lack of knowledge sharing; comfort zone; demand on individual capability improvement. Functional officers or lecturers faced research publication budget decreased; obscurity on governance or governance; communication ineffectiveness & inefficiency. Students faced: obscurity on academic regulations (internship, final assignment, and the academic calendar); change in students’ organization; change in students’ activity budgeting.
STRUCTURAL OFFICERS & EMPLOYEES a. Sectorial egos of academic community b. Former systems & working mechanism incompatibility c. Position and authority worries d. Culture shock e. Communication ineffectiveness & inefficiency f. Lack of knowledge sharing g. Comfort zone h. Demand on individual capability improvement Organizational Change Challenges
FUNCTIONAL OFFICERS a. Research publication budget decrease b. Obscurity on governance or governance c. Communication ineffectiveness & inefficiency STUDENTS a. Obscurity on academic regulations (internship, final assignment, and the academic calendar) b. Change in students organization c. Change in students’ activity budgeting
Fig.6. Organizational Change Challenges based on Data Analysis
4.1.4.
The Organizational Change Strategies
Mr. R, as a Foundation’s representative said that the Foundation established three task forces to handle the change execution; they were: Strategic Alliance Directorate, Transformation Team I, and Transformation Team II. Strategic Alliance Directorate conducted study of initial organizational condition, made a conceptual model of organizational change, and focused to complete the academic document as the application of inauguration. Transformation Team I began the
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implementation of the organizational change and improved the academic documents. Transformation Team II accelerated the implementation process, integrated the academic system, and established the transition senate. Mr. S, as another Foundation’s representative said that organization’s fundamental aspect of Z-University—vision, missions, and goals—had been set by the task forces before the grand launching was hold. Mr. O, as Senior Manager of Resource in Z-University had an organizational structure which was different from the organizational structures of the other four former organizations. It also had new governance which was centralized in the university-level working unit. New personnel formation that could trigger gaps was anticipated by organizing a team building activity to create solidity in the working unit and in the organization as a whole. Mr. S, as a Foundation representative said that the leaders of Z-University composed an organizational strategic plan systematically. After organization vision, missions, goals, and strategies were set, the leaders built the communication in the organization. Communication building needed openness and positive thinking from all organization’s members. The leaders built a two-way communication; the leaders not only gave top-down information but also accepted feedbacks from the other organization’s members. Formal communication was built by series of meetings (at foundation-university-faculty-study program level), centralized lecturer’s meetings, official websites, etc. Informal communication was built by sport activities, lunch coupons, family gatherings, etc. said Mr. M as the representative of C-Faculty leaders. Mr. J said that at the end of his term period, his team suggested to establish a transitional period for about a year after the Z-University official launching. The transition period was used to continue the organizational change process which had not been done by the team. Transition period was applied to accommodate the interests of many parties in the organization, and it was used as an adaptation period for all members on the changes -. A lot of things had been done during the transition period; some of which are: refinement of organizational structure and governance, rearrangement and expansion of faculty program, the election of the new Dean for seven faculties, integration of all aspects of the organization, and the building of organizational culture. Mr. O, as Senior Manager of Resource said that after Z-University officially launched, they established Change Management Team which was a group leader, tasked to oversee changes to achieve organizational goals in 2017 and to oversee all management aspects such as finance, human resources, logistics, etc. Mr. O said that the organizational culture, as one of common issue key factors in the merger, was transformed slowly by Z-University. The culture should be the same as the academic atmosphere in university environment. It was adopted by the culture from owner organization. Z-University had series of core values as a compassion for organizational behavior. The researchers, based on the subjects’ explanation above, concluded that Z-University had some strategies to organizational change process, ten of them were: establishing task forces; setting organizational visions, missions, and goals; establishing organizational structure and governance; organizing team building activity; composing strategic plan, managerial & budget plan, quick win and individual performance systematically; establishing multi ways communication; transition period; integrating all organizational aspect; establishing change management team; transforming organizational culture slowly, as seen in fig.7.
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Establishing task forces Setting organizational vision, missions, and goals Composing organizational structure and governance Organizational Change Strategies
Organizing team building activity Composing strategic plan systematically Establishing multi ways communication Transition period Integrating all organizational aspect Establishing change management team Transforming organizational culture slowly
Fig.7. Organizational Change Strategies based on Data Analysis
4.1.5.
The Organizational Change Results
The change could be noticed by the difference between the input and the output. Organizational change results did not show the end of change, but described the final condition at the end of primary data collection period (March 13, 2014). There were some results of organizational change: visions, missions, and goals of the organization had been set by the task forces, hence the strategic plan had been composed by leaders of Z-University. Mr. L, as a Dean in B-School said that Z-University had an organizational structure and governance that had been used since the organizational grand launching. Mr. P, as a structural officer, said that the working units in university-level were established directly under each of Vice Rectors and the formation consisted of the combination of former organizations’ personnel. Mr. M, as another structural officer said that working units in faculty-level still exist as the representative from working units in university-level, so that the working system and mechanism had been centralized and faculties might be focus holding the three-promise of higher education (Tridharma Perguruan Tinggi). Mr. K said that four former organizations had turned into four faculties in Z-University which had a dean of each. Three of four Deans were the former organizations’ chairman, hence the other one was the chairman of Foundation’s Strategic Alliances (the first task force). At the end of primary data collection period, Z-University was conducting the election of new Dean of seven faculties which was planned to be inaugurated in April 2014. Ms. U, as a student said that student organization had a new structure, the Student Executive Board (BEM) and the Student Representative Council (DPM) that would be exist at the university-level and faculty-level, the emergence of Student Association (HIMA), hence the Student Activity Unit (UKM) were merged at the university-level. Some faculty leaders said that six months after grand launching, organizational culture had not been established. They said that top level manager did not focus on culture formation, but they focused on the restructuration and new governance establishment. They said that that organizational culture of Z-University would be formed naturally through provided facilities. Z-University held many activities supporting to natural interaction among organizational members. The acculturation happened slowly after the grand launching. The researchers, based on the subjects’ explained above, concluded that until the end of primary data collection period on March 13, 2014, the organizational change had some results, they were: organizational vision, missions, goals, and
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strategic plan; organizational structure and governance; centralized & integrated systems & working mechanism; new academic regulations; four faculties and the Dean for each; new students organization structure; the organization was conducting the election for seven new faculty Deans; the organization was rearranging new organizational structure & governance; the organizational culture had not been transformed clearly, as seen in fig.8.
Organizational vision, missions, goals, and strategic plan Organizational structure and governance Centralized & integrated systems & working mechanism Organizational Change Results
New academic regulations Four faculties and the Dean for each New students organization structure The organization was conducting the election for seven new faculty Deans The organization was rearranging new organizational structure & governance The organizational culture had not transformed clearly
Fig.8. Organizational Change Results based on Data Analysis
The researchers, based on the data analysis, concluded that the organizational change of A-School, B-School, C-School, and D-School to be Z-University (from initiation of change in March 13, 2014) could be described by the organizational change dynamics, as followed: organizational change of drive-forces; organizational change of goals; organizational change of challenges; organizational change of strategies; and organizational change of result, as seen in fig.9.
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1. 2. 3. 4.
ORGANIZATIONAL CHANGE DRIVE-FORCES Shared vision to be “A World Class University” Four schools under a foundation in a region The challenge of global competition The opportunity to play a bigger role in government’s economic development program (MP3EI)
1. 2. 3. 4.
2.
3.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.
1. 2. 3. 4. 5. 6. 7. 8.
9.
ORGANIZATIONAL CHANGE CHALLANGES Structural officers & Employees : a) Sectorial egos of academic community; b) Culture shock; c) Former systems & working mechanisms incompatibility; d) Position and authority worries; e) Communication ineffectiveness & inefficiency; f) Lack of knowledge sharing; g) Comfort zone; h) Demand on individual capability improvement Functional officers : a) Research publication budget decrease; b) Obscurity on governance or governance; c) Communication ineffectiveness & inefficiency Functional officers : a) Obscurity on academic regulations (internship, final assignment, and the academic calendar); b) Change in students organization; c) Change in students’ activity budgeting
ORGANIZATIONAL CHANGE STRATEGIES Establishing task forces Setting organizational vision, missions, and goals Composing organizational structure and governance Organizing team building activity Composing strategic plan Quick win and individual performance systematically Establishing multi ways communication Transition period Integrating all organizational aspect Establishing change management team Transforming organizational culture slowly
ORGANIZATIONAL CHANGE RESULTS Organizational vision, missions, goals, and strategic plan Organizational structure and governance New academic regulations Centralized & integrated systems & working mechanism Four faculties and the Dean for each New students organization structure The organization was conducting the election for seven new faculty Dean The organization was rearranging new organizational structure & governance The organizational culture had not transformed clearly
Fig. 9. Organizational Change Dynamics based on Data Analysis
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ORGANIZATIONAL CHANGE DYNAMICS FLOW
1.
ORGANIZATIONAL CHANGE GOALS To gather the strength to achieve the prime desire of becoming “A World Class University” To improve the organization’s effectiveness and efficiency To improve organization’s global competitiveness To play role on human resources development in (MP3EI)
Organizational Change Dynamics: A Learning Organization Process toward World Class Organization (Study at Private University)
4.2. Discussion Organizational change of drive-forces in A-School, B-School, C-School, and D-School to be Z-University, based on data analysis, came from both external and internal factors. The external factors consisted of the challenge of global competition and the opportunity to play a bigger role in government’s economic development program (MP3EI), while the internal factors consist of the existence of a shared vision to be “A World Class University” and the ownership of four schools under a foundation in a region. The rising global competition is still a strong force for the organization to conduct the organizational change, as Robbins & Judge [1]. Global competition cannot be avoided as a change drive-force when the organization has a desire to compete globally, like Z-University which aimed to be “A World Class University.” Four former organizations react to four main organizational drive-forces in the form of the decision to merge into one bigger organization. The decision came because of the urgency to change, which means the worries of organization’s life facing the organizational change dynamics. This is like Robbins & Judge [1] theory that said, leaders and managers today are challenged by “Change or Die!” by the environment. Organizational change decision as a product of the merger of the four has the same goals consisting of: to gather the strength to achieve the prime desire of becoming “A World Class University”; to improve the organization’s effectiveness and efficiency; to improve global competitiveness, to play a role in the human resources development in MP3EI. Just like another merger case, Z-University transformation aimed to optimize resource effectiveness and efficiency from former organizations. But unfortunately, 60 % of the merger case (as one kind of organizational change) failed to reach the change goals because of the lack of top level managers’ concern to the organizational culture, as Whitaker [4] explained in her study result. Even if A-School, B-School, C-School, and D-School are owned by a foundation and frequently organized an official meetings, four of them had different backgrounds, different behaviors, different leaders, and different cultures. The biggest challenge faced by the task force of change was the sectorial egos from the organization’s members. Facing the challenges to change, the organization practices some strategies; there are ten of them based on the data analysis: establishing task forces; setting organizational visions, missions, and goals; establishing organizational structure and governance; organizing team building activity; composing strategic plan, managerial & budget plan, quick win and systematic individual performance; establishing multi-way communications; transition period; integrating all organizational aspects; establishing change management team; transforming organizational culture slowly. Based on Tyagi’s Change Model quoted in Wibowo [4] or fig. 2, shows that three task forces before official grand launching act as change agents in the organizational change. The first task force—Foundation’s Strategic Alliance Directorate was used to identify problems as they made organizational change concept and plans, they solved the problems at top level managers in four former organizations as they worked until the declaration of merger agreement. The second task force—Transformation Team I started to implement the organizational concept and plans, but they faced a lot of problems from the lower level managers and another academic community. The third task force—Transformation Team II continued and accelerated the implementation process but they still faced the problems from the academic community. The official launching had been organized on August 2013, and the three task forces had finished their term, but the implementation of the organizational change had not been done yet. As the data analysis result said that Z-University established a transition period for about a year after the official launching. Based on Tyagi’s Change Model quoted in Wibowo [4] or Fig. 2, the transition management is part of the implementation process. It means that Z-University is at the Change Implementation Stage. The organizational changed at the end of the data collection period in March 2013. Based on the data analysis, it had some results. They were: organizational vision, missions, goals, and strategic plan; organizational structure and governance; new academic regulations; centralized & integrated systems & working mechanism; our faculties and the Dean for each; new students organization structure; the organization was conducting the election for seven new faculty Dean; the organization was rearranging new organizational structure & governance; the organizational culture had not transformed clearly. Based on Lewin’s three-step change model in Robbins & Judge [1] or Fig. 1, the organizational change was on the movement step, because there were still changes organized and the culture had not been transformed.
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Communication is the most vital in the organizational change period; effective communication will influence the perception of the organizational members about the positive impact of change. An effective communication is the mediator of conflicts of interest in the organization. This is the same as what Cullen et.al. [7] state that leaders have to build an effective communication between all organization’s members, so that the organization’s has a good perception about the change and adapt well to the change, and thus the organization’s members have a good satisfaction and performance, which will make the organizational change run successfully. A good perception of change in the organizational change will create readiness to change and an adaptability of the organization’s members. Z-University created readiness to change step-by-step top down, because in leadership theory, a leader is a key person that plays a big role in the organizational change. As Amstrong [2] said that leaders played a big role in the organizational change to establish the organization’s success story. The organizational change success was examined from its financial condition during the change process. Seven leaders’ basic roles in merger, as a kind of the organizational change, were: formulating vision and strategic plan, building effective communications, building positive organizational culture, keeping the fairness, negotiating and handling conflict effectively, solving problem and making decision, managing change and uncertainty. The leaders have the capacity to create a condition of ready to change from all organization’s aspects, the leaders need to build the commitment from the organization’s members, so they have confidence in their collective ability to face the change, as Weiner [9] had explained before. 5.
Conclusion and Recommendation The study was aimed to describe the organizational change dynamics in Z-University, the challenges they faced and the way the leaders handle them. Organizational change dynamics of Z-University happened in five phases: drive-forces, goals, challenges, strategies, and results. Organizational change drive-forces, based on data analysis, came from both external and internal factors, external factors consisted of the challenge of global competition and the opportunity to play a bigger role in government’s economic development program (MP3EI), hence the internal factors consisted of the existence of shared vision to be “A World Class University” and the ownership of four schools under a foundation in a region. Organizational change, based on data analysis, had some goals: to gather the strength to achieve the prime desire of becoming “A World Class University”; to improve the organization’s effectiveness & efficiency; to improve organization’s global competitiveness, and to play role on human resources development in government’s economic development program (MP3EI). Challenges faced by the organization, based on the data analysis, came from many challenges which were faced by the academic community. Structural officials and employees faced: sectorial egos of academic community; former systems & working mechanisms incompatibility; position and authority worries; culture shock; communication ineffectiveness & inefficiency; lack of knowledge sharing; comfort zone; demand on individual capability improvement. Functional officers or lecturers faced research publication budget decrease; obscurity on governance or governance; communication ineffectiveness & inefficiency. Students faced: obscurity on academic regulations (internship, final assignment, and the academic calendar); change in students’ organization; change in students’ activity budgeting. Knowing the urgency to change but facing the challenges to change, inspired the organization’s leader to do some change strategies, based on the data analysis, ten of them were: establishing task forces; setting organizational vision, missions, and goals; establishing organizational structure and governance; organizing team building activity; composing strategic plan, managerial & budget plan, quick win and individual performance systematically; establishing multi ways communication; transition period; integrating all organizational aspect; establishing a change management team; transforming organizational culture slowly. The organizational change, based on the data analysis, until the end of primary data collection period in March 13, 2014, the organizational change had some results; they were: organizational vision, missions, goals, and strategic plan; organizational structure and governance; centralized & integrated systems & working mechanism; new academic regulations; four faculties and the Dean for each; new students organization structure; the organization was conducting the election for seven new faculty Deans; the organization was rearranging new organizational structure & governance; the organizational culture had not transformed clearly.
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The organizational change of Z-University has not completed yet, because at the end of the research period, the change was still going on and the organizational culture had not been transformed clearly. It was in still in the “movement” step based on Lewin’s three-step model [1]. That is similar with Kotter’s eight steps to change [1] that the organizational change would end with the establishment of the organizational culture.
Acknowledgements The author wishes to thanks the leaders of the private university and university foundation who participated in this research and kindly shared their ideas and experiences. The author also thanks the lecturers, students and employees in the private university for insightful comments that improved the manuscript.
References [1] [2] [3] [4] [5] [6] [7]
[8] [9] [10]
Stephen P. Robbins, Timothy A. Judge, Organizational Behavior, (2009) 669-671 Grant Amstrong, Leadership in Times of Change: An Examination of A Merger Experience, Thesis, University of Toronto, Canada (2011) Peter M. Senge, The fifth discipline: the art and practice of the learning organization, e-Book, New Mexico: Wheelwright Museum of the American Indian, Santa Fe (1994) Wibowo, Managing Change: Pengantar Manajemen Perubahan, Bandung: Penerbit Alfabeta (2006) Mary Kay Whitaker, Dimensions of Organizational Culture During A Merger: A Quantitative Perspective from Non-Managerial Employees, Dissertation, Capellea University (2011) John W Creswell, Qualitative Inquiry and Research Design : Choosing Among Five Approaches (3rd Edition). California : Sage Publications, Inc. (2013) Kristin L. Cullen, Bryan D. Edwards, Wm. Camron Casper, Kevin R. Gue, Employees’ Adaptability and Perceptions of Change-Related Uncertainty: Implications for Perceived Organizational Support, Job Satisfaction, and Performance, Journal, Springer Science Business Media New York (2013) Norshidah Nordin, The influence of leadership behavior and organizational commitment on organizational readiness for change in a higher learning institution, Journal, Asia Pacific Education (2012) Bryan J Weiner, A theory of organizational readiness for change, Journal, BioMed Central (2009) Ceydan Maden, Transforming Public Organizations into Learning Organizations: A Conceptual Model, Journal, Springer Science Business Media New York (2012)
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Polytechnics Produce Nation’s Skilled Labour Haji Abdul Rahim Othman1), Hajjah Hasnah binti Muhamad, GK. Marriappen Seberang Perai Polytechnic. Penang. Malaysia 1) rahi[email protected]
ABSTRACT This is a conceptual paper to study the education skills that are available in the Malaysian polytechnics which is one of the technical and vocational training institutions established to produce skilled workforce. The existing 33 polytechnics in the country which come under the purview of the Ministry of Education, Malaysia, offer a wide range of courses at diploma and degree levels. These institutions implement and follow the semester system in their academic calendar. There are three types of courses offered at the polytechnics, namely Engineering, Tourism & Hospitality and Commerce, and Information Technology and Communications. The education offered in these polytechnics emphasizes on two main aspects; theoretical and practical. This paper goes on to explore the role played by these technical and vocational training institutions in producing skilled workforce to fill positions such as technician, assistant engineer, engineer, assistant accountant, administrative assistant, information technology officers and other positions based on student eligibility.
© 2014 Haji Abdul Rahim Othman, Hajjah Hasnah binti Muhamad, GK. Marriappen. Published by Telkom Pub. Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia. Keywords: education, skills, workforce, polytechnics
1.0
INTRODUCTION Malaysian polytechnics’ history commenced with the establishment of Ungku Omar Polytechnic back in the year 1969. It was established under the United Nations Development Plan 1969 and is the first and the oldest polytechnic in Malaysia. The main purpose of this establishment was to produce skilled manpower in the technical and vocational field to meet the Malaysian workforce needs. The establishment of the polytechnic was later enhanced with the introduction of two sub sections in the Education Act: Section 34 and Section 35 [1], which places its emphasis on upgrading existing skills and other vocational of technical trainings. These initiatives were taken to strengthen the role of polytechnics to meet the increasing demand of the semiprofessionals. Presently, there are 33 polytechnics in Malaysia with the capacity of 110,000 students and this number is estimated to grow to the capacity of 119,000 by 2015. Out of these 32 polytechnics, three have been granted the status of premier polytechnic. Malaysia is proud to have its own premier polytechnics: Ungku Omar Polytechnic (PUO), Sultan Sallahudin Abdul Aziz Shah Polytechnic, Shah Alam (PSA); and Sultan Ibrahim Polytechnic, Johor (PIS). These three premier polytechnics offer the programs of bachelor's degree with honors besides the conventional Diploma. These upgrading and transformation are line with the introduction of Polytechnic Transformation Plan by Department of Polytechnic Education. This initiative was to enable polytechnics to assist the country to achieve its objectives of becoming a developed country in the year 2020. This transformation plan was launched by the Deputy Prime Minister of Malaysia on 25 February 2010. During the launch then Minister of Higher Education stressed that [2,3]
“…implementation of this transformation will focus on the provision of more opportunities to study in the polytechnic system. Gradual upgrading of all polytechnics will be done to provide world-class courses and diplomas. The transformation plan will also establish a number of polytechnics as premier polytechnics which will focus on the centralization of expertise and knowledge in the areas of expertise or niche in line with the development of the home grown talents. This is expected to
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raise the standard of knowledge in the development of polytechnic institutions and the country's skills to a higher level. Upgrades are necessary to meet the needs of human capital and technology-based industries”. Presently, Malaysian Polytechnics are able to accommodate approximately 42,000 places for students in each intake. Each state in Malaysia has at least one polytechnic which offers different types of technical courses. In the state of Pulau Pinang alone there are three polytechnics namely the Seberang Perai Polytechnic (PSP), the Balik Pulau Polytechnic (PBU), and the Tasek Gelugor Metro Polytechnic. In Kedah, there are two polytechnics, namely the Sultan Abdul Halim Polytechnic (POLIMAS) and the Tuanku Sultanah Bahiyah Polytechnic (PTSB). Meanwhile in Perlis, there is the Tuanku Syed Sirajuddin Polytechnic (PTSS). Polytechnics are classified as Public Higher Learning Institutions (IPTA) under the Malaysian Ministry of Education. Further details on Malaysian polytechnics are available at the website www.politeknik.gov.my.
2.0
EDUCATION WITH SKILLS IN THE POLYTECHNICS Education and skills are two different matters; however, both complements each other in certain areas. In fact there should always be education in skills development. Skilled people who do not uphold positive values would not be able to live their life in perfect harmony. For example very highly skilled mechanics would fail in the business if they constantly could not meet the promised deadline, and vice versa. Skills are the abilities of a person to apply the knowledge taught to them in a practical or hands-on nature. In the polytechnics, the practical skills are taught in laboratories and workshops which are equipped with a number of latest technology. The practical or hands-on rate is 40%, while the teaching of theories is 60%. With systematic study methods, state of the art facilities, and well trained and competent lecturers, the polytechnics are becoming the best choice for students in pursuing their education. The polytechnics adopt the semester system for its academic calendar. With low fees and the availability of a wide range of assistance, the polytechnics have become very affordable and attractive technical study centers. To date, Polytechnics have produced more than 300,000 skilled workers to fill job sectors in the country and abroad.
3.0 ELIGIBILITY FOR ADMISSION TO POLYTECHNIC The polytechnics accept students with Sijil Pelajaran Malaysia (SPM) or ‘O’ level to pursue their study in various courses offered. To be eligible for the admission to the polytechnics, one has to be a Malaysian, has passed the in Sijil Pelajaran Malaysia (SPM) or equivalent, with a minimum of five (5) credits including Bahasa Malaysia. The advertisement for admission to polytechnics will be published in major local newspapers such as Berita Harian, Utusan Malaysia, The Star and News Straits Times. There are two intakes per year; July and December intakes. Besides the local dailies, students can refer to Department of Polytechnic Education website at www.politeknik.gov.my for admission information. 4.0 STUDYING IN THE POLYTECHNICS The governments has established various training institutions and implemented various programs for youth. However, polytechnic has its own special functions. Class or lecture will begin as early as 8.00 am and end at 5.00 pm. The class schedule is flexible in nature depending on the syllabus requirements or what is known as the lesson contents. Each class has the capacity of 25 to 40 students. There is also a mass lecture method, which combines a number of classes in a series of lectures held in the main lecture hall. Lab sessions or practical classes are usually divided into smaller groups to enable lecturers to pay closer attention to the students during the teaching and learning process. Practical components in the field of mechanical engineering, civil engineering, electrical engineering, and information and communication technology system are usually carried out in workshops and laboratories using the latest technology. In addition there are also libraries for students to make references, conduct study groups or get information. Besides that Wi-Fi is available throughout all the polytechnics in Malaysia. Almost all the polytechnics provide hostel for their students
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although the capacity varies in number. There are also facilities available for sports and recreational activities which help promote healthy living environment and consequently support the emergence of holistically competent students. Nevertheless, many programs are also conducted to unearth talents who could contribute to nation development. All the polytechnics are also taking initiatives to upgrade their facilities to provide world class learning environment. The Government also plays its role in allocating huge amount of budget to improvise the existing facilities and build new ones as it is the onus of the government to provide the necessary funding to help these institutions to stay relevant and compete with their private counterparts. This effort goes in line with the call by Krogh et al ( 1996) [4], “construction of new schools or
learning definitely helps in upgrading educational facilities and providing better quality of education, but it is equally vital to maintain existing schools or existing to acceptable healthy standards’.
5.0 DRIVING THE NATIONAL DEVELOPMENT A study by the Ministry of Higher Education in 2011 found that, out of a total of 34,832 graduates from polytechnics in Malaysia, 67.7% were from the technical area, 24.0% were from the arts and social sciences, and 6.3% were from the information & communication technology. The arts and social sciences graduates are those who are pursuing studies in commerce, accounting, banking, business management, and tourism and hospitality disciplines. Apart from that, high-impact programs such as diploma in aircraft maintenance engineering, diploma in petrochemical engineering, diploma in shipping engineering, diploma in automotive design and manufacturing, diploma in biotechnology, diploma in textile engineering, fashion and clothing design, aqua-culture, and agro-technology are also offered in the polytechnics. A study on the employability rate among polytechnic graduates is constantly done by the respective polytechnics and also the Department of Polytechnic Education. The findings are promising and most of the polytechnic graduates could find jobs within six months upon graduating. Interestingly several studies conducted found that 71.2% of Malaysian polytechnic graduates have found employment within six months of completing their studies. From the data, 13.8% of them has successfully pursued higher education and upgraded their skills level. This is indeed a vital achievement indicating that polytechnic graduates are major contributors to skilled talents in Malaysia. The following is the data collected from Seberang Perai Polytechnic which shows the status of the students who have graduated in 2014. Figure 1 : Graduated Students’ Status 2014 Status Working 627 Continuing Education to higher level 172 Up skilling 33
% 62.0 17.0 3.26
Waiting for Posting after Interview
35
3.5
144 1,011
14.24 100
Unemployed Total Source: Tracers Study Unit, Seberang Perai Polytechnic
6.0 CONCLUSION As a leader in the field of technical and vocational education and training (TVET) polytechnics have produced many skilled workers who have filled important posts in the industry. Youth must seize this golden opportunity to become skilled workers since they can earn high income at par with professionals in other sectors. Taking example from the developed countries such as Germany, England, USA, Korea and Japan, skilled workers over there receive high pay. High-impact industries such as oil & gas, aviation, ports, industrial manufacturing, automotive, construction and agriculture are catalysts to a developed country. The role of polytechnics as institutions of higher learning to train skilled workforce is clear and well proven. Thus it is the onus of the youths to take this golden opportunity and enroll in the polytechnics to further contribute to the development of the nation. Humbly, we invite youths to choose polytechnics as their skills learning destination.
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REFERENCE: [1]
Department of Polytechnic Education. (2009). Hala tuju transformasi politeknik: Ke arah kelestarian penghasilan modal insan negara. Putrajaya: Department of Polytechnic Education.
[2]
High Education Ministry. (2012). Laporan kajian pengesanan graduan 2011. Putrajaya: Runz Creative Sdn. Bhd.
[3]
High Education Ministry of Malaysia. (2008). Pelan strategik pengajian tinggi negara melangkau tahun 2020. Kuala Lumpur: High Education Ministry.
[4]
Krogh, George Von, and Johan Roos(1996) Managing knowledge: perspectives on cooperation and competition. SAGE.
1) The writer is a Principal Lecturer at Seberang Perai Polytechnic, has experiences in teaching secondary vocational schools and secondary technical schools; was a Director at a Community College, a Student Affairs Officer of a polytechnic and also a Counseling Officer; holds a Bachelor's degree from University of Technology Malaysia (UTM), a Master’s degrees from University of Science (USM) and a Master’s degree from Technical Teaching College; and furthered his studies at the Seneca College of Applied Art and Technology, Toronto, Canada .
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Positive Psychology and the Learning Organization John Becka, Chia Ho-Bengb a
b
Zhejiang University of Technology, 18, Chaowang Road, Hangzhou, P.R.China. NUS Business School, Mochtar Riady Building, BIZ 1 4-1, 15 Kent Ridge Drive, Singapore 119245
Abstract Positive psychology is the latest branch of psychology that was started in 1998. It emphasizes the use of scientific methods in studying positive human development. Seligman and Csikszentmihalyi (2009) define positive psychology as 'the scientific study of positive human functioning and flourishing on multiple levels that include the biological, personal, relational, institutional, cultural, and global dimensions of life.' Part of the research agenda, thus far, is to develop evidence based practical interventions to promote 1) positive experiences, 2) enduring psychological traits, 3) positive relationships, and 4) positive institutions (Peterson, 2009). The research evidence gathered thus far is compelling and suggests that positivism changes the individual’s worldview, mental energy, relationships, and potential (Fredrickson, 2009). Furthermore, interventions based on positive psychology have been implemented in the United States Army with significant beneficial effects This paper discusses 1) the potential implication of positive psychology on developing a learning organization that maximizes and retains the talents within; and 2) the possible interventions that enable individuals to flourish, develop organizational processes, and culture that leads an innovative and productive organization, 3) the possible barriers and preconditions that would maximize the benefits of organizational interventions. Finally, this paper discusses possible practical research that may be conducted within organizations.
© 2014 John Beck, Chia Ho-Beng. Published by Telkom Pub. Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia. Keywords: Positive Psychology, Learning organization
What is Positive Psychology? Positive psychology as defined by the University of Pennsylvania Positive Psychology Center is “the scientific study of the strengths and virtues that enable individuals and communities to thrive. The field is founded on the belief that people want to lead meaningful and fulfilling lives, to cultivate what is best within themselves, and to enhance their experiences of love, work, and play.” According to Seligman (2011) positive psychology is the science of well-being and the outcome is flourishing. Well-being theory has five elements, namely, 1) positive emotions, 2) engagement, 3) meaning, 4) positive relations, and 5) achievement (PERMA). Positive emotion is one’s subjective experience of happiness and life satisfaction. These include the experience of love, joy, gratitude, interest, serenity, hope, pride, amusement, inspiration and awe (Fredrickson, 2010). Engagement refers to being completely absorbed by a task. We experience a state of “flow” where we lose the sense of time and self while being focused only on the present. Positive relationships refer to having good relationship with other people. Meaning refers to belonging to something and serving that something that you believe is bigger than the self. Accomplishment refers to the pursuit of success, achievement, and mastery for their own sake. Huppert & So (2009) define flourishing as a state where the individual has positive emotions, is engaged, has interest, meaning and purpose. In addition, the person must experience 3 of the following: high self-esteem, optimism, is resilient, has vitality, has self-determination, and has positive relationships.
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The Research Findings Studies show that happiness precedes indicators of thriving, success, and achievement (e.g., Staw, Sutton & Pelled, 1994). Meta-analysis of 200 studies that included nearly 275,000 individuals found that happiness leads to success in diverse domains including marriage, friendship, community involvement, creativity, jobs, careers, and businesses (Lyubomirsky, King, & Diener, 2005). Other studies found that happiness lead to better sale performance, leadership, performance ratings, and higher wages (Achor, 2010). Happier employees enjoy greater job security, are less likely to take sick leave, less likely to quit or become burned out. Furthermore, happier CEOs are more likely to lead happier and healthier employees who perceive their work climate that contributes to high performance (Achor, 2010). Diener et. al, (2002) found that happiness level of first year college students predicted income levels nineteen years after they graduated. In contrast, Gallup-Healthways Well-Being Index (2008) found that unhappy employees take on an average 15 more sick days per year. Cohen et. al., (2003) found that when they introduced the cold virus to volunteers, those who were happier were less likely to succumb to the viral attack. Happier individuals had less sneezing, coughing, inflammation, and congestion. Thus, positivity protects us from illnesses. The implication is that positive employees are likely to take fewer sick days. The effects of positive psychology extend beyond resilience to disease. It also affects the way we cope and solve problems. When we are faced with a difficult situation or problem, negative emotions narrow our focus and attention to flight or fight while positive emotions broaden the scope of attention and increase thought-action repertoires (Fredrickson, 2005). Positive emotions broaden the possibilities we process, allowing us to be more thoughtful, creative, and open to new ideas. Thus, when we are generally positive, we build more intellectual, social, and physical resources that we are able to use in the future (Fredrickson, 2010). For instance, Estrada, Isen, &Young (1997) found that doctors who were primed for positive emotions (using a small bag of candy) integrated information better and were more likely to avoid anchoring. As a result, those in the positive mood condition made faster and more accurate diagnosis. Schmitz, DeRosa & Anderson (2009) found that those induced with positive moods processed all the visual images including background information. In contrast, those induced with negative moods did not process all the images and all the background information. Gallagher (2009) reported, eye tracking experiments show that positive emotions expanded peripheral vision. Organizational Implications Work by Cameron, Dutton and Quinn (2003) has suggested that positive psychology has five major impacts on organization behavior. These can be summarized as psychological capital, flow, motivation, well-being, and wisdom. Psychological capital incorporates a number of attitudinal dimensions such as hope, optimism, resiliency and confidence. These dimensions have been shown to relate significantly to key desirable organizational outcomes such as organizational citizenship behaviors, team support and productivity and the behaviors exhibited by the CEO. Specifically CEOs with positive psychological traits were seen as transformational, and this was linked to superior performance by their companies (Peterson, et.al. 2008). Csikszentmihalyi (1997, 1999, and 2003) identified flow as a key component of work satisfaction. Workers are in “flow” when they are fully absorbed in the job, working to their full potential to meet a challenge. Although the motivation dimension of positive psychology has been well researched, what is noteworthy is that beyond a certain level to sustain comfortable existence, money does not act as a motivator for individual workers (Seligman, 2002). At this point, what motivates is the sense of flow and having the opportunity to do something that the worker is really good at. Positive psychologists suggest that training and development should not be focused on improving the individual’s weaknesses, but instead on developing his or her strengths, so that he or she can make a unique contribution to the achievement of goals (Buckingham & Coffman, 1999). Gino and Pisano (2011) point out that focusing on strengths rather than weaknesses can have a significant effect on organizational learning, but is difficult to do. We are used to focusing on trying to understand what went wrong, but are not used to trying to work out what went right when something goes really well. They suggest that the systematic reviews of successful projects should be as searching as those for failure, including experimenting to find new levels of achieving high performance. This is consistent with scholars in the field of learning organization (e.g., Garvin, Edmondson, and Gino, 2008). Greenhaus and Powell (2006) noted that the well-being of workers is significantly improved in positive organizational cultures and leads to improved quality of life not only at work but also at home. They move the debate on work-family balance to work family enrichment in which positive experiences at work and at home have a feedback effect in raising happiness in both domains. Very early in the history of positive psychology Seligman and Csikszentmihalyi (2001) suggested that positive psychology leads to greater wisdom. Here wisdom is defined as being able to cope with life and deal with uncertainty, by
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acquiring both factual and procedural knowledge about life. If we see wisdom as the pinnacle of capturing, transferring and sharing organizational learning then we can see the significant impact that positive psychology can have on creating organizations that can create new organizational processes to cope with changing business environments. How Do Companies Cultivate Positive Work Environments? Smart software companies such as Google, SAS institute, and online store Zappos create environments that give employees small burst of happiness to prime their creativity and innovation. Southwest Airline and Virgin create a fun environment to work. For instance, SAS Institute creates many cost effective benefits that have great values for employees. For instance, they organize car washes, and laundry services at their premise to create greater convenience for employees. They have child care on premises that is sited next to the canteen so that parents can have lunch with their children. SAS has large sport facilities and have organized events to encourage employees to be physically active and keep healthy. As a result, SAS Institute leads in statistical analysis software including business analytics and has a significant lower employee turnover compared to the industry. This lower turnover, according to Jeffery Peffer at Standford University, in a television interview, is the sustainable competitive advantage that SAS Institute built for itself. It is able to develop talents and wellbeing and at the same time retain the talents and therefore protect their investment in human capital. Positive emotions can be induced with small and simple things. For instance, in the Estrada, Isen, and Young (1997) study, positive emotions were primed with a small bag of candy. The study also suggests that small doses of positivity can have large productive effects. In the study, small doses of happiness made the doctors twice as effective, twice as fast, and twice as creative. Keller et.al (2005) found that 20 minutes outdoors per day in good weather increased positive emotions as well as broadened thinking and improved working memory. SAS Institute’s encouragement of exercise is consistent with research findings on severe depression. Forty-five minutes of exercise three times weekly was as effective as taking antidepressants. However, those in the antidepressant group had a thirty-eight percent relapse rate while those in the exercise treatment group had only a nine percent relapse rate at ten months (Babyak et. al., 2000). Thus, short periods of exercise improve emotions and have a long lasting effect moods and mental wellbeing. Van Boven and Gilovich (2003) found that positive emotions we got from things were fleeting while positive feelings experienced with other people were more meaningful and last longer. Dunn, Aknin, & Norton (2008) found that individuals who spent money on others were happier than those who spent money on themselves. Consequently, Achor (2010) suggests that organizations invest in creating opportunities for prosocial experiences. When individuals use their strength of character or “signature strength” daily, they become happier and less depressed. In addition, the levels of happiness remain elevated when measured six months later (Seligman et. al., 2005). Furthermore, studies have shown that the more you use your signature strengths in everyday life, the happier you become (Achor, 2010). The implication for organizations and their leaders is to have policies that allow employees to exercise their signature strengths daily. Daniel Goleman (2006) argues that mirror neurons in the brain are responsible for empathy (Gallese, 2001; Preston & de Waal, 2002), and that it is reasonable to expect emotions that we observe flow through us. He argues that this neurological process is the basis of social skills. Thus, if this hypothesis is true, positive or negative emotions of an individual or a group of individuals have the potential to spread across all those they contact. Based on the research by Greenberg & Arakawa (2007), Achor (2010) argues that leaders and people in position of authority have a great impact on the emotions of employees because they determine policy, shape the workplace culture, are the role models, and interact with more people over the course of the day. However, it is counter intuitive to their thoughts and actions that happiness leads to productivity. Instead, most managers are task oriented without adequate thought to the emotional side of the equation. He argues that this task orientation may actually be misguided and counterproductive. Instead organizations should consider sponsorship of activities that induce positive emotions such as time off for exercise, mediation, and volunteer work. The positive and productive environment is one where employees experience many incidents of positive emotions. He suggests that the return on investment may be significant. For instance, Coors Brewing Company reported a $6.16 return in profitability for every $1 spent on its corporate fitness program. Toyota increased productivity at one of its US parts center when it instituted training in using each individual’s signature strength (Connelly, 2002).
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Leadership with Positive Psychology
Encourage employees to use their signature strengths. Leaders and organizational policies should encourage employees to use their signature strengths more frequently and to find new ways to use their signature strengths. This exercise allows employees to feel authentic and identify with their actions. It gives them a sense of excitement to use their strength. New behaviors using signature strengths have a more rapid learning curve and greater chance of success (Seligman, 2011). This results in the feeling of accomplishment. It is intrinsically motivating to use one’s own strength, with a strong sense of self-efficacy. For instance, Google has a 70-20-10 policy on work. According to Google’s CEO Eric Schmidt, “70 percent of their resources are channeled to the core business of internet search and advertising, and 20 percent is channeled to adjacent products such as desktop and product search services. The remaining 10 percent is focused on highly experimental products - innovations important for the long term” (Because we think, 2007). Laszlo Bock, Senior Vice President of Google’s People Operations, tells Forbes (2013): “We try to have as many channels for expression as we can, recognizing that different people, and different ideas, will percolate up in different ways.” Google allocates time and resources so that individuals can make use of their strengths to create innovative products and services for the company. Encourage people to talk about positive events often. Gable et. al. (2004). Found that when individuals communicate, they experience positive events; it increases his or her positive emotions and well-being. In addition, when the listener responds “actively and constructively”, it further increases both the positive emotions and well-being. These benefits do not just rest at the individual level; “active constructive responding” builds more positive inter-personal relationships. So what is “active constructive responding”? Active, constructive responding is listening and showing interest and enthusiasm for the positive event. Organizations should encourage everyone to spend some time daily, celebrate positive events by encouraging individual to talk about their successes. Listeners should be curious, sincere, and ask detailed questions about the positive event. This allows the teller to re-live that positive event. From a practical perspective, some companies use appreciative inquiry (Cooperrider, Whitney, & Stavros (2007) in their everyday review. For instance, service staff and sale people could at the beginning of each day share best practices of successful resolution of a challenge they experienced during the previous day. During the review, listeners ask questions to bring out the details of how the person handled the situation. Besides the positive emotions, well-being, and relationship benefits, this process also encourages the sharing of best practices. It is a process that identifies what went well, how it is done, and then disseminates the practice throughout the team. Furthermore, knowing that peers have done it and that peers will help you gain mastery encourages the application of new knowledge. Such a process need not consume a lot of time; for instance, teams can get together during breaks to discuss best practices and to talk about what they will try and how the team might help them master their challenges. Encourage employees to identify three things that went well daily. Seligman (2011) suggests that depression is about ten times more common than fifty years ago and that this is not an artifact of greater awareness of depression. Furthermore, the average age of first onset has declined from about thirty to below fifteen. The paradox is that this is happening despite the fact that the standard of living has improved over the fifty years. With more incidents of depression occurring, Seligman suggests that there is a real need to intervene in order to enhance well-being and learning, because positive moods produce broader attention, more thinking, and more holistic thinking. Bad moods at best narrow thinking and induce pessimism. Bad moods at worst induce defensiveness, rote following of order, and repeating strategies that are known not to work (Seligman, 2011; Staw, Sundelands, & Dutton, 1981). This is clearly a set of behaviors that is not a hallmark of a learning organization. One of the most effective counters to depression is, what is often called, the “three blessings” exercise. The protocol of this intervention was to spend ten minutes a day to write three things that went well, and why they went well (Answers the question: “Why did it happen?”). The three things need only be small things. In the study by Seligman and his colleagues (2005), the elevation of happiness and reduction of depression was similar to the signature strengths exercise. The beneficial effects were present after six months, and this was because the subject continued the exercises, even when they were not required to. In other words, this exercise has good likelihood that it will become a life-practice when we institute the intervention. Create ripples of positive emotions and best practices. Barsade (2002) found that positive emotions influenced the moods of team-mates – positive emotions led others to feel positive and vice versa. In addition, “contagion positive emotions” (emotions derived from the emotion of others) reduced the other person’s likelihood to engage in conflict, while increasing task performance, and cooperativeness. Clearly, it is useful for leaders not only to encourage positive emotions, but also to find ways of increasing the ripple effects. For instance, Chip Conley, the CEO of a chain of boutique hotels
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would, at the end of each meeting, have a person talk for one minute about someone who deserves recognition. This person to be recognized could be any one employee in the company. After which, a different executive would volunteer to visit or email to tell the person how great a job he or she is doing (Conley, 2007). One Danish company created “The Order of the Elephant” where employees can recognize fellow employees for doing something exemplary (Kjerulf, 2014). This award is simply a sixty-centimeter stuff toy elephant. What do these interventions do? Firstly, it creates positive emotions in the receiver of the award, but at the same time it also creates positive emotions in the recommender and the giver of the award. Secondly, it creates a contagion of emotions when other employees see these as very personal as opposed to official ceremonious events. Thirdly, other employees may, upon seeing the conspicuous stuffed toy, enquire about what the person did to get the elephant. This gives the opportunity for employees to share their best practices, as well as to re-live positive events. Thus, best practices as well as positivity spreads like a ripple across the workplace. One of the barriers is that conventional management wisdom uses rewards for high performance. In contrast, research in positive psychology suggest that small frequent positive boost drives high performance. This is a small but significant mindset change that leaders must embrace. They must think in terms of using small token, positive interactions, and the re-living of positive events, not as rewards, but as means for driving performance. Encourage employees, especially leaders, to communicate positively. Today, much of the communications occur on email, even to colleagues that are sitting a few meters away. We argue that organizations should encourage face-to-face communications or at least voice conversations. Emails do not have the contextual cues of tone, pitch, and facial expressions, thus they are notorious for miscommunications. Furthermore, using emails forgoes the opportunity to create positive emotions between colleagues that leads to less conflict and greater cooperation and task performance (Barsade, 2002). To avoid the contagion of negative emotions, the culture should encourage warm and enthusiastic verbal behaviors including optimistic frames and positive facial expressions, and cordial tone and pitch. Achor (2010) suggests that if we want to have a better team performance, we should be encouraged to be more self-aware of how we communicate and to put in “genuine effort to avoid slipping into an apathetic or irritable tone.” Even in a military, where conventional wisdom suggests that leaders have to be authoritarian to succeed, Bachman (1988), found that naval units who won awards for efficiency and effectiveness had commanders who were openly encouraging. In contrast, units that were rated poorly had commanders who were negative, controlling, and aloof. Create a positive culture of PERMA. One exemplary case is that of Captain Micheal Abrashoff who turned around the USS Benfold from the worst ship in the navy to one of the best by focusing on a dialogue that emphasized listening, seeing things from the perspective of the followers, encouraged and implemented ideas that changed the navy’s standard operating procedures. He found ways to help his followers fulfill their ambitions and aspirations. For instance, to cater for their aspiration to go to college, he found ways to eliminate work, conducted lessons, and arranged for college entrance standardized tests to be conducted on board USS Benfold. He told the followers that he was not their boss, but the mission was their boss. What did all these do in terms of positive psychology? It created more positive emotions, greater engagement, greater meaning in their work and life, respectful positive relationships, and finally, he gave them a sense that achievement is possible. Focus on improving self-efficacy instead of just improving competence. Self-efficacy (Bandura, 1977) is a person’s belief in his or her own ability to complete a task. It is a very important variable that predicts task and learning performances. In every research study on performance or learning, self-efficacy is measured and controlled for. However, in organizations we often focus on building competence while ignoring this very important predictor. Basically, when a person feels confident in their ability to do the job, they are more committed to doing it well. We have all seen situations where we know the person is competent and yet is not confident and consequently underperforms. Leaders, through positivity, can create an environment that fosters a “can do” optimistic attitude. One of the keys is the belief that people hold of themselves. When people believe their ability is fixed or unchangeable, they stop trying. If they believe that they can learn and grow, they keep trying. Positivity helps build the optimism that we can grow while negativity does the opposite. Increase the positive to negative emotional ratio. What is the ratio of positive to negative experiences? What does it take to start to flourish? This was previously thought to be three, but as of today the ratio is yet to be established beyond doubt. Nonetheless, Barbara Fredrickson says that a high ratio of positivity to negativity is required to flourish. Thus, leaders should bear this in mind. Firstly, monitor whether they themselves create communications and events that increase
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the ratio. Try to monitor this ratio as experienced by their followers. The monitoring device could be as simple as having periodic short coaching conversations about the follower’s subjective estimates of their positivity to negativity. When we improve positivity, it automatically reduces negativity. Thus, positivity has a double-effect; it increases the numerator, while at the same time reducing the denominator. We can increase the ratio further by reducing negativity. One of the common errors in thinking that creates much negativity is “the sky is falling” thinking or catastrophic thinking. Catastrophic thinking is repeatedly pondering about worst-case outcomes, especially when something goes wrong. However, the worst-case scenario usually has a low probability of occurring, yet often in our minds, we assign it with a very high probability. This is a conservative and biased estimate of reality. Leaders can help dispute such a biased view of the situation. For instance, ask them to estimate the likelihood of various scenarios unfolding. This helps them make more realistic estimates of the situation. Leaders can keep calm and be the anchor in a storm. Another common source of negativity is regret. We can be consumed by regrets to such an extent that we remain paralyzed. When leaders chide followers for mistakes, they increase the negativities of regret, fear, unfairness or even anger. Instead leaders can encourage followers to focus on the present and find solutions to ratify the situation. This is a much more positive and functional response than to dwell on the past that cannot be changed, or fear the worst, which merely delays action. What is most effective is to focus on effectively dealing with the situation at the present. Only by managing the present can the outcomes of the future change. Blaming, chiding, poking fun, criticism, sarcasm, and other hurtful speeches and behaviors introduce unnecessary negativity. These should be discouraged in favor of speaking in a constructive and respectful tone of voice. It is natural for us to blame the person when a bad event arises. This is again caused by a bias called fundamental attribution error. Observers of the event believe that people caused it, but the actors in that event see the cause as an uncontrollable situation. Yes, in part it is a defensive response, but there is more to it. Actors, given their state of knowledge, skill, and state of mind often try their best given the situation; therefore, they reason that it cannot be their fault. Meanwhile, onlookers just see the result but not the effort, and the limitations at hand. Therefore, their conclusions are based on partial information. Furthermore, from human perception point of view, humans are more prominent than the background situation, so observers are more ready to assign blame to them. There are also two more beliefs that drive observers to blame actors. The first is the belief that humans are in control, and thus they reason that bad events can be controlled and if they cannot, it must be the fault of some human being. The second belief is that the world is just: good things happen to good people, and bad things happen to bad people. Thus, when bad event occurs, the person in charge must be bad. If we succumb to our human biases, we cause a feeling of injustice and thus introduce unnecessary and strong negative emotions. Leaders can be aware of these biases, and in turn remind others to be aware of these biases, while at the same time encourage everyone to constructively focus on the present to ratify the situation, and also find ways to prevent it from happening again. This approach would bring the organization closer to a learning organization. Focus on finding opportunities in every situation especially in adversity. Our human psychology allows us to find what we are looking for and misses what we are not looking for (Simon & Chabris, 1999). In their famous experiment, participants were asked to watch a video and to count how many times a basketball was passed in a crowd. Unknown to the participants, in the midst of the video was a man dressed in a gorilla suit walking across the crowd making funny faces. When asked after the video, if they saw the gorilla, approximately half of the participants did not recall seeing the gorilla. Selective attention, of course, allows us to focus and disregard distractions. However, in organizations we often focus on mistakes instead of opportunities. In an economy of optimization, this is indeed an appropriate strategy. However, in today’s business environment where accelerated change is the norm, the viability of a business may depend on finding innovative opportunities. So, leaders should probably refocus employees’ selective attention. Instead of priming them to look for mistakes, start to prime them more often to look for opportunities. Positivity may also improve opportunity recognition. Wiseman (2003), asked the question: why some people seem luckier while others seem unlucky. Wiseman asked volunteers to read through a newspaper and count how many photographs were in there. Those who thought themselves lucky were more likely to complete the task in seconds, because in the second page was a very large message that read: “Stop counting, there are 43 photos.” Those who were unlucky were more likely miss the message, possibly their pessimism resulted in missing opportunities. This is possibly the result of the self-fulfilling prophesy phenomenon. It appears that our brain, like our body, changes according to what we demand it to do. This is called neuroplasticity. Thus, the more you practice looking for opportunities, the more likely your brain will change to fulfill that demand. Moreover, techniques that induce positivity such as the “three-blessing exercise” not only increase positive
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emotions but it also increases optimism. Having an organization where members feeling optimistic makes us open to new ideas and opportunities. During adversity, the optimism manifests as resilience, and as creative problem solving. Positive Psychology as a Precursor to Developing a Learning Organization Characteristics of a Learning Organization Peter Senge created the concept of the Learning Organization (L.O.) in 1990. He argues that if organizations were to keep ahead of the competition, they have to change and adapt to a changing business environment. It was thus necessary to create a culture in which (it) the organization evolved by identifying and testing new ways of changing to deal with the uncertain business environment. There were five key dimensions that define whether an organization could be considered an L.O. or not. The extent to which an organization demonstrates these key dimensions determines whether it has truly embraced the philosophy of an L.O., so they can be seen to define the “ideal” L.O. The five dimensions include personal mastery by employees through staff training and development, and continuous self-development. Personal mastery is the desire by employees to develop themselves to the peak of achievement in their particular discipline. It is important that the motivation for this development comes from the individual, and that this becomes en-cultured so that learning is part and parcel of everyday life, Mental models are the assumptions held by individuals and are en-cultured into the organization’s norms and values. In in order to become a learning organization these models must be challenged and changed. To do so the L.O. must create a climate that promotes inquiry and trust. Employees must feel comfortable questioning even senior executives about what is going on, and suggesting alternative ideas. This is a change towards a more open culture in which old dysfunctional ideas can be challenged. This is the learning environment that will encourage continuous changes and developments as the organization progresses. Shared vision is important in motivating the staff to learn, as it creates a common sense of purpose and gives a focus for learning. This shared vision should incorporate the individual visions at all levels of the organization. The shared vision is a way of aligning the activities of employees to keep ahead of the competition. Furthermore, the vision should be longterm inclusive goals, that is, the vision and goals should also include the long term interest of all stakeholders and not just the shareholders. This allows stakeholders to identify with the organization. Thus, L.O.s are able to have decentralized and flat hierarchical structures, because employees and stakeholders work together for mutual benefit. In contrast, in traditional organizations with hierarchical structures, the vision is something that is imposed by a higher management, unless there is a great deal of efforts convincing members; the vision is often not shared by a significant portion its members. As a result, a catch-22 situation arises: the vision is not shared and members are not aligned, resulting in a need to enforce control, which results in dependency on superiors to make decisions, which in turn limits the ability to respond appropriately to a changing and uncertain environment. Team learning is the result of the individual learning, but goes further. Team learning suggests that when individuals successfully resolve issues, that knowledge is quickly shared across relevant parts of the organization, and once shared, the receiving team or individual quickly implements the solution. A culture that is created in team learning allows staff to learn more quickly and improves the problem solving capacity of the whole organization. Learning organizations have systems and cultures that enable more efficient learning, such as debates and discussions, which help members and which creates open discussion and the creation of shared meaning. System thinking. Central to the idea of Learning Organizations (the Fifth Discipline) are the ideas from system thinking. System thinking concentrates on looking at organizations as a system of related parts and understanding the relations between the parts. Learning organizations look at the totality of the organization and make sure that the various parts are integrated to form a meaningful whole. The notion of system thinking often runs counter to conventional management wisdom of setting invariable key performance indicators (KPI) for sub-units. System thinking suggests that employees must be able to act beyond the set KPI, and bring about actions that may sacrifice sub-unit goals for the achievement of the system performance. Systems thinking suggests that all of the above characteristics must be present if the organization is truly to be called a learning organization. The process by which an organization transforms itself into a learning organization might show that these characteristics are slowly acquired, rather than a complete and immediate transformation into an L.O. (O Keefe, 2002)
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Transiting to a Learning Organization Changing a traditional organization into an L.O. is not easy. In fact, Kerka (1995) has suggested that despite all of the efforts to build L.Os over the past few years there are very few examples of organizations that fully demonstrate all of the characteristics of an L.O. Some of the reasons for this apparent lack of success derive from the nature of the L.O. concept itself. Many organizations are cautious about the personal mastery element, thinking that it might lead to fragmentation by allowing individual employees to set their own objectives without aligning to corporate goals. However, Senge (1990) does highlight the importance of the shared vision, which should be the aligning process. One precursor to the whole process of developing an L.O. is the creation of a learning culture; if this is not achieved then progress can be stymied. Resistance to the whole process can be exacerbated by the normal fears that employees have about losing out as a result of the change. A similar resistance might develop because employees are reluctant to expose and review their current mental models in order to change. There is also the problem that the whole process might be resisted by managers who share a traditional mindset about their roles and what they consider to be appropriate reporting relationships in the business. A further problem is that knowledge sharing in large organizations is more difficult than in smaller organizations, so the information and shared learning does not get to the people who need it most. Senge (1966) recognized some of these challenges. For example, organizations might not have enough time to make these transitions. Kotter (1996) pointed out that changes in organizations culture can take up to eight years to be achieved. Senior managers are impatient to see the benefits of the L.O. culture but do not invest sufficient time into managing the change process. A further problem is that the change to an L.O. culture does not address the immediate problems that an organization is facing, so that in terms of its impact its relevance might be questioned Perhaps one key criticism of Senge’s work is that he does not outline a clear change process to bring about the transition to an L.O. It is as if he identifies a clear end point or goals for an L.O., but not a clear path on how to get there. It is true that Senge and colleagues (1994) have identified a number of positive examples of organizations that have developed particular disciplines of an L.O. in a field book of L.O. practice. But the examples presented show ways in which organizations have improved on individual disciplines, not making a transition to reflect the values of a complete L.O. The changes proposed, the exercises, the strategies and tactics of developing each discipline, present a very rational approach to the problem of bringing the change about. But this might indicate a weakness. The approach is a very rational one, but ignores the affective dimension of change. Kotter and Cohen (2002) have shown that in order to get the engagement and commitment of employees to the change, the change agent has to address the feelings of those involved. Perhaps if Senge was to consider more about managing the dynamics of the change process to get a greater engagement of those involved, we might have more examples of organizations that have fully transited to embrace all of the disciplines of an L.O. Positive Psychology as a Pre-cursor So how might Positive Psychology assist in the process of creating an L.O.? Well in developing the “psychological capital” of the employees, positive psychology creates a culture in which a change becomes feasible. In a sense it creates the essential precursor to the kinds of change that L.O. is trying to bring about. It builds employees sense of optimism, confidence and hope about the organization and their role in it. In simple terms it raises the self- efficacy of the workers, their feelings that change is possible and that they are ready for it (Bandura, 1977). This essential groundwork seems to be missing from Senge’s consideration of how the change can be brought about. It also touches on resiliency, which is the ability to bounce back from problems or hardship. The introduction of change will lead to disruptions to people’s lives, resilience is the capability to cope with those disruptions without being disabled by them. “Flow” is clearly related to personal mastery in the L.O. framework, and again is about the employee concentrating on what they do really well so that they feel increasingly confident and capable in the work they do. Now this concentration on “being the best you can” does not overcome the problem of employees pursuing their own interest at the expense of the organization. But the development of “wisdom” with an emphasis on developing an awareness of what needs to be done, and the capability to do that might mean that employees self – align to the needs of other employees and the organization as a whole. “Wisdom” also probably creates an early awareness of the need for system thinking, so that the employees can understand the need to see the organization as a whole and not just an assembly of parts. Team learning is not specifically addressed in positive psychology, but many of the findings on the development of psychological capital show that there is increased organizational citizenship behavior and team support, not an exact parallel but close enough to see that employees treated in a positive way are likely to become better team players. One other aspect of positive psychology that could be influential is
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the emphasis on the “wellness” of employees, put simply “happiness”. This also contributes to the morale of the employees about to undertake a major change. Where does this leave us? Our contention is that Senge and other writes on L.O. have identified an ideal set characteristics of an L.O., but the achievement of these characteristics is far from straightforward. We argue that if you are looking at the conditions that you need to create in order to implement the changes required in transiting to an L.O., then positive psychology has much to commend. By starting your change with a change to a more positive culture you will have increased the morale and sense of self-efficacy and empowerment amongst employees, they will have an embracing wisdom about the needs and direction of the organization, and they will show better organizational commitment, citizenship, and team working. Once these changes in the culture have been achieved to switch to an L.O, culture should become much easier, and with fewer problems that heretofore. Of course this means that there is another layer of change that has to be implemented before the ideals of the L.O that can be achieved, but we might look at these as setting the foundations for building this desired culture. References Abrashoff, D. M. (2002). It's your ship: Management techniques from the best damn ship in the navy. New York: Warner Books. Achor, S. (2010). The happiness advantage: Seven principles of positive psychology that fuel success and performance at work. New York: Crown Publishing Group. Babyak, M., Blumenthal, J., Herman, S., Khatri, P., Doraiswamy, P., Moore, K., Craighead, W., Balewicz, T., & Krishnan, K. (2000). Exercise treatment for major depression: Maintenance of therapeutic benefit at ten months. Psychosomatic Medicine, 62, 633-638. Bachman, W. (1988). Nice guys finish first: A SYMLOG analysis of U.S. Naval commands. In R. B. Polley (Ed.), The SYMLOG practitioner: Applications of small group research. New York: Praeger. Bandura, A. (1977). Self-efficacy: Toward a Unifying Theory of Behavioral Change, Psychological Review, 84 (2), 191-215 Barsade, S.G. (2002). The Ripple Effect: Emotional Contagion and Its Influence on Group Behavior. Administrative Science Quarterly, 47 (4), pp. 644675. Because we think (2007). http://becausewethink.blogspot.sg/2007/09/googles-70-20-10-formula.html Cohen, S., Doyle, W.J., Turner. R.B., Alper, C.M., & Skoner, D.P. (2003). Emotional style and susceptibility to the common cold. Psychosomatic Medicine, 65, 652-657. Conley, J. (2007). Peak: How great companies get their mojo from Maslow. New York: Jossey-Bass. Connelly, J. (2002). All together now. Gallup Management Journal, 2, 12-18. Cooperrider, L., Whitney, D., & Stavros, J.M. (2008). Appreciative inquiry handbook: For leaders of change. 2nd edition. California: Berrett-Koehler Publishers Kotter, J.P. (1996). Leading Change. : Massachusetts: Harvard Business School Press. Kotter, J.P. & Cohen, D. (2002). The heart of change: Real-life stories of how people change their organizations. Massachusetts: Harvard Business School Publishing. Diener, E., Nickerson, C., Lucas, R.E., Sandvik, E. (2002). Dispositional affect and job outcomes. Social Indicators Research, 229-259. Dunn, E., Aknin, L.B., & Norton, M.I. (2008). Spending money on others promotes happiness. Science, 319, 1697-1688. Dweck, C. (2000). Self-theories: Their role in motivation, personality, and development. Philadelphia: Psychology Press. Estrada, C.A., Isen, A.M., & Young, M.J. (1997). Positive affect facilitates integration of information and decreases anchoring in reasoning among physicians. Organizational Behavior and Human Decision Processes, 72. 117-135. Forbes (2013). http://www.forbes.com/sites/laurahe/2013/03/29/googles-secrets-of-innovation-empowering-its-employees/ Fredrickson, B.L. (2010). Positivity: Groundbreaking research to release your inner optimist and thrive. U.K: Oneworld Publications. Fredrickson, B.L., & Branigan, C. (2005). Positive emotional broaden the scope of attention and thought-action repertoires. Cognition and Emotions, 19, 313-332. Gable, E. L., Reis, H. T., Impett, E. A., & Asher, E. R. (2004). What do you do when things go right? The intrapersonal and interpersonal benefits of sharing positive events. Journal of Personality and Social Psychology, 87 (2), 228–245. Gallagher, W. (2009). Rapt: Attention and the focused life. New York: Penguin. Gallese, V. (2001). The “Shared Manifold” hypothesis: from mirror neurons to empathy. Journal of Consciousness Studies, 8, 33–50. Goleman, D. (2006) Social intelligence: The new science of human relations. New York: Bantam Dell. Greenberg, M.H., & Arakawa, D. (2007). Optimistic managers and their influence on productivity and employee engagement in a technology organization. International Coaching Psychology Review, 2 (1), 78-89. Huppert, F.A., & So, T.C. (2009). What percentage of people in Europe are flourishing and what characterises them? Well-Being Institute, University of Cambridge. Prepared for the OECD/ISQOLS meeting “Measuring subjective well-being: an opportunity for NSOs?” Florence - July 23/24 Keller, M.C., Fredrickson, B.L., Ybarra, O., Côté, S., Johnson, K., Mikels, J., Conway, A., Wager, T. (2005). A warm heart and a clear head: The contingent effect of mood and weather on cognition. Psychological Science, 16, 724-731. Kjerulf, A. (2014). Happy hours is 9 to 5. U.K: Pine Tribe Ltd. Lyubomirsky,S., King, L., & Diener, E. (2005). The benefits of frequent positive affect: Does happiness lead to success? Psychological Bulletin, 131, 803-855. Preston S. D., de Waal, F.B.M. (2002). Empathy: Its ultimate and proximate bases. Behavioral and Brain Sciences, 25, 1–72 Sange P.M. (1990). The Fifth Discipline: The art and practice of the learning organization. New York: Doubleday.
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Riding Pattern Analysis of Taxi Passengers (A Case Study of a Korean Taxi Company) Fransiskus Tatas Dwi Atmaji a,b, Kwon Young Sig b* a
Industrial Engineering Department, Industrial and Systems Engineering School, Telkom University , Jl.Telekomunikasi Terusan Buah Batu, Bandung, West Java, Indonesia 40257 b Information System Laboratory (ISL), Industrial and Systems Engineering Department, Engineering School, Dongguk University, Pil-dong, Jung-gu, Seoul, 100-715, Republic of Korea
Abstract In an urban area, including Seoul city, many people prefer to use taxi as one of the choices for fast, convenient and flexible transportation. Based on the data provided by one of the taxi service call companies, X, in Korea, this paper proposes a taxi passenger riding pattern analysis at Seoul city, Republic of Korea. Using a multidimensional analysis method, we analyze the data to obtain an area with high potential demands of taxi passengers, which we call “hotspot” area. The results show that “Teheran Valley” in Gangnam-gu and Dongdaemun market in Jung-gu and Jongno-gu had the biggest number of passengers compared to other areas. This information will be useful for the company to re-evaluate its current taxi fleet management, especially for the taxi's drivers in minimizing their idle time when searching for customers.
© 2014 Fransiskus Tatas Dwi Atmaji, Kwon Young Sig. Published by Telkom Pub. Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia. Keywords: GPS coordinates, multidimensional analysis, riding pattern analysis, hotspot area
1. Introduction In daily life, many people prefer to use taxi as one choice of fast, convenient and flexible transportation. In an urban area like Seoul city, taxi also becomes the favorite choice for traveling. With the technology development and modernization, nowadays almost every taxi is equipped with a Global Positioning System (GPS) which can be used in the taxi’s operating system, especially to manage the navigation problem. Using this technology the correct location can be acquired in time especially for novice taxi drivers with no previous experience. Significant locations and predicted movements across multiple users using GPS hardware were investigated to collect the location dataset which automatically clusters GPS data into meaningful locations at multiple scales [1]. Even though equipped with the GPS system, there are other problems faced by taxi drivers. Typically, the taxi drivers search for their customers based on their intuition and experience only, go to a crowded area where customers may be available besides relying on taxi calling service, which means they come to a specific place ordered by a customer via telephone call. As a result, sometimes they still have ineffective time with absence of passengers for a long time and just waste their time and energy to search the passenger. As reported in a Taipei urban area, about 60-73 % of their operation hours, taxi drivers were driving without passengers [2]. Also, at Jeju Island, Korea, many taxi drivers reported that about 80 % of their activity was carrying no passengers [3].
* Corresponding author. Tel.: +02-2260-3375 E-mail address: [email protected]
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To minimize the problem above, the main objective of this research is analyzing the taxi passenger riding behavior, especially in Seoul City, in order to obtain valuable information from the huge number of taxi databases. Using the multidimensional analysis method, the variables time, location, and frequency will be analyzed. The proper information of taxi passenger riding behavior is one of the important aspects in a taxi business area because, according to the Seoul Statistical Year Book, around 6.5 % people in Seoul use taxi as their transportation mode [4]. 2. Data and methodology
2.1.
Data and research framework
Data for this research were provided by one of the taxi companies in Korea, which is defined later as Company X. The 400.000 raw data used for the analysis are those of a 24-hour taxi service.
Y/M/D
Taxi ID
20101003 20101004 20101006
1035922307 1037912431 1047802409
Get ON time 10:59:09 22:58:00 13:35:31
Table.1. the Example Data GPS GPS Get OFF latitude longitude time (GET ON) (GET ON) 11:45:30 127.056959 37.591416 23:15:09 127.050851 37.504816 14:01:39 127.07382 37.546922
GPS longitude (GET OFF)
GPS latitude (GET OFF)
127.09276 126.974691 126.900754
37.613859 37.519674 37.530143
The example of processed data is shown in Table 1. The data consist of date (year, month, and day), taxi ID, time (get on and get off time), and GPS coordinates (get on and get off latitude and longitude coordinates). In this paper we use term of “Get on” and “Get off” as a pick-up and drop-off of taxi passengers respectively.
Fig. 1. General Research Framework
As is depicted in Fig.1, raw data from the taxi company database will be processed using multidimensional analysis to find the information about the passenger riding pattern. Pre-processing data is needed in order to prepare the raw data from the company into proper data for further analysis. The raw data from the company cannot be directly used for this analysis because it used ORACLE format databases which different from our analysis platform. Using an additional calculation formula, data can be read and transformed into our data analysis platform. This research is limited only in the Seoul city area. According to the geographic condition and administration, Seoul area comprises around 605.25 km², with a radius of approximately 15 km from the north to the south, roughly halves by the Han River; it consists of 25 districts (-gu) and 522 sub-districts (-dong). In this research, we used four (4) time span allocations to identify the distribution of taxi passengers by dividing the 24 hours into 4 time spans:
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(1) (2) (3) (4)
Morning time (07.00-10.00 am) Afternoon time (10.00 am-18.00 pm ) Night time (18.00-24.00 pm) Late night/early morning (00.00-07.00 am).
2.2. Pre-processing data The most important thing for pre-processing the data in this research is converting the GPS coordinates data into a location or address. GPS coordinates consist of Latitude and Longitude coordinates. Latitude is the angular distance of the North or South locations of the Equator and usually denoted by the Greek letter phi (φ). Longitude is the angular distance of a point's meridian from the Prime (Greenwich) Meridian and denoted by lambda (λ). The latitude and longitude in general are used for a geographic coordinate system to specify any location on the globe1. In this research, The Delphi Geo-code software is used to convert the GPS latitude and longitude coordinates into the location. This software program is connected with a Google location database which automatically searches the location. In this case the result of the location is in Korean character (Hangeul) This software can search the address in details, including the district and the sub district area (-gu ) and (–dong), for example : 대한민국 서울특별시 강남구 대치 4 동 89). The results of Delphi Geo-code software are in a Shape file (.shp, .shx and .dbf) format, and using the DBF Viewer Plus software, the Shape file is converted into a more general format for the analysis.
2.3. Multidimensional Analysis A multidimensional analysis is a data analysis process that groups data into two or more categories of data dimension and measurement. After the process of analyzing the data, the result of this research will help the company to optimize and increase their taxi driver working performance, for example: to re-evaluate their current taxi fleet management. The better the understanding of the passenger behavior, the higher the company’s profit earned. In this research the variables used for the multidimensional analysis method are time, location, and frequency, as shown in Figure 2. By this analysis, we will get the detailed information about not only where, when, and how many taxis passengers are distributed but also how long they ride the taxi.
Fig.2. Three variables for experiment
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Using the SAS Enterprise Guide 4.3 as the analysis tool, the variable location, frequency and time data can be separated and grouped. From the multidimensional analysis we can obtain some information that will be useful for the company to optimize their fleet management and increase the company profit, for example: distribution of taxi passenger, passenger riding behavior and other information.
3. Experiment Results
3.1. General taxi passengers distribution
Fig. 3. General taxi passengers distribution
In As shown in Figure 3, out of 400.000 raw data, 93 % of the passengers (37.2357 passengers) ride taxi from Seoul city area, especially in Gangnam-gu, which has the highest frequency of passengers, compared to other districts. The remaining 7 % get on at outside of Seoul city or in the nearby city, for example: Incheon City or Gyonggi province. It is noted that the analysis focuses on the get on distribution of passengers only. The get on passenger information give the information to determine the target area (hotspot) where many passengers probably need the taxi service.
3.2. Inside, adjacent and remains area analysis The “adjacent” district is defined as the district bordering or nearby the main district analyzed. By using this adjacent district analysis, we obtained the information about the taxi passenger riding behavior across other district areas. Figure 4 shows the example of the adjacent area. From this figure, it is shown that Jung-gu (fixed line) has 6 adjacent areas. The adjacent areas (dotted) are: Jongno-gu, Dongdaemun-gu, Seongdong-gu, Yongsan-gu, Mapo-gu and Seodamun-gu. The areas not included in the adjacent districts will be called the ‘remains’ area.
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Fig. 4. The illustrations of inside and adjacent areas in Seoul City Table 2. Jung-gu taxi passenger riding behavior Percentages (%) 14. Jung-gu (중구) Inside Adjacent 07.00-10.00 (Morning) 38.82 33.79 10.00-18.00 (Afternoon) 33.39 41.78 18.00-24.00 (Night) 21.27 37.40 24.00 -07.00 (Late night/early morning) 16.87 31.83
Remains 27.39 24.83 41.33 51.31
Table 2 gives the example of the analysis result in Jung-gu area. As shown in this table, the taxi passengers prefer to ride the taxi inside their district area in the morning. Meanwhile in the afternoon, the passengers prefer to ride the taxi across their district (outside area). In the night and late night/early morning the remains area have the higher percentages. Table .3. Seoul taxi passenger riding behavior Total average percentages from 25 district (%) Seoul city Inside Adjacent Remains 07.00-10.00 (Morning) 43.37 36.11 20.52 10.00-18.00 (Afternoon) 47.40 35.64 16.97 18.00-24.00 (Night) 35.98 32.78 33.21 24.00 -07.00 (Late night/early morning) 31.53 33.16 36.06
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The analysis results of passenger riding behavior from 25 districts in Seoul city are tabulated in Table 3. As shown in this table, we can see that in the morning time (07.00-10.00) most of the passengers prefer to ride the taxi inside their district (43.37 %); in the afternoon time the result analysis is similar with that in the morning; most of the taxi passengers prefer to ride from their district (47.40 %). Also in the night time; the result of the analysis is similar with that of the morning and afternoon time when most passengers prefer to ride taxi inside their district (35.98 %). The different results of analysis show in the late night/early morning time, the remains area have higher percentages than in the inside and adjacent areas, in which the taxi passengers prefer to ride the taxi (36.06 %). From the tables above, we have obtained the information that most of the passengers ride taxi for a short distance, inside their district but rarely use taxi for the long distance, except at the late night/early morning. In general, the passengers will use the taxi in a long distance when they need are under an urgent condition or another situation when the service of public transportation such as bus or subway is not available anymore.
3.3. Taxi riding time analysis Riding time is one of the important aspects of taxi passenger analysis behavior. Based on the get on and get off time data, the riding time can be obtained by alleviating the get off time by get on time. Basically, this result gives the information about “how long the time” spent by passengers in the taxi. The riding time analysis result shows that most of the passengers ride taxi in a short time, between 5-10 minutes (30 %) followed by 15-30 minutes (22%) and 1-5 minutes (20 %). Figure 5 shows the analysis result.
Fig. 5.Taxi passengers riding time distribution It proves that the previous analysis result which concluded that most of the passengers used taxi inside their districts. The short riding time means the short riding distance.
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3.4. The “hotspot” area analysis From the whole analysis, finally we found which area has a potential demand for the taxi passengers or we call it “hotspot” area, an area that had higher numbers of passengers compared to the others. The first is Teheran Street in Gangnam-gu and the second is Dongdaemun Market in Jung-gu & Jongno-gu. Figure 6 shows the visualization of Teheran street or known as “Teheran Valley” using Google Earth software application.
Fig.6. View of “Teheran Valley” via Google Earth
Fig.7. View of Dongdaemun market via Google Earth
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Figure 7 shows the visualization of Dongdaemun market area using Google Earth software application. It is noted that 35 % of the taxi passenger distribution in Gangnam-gu was found in “Teheran valley” and 25 % of taxi passenger distribution in Jung-gu & Jong-no-gu was that of the passengers in Dongdaemun market. 4. Conclusion Basically this paper analyzes the distribution of taxi passengers in Seoul city. Using the multidimensional analysis, the raw data can be transformed into valuable information. The variables used in this analysis are location, time, and frequency. Before analyzing the data, the raw data from one of Korean taxi companies which contains of GPS longitude and latitude coordinates are transformed into real locations/addresses. Using the Delphi Geocoding Software which is connected to Google location database, the GPS coordinates can be converted into locations and the results are in Korean characters (Hangeul). Even though the distributions of taxi passengers in Seoul city are relatively prevalent, some areas in certain districts show preeminent frequency. From the general distribution of taxi passengers, the Gangnam-gu area had the highest taxi passenger distribution (35%). Gangnam-gu which is known as a business area, had the highest potential of taxi passengers compared to the others. In this case the company can add the additional dispatching fleet to this area, especially in “Teheran Valley” where the traffic time are conducted at the morning rush hours (07.00 am-10.00 am) and in the late night/early morning (01.00 am-02.00 am).The distribution of the taxi drivers in shopping areas should also be managed well by company. The analysis result shows where Dongdaemun market gives a significant contribution and has the highest rate of taxi passengers (25 %), with the traffic time between 14.00 pm to 19.00 pm, when many people go out for shopping. The inside, adjacent and remains area analysis results give more detailed information about taxi passengers behavior in Seoul city. The results show that most of the passengers ride taxi for a short distance, inside their district and rarely use taxi for the long distance, except in the late night/early morning time. From the riding time analysis we found the fact that most of the customers ride taxi in a short time (less than 30 minutes) with the highest interval time between 5-10 minutes (30 %). It proves that most of taxi passengers ride the taxi inside their district not to the adjacent or remains area. In general, this research gives an illustration of the taxi’s passenger riding distribution and taxi passenger behavior, especially in Seoul city area. Based on this analysis, the company can get the valuable information about their customer. It enables them to re-evaluate their current fleet management in order to optimize and increase their taxi’s driver working performance.
References [1] Ashbrook, D. and Starner, T. (2003) “Using GPS to learn significant locations and predict movement across multiple users”, Personal and Ubiquitous Computing, Vol. 7, No. 5, pp.275–286 [2] Chang, H-W., Tai Y-C., and Hsu, J. Y-J. (2010) “Context –aware taxi demand hotspots prediction” International Journals of Business Intelligence And Data Mining, Vol. 5, No. 1, pp. 3-18 [3] Lee, J., Shin, I. and Park, G. L. (2008) 'Analysis of the Passenger Pick-Up Pattern for Taxi Location Recommendation,' Fourth International Conference on Networked Computing and Advanced Information Management, Vol. 1, pp.199-204 [4] SDI (2006) Internal data: Seoul Metropolitan Government “The study of construction of complex transfer center 2007“, Seoul Statistical Year Book [5] Shin, I-H., Park, G.L., Saha, A., and Kwak, H-Y., Kim, H. (2009) “ Analyzing of moving pattern of moving object with the proposed framework” Proceeding of International Conference on Computational Science and Its Applications: Part II, pp.443-452 [6] Yan Yue, Yan Zhuang, Qingquan Li and Qingzhao Mao; “Mining dependent attractive areas and movement pattern from taxi trajectory data, “The 17 th International Conference on Geoinformatic “Vol I: pp.1-6, 12-14 Aug.2009
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The Effect of Information System, Organizational Structure, Human Resource Development, and Organizational Cultures to Universitas Terbuka’s Learning Organization (LO) Agus Joko Purwanto, Marisa Universitas Terbuka Jl. Cabe Raya, Pondok Cabe, Pamulang, Tangerang Selatan, Banten
Abstract The purpose of this research is to examine the direct effects of variables of information system, organizational structure, human resource development, and organizational cultures to Universitas Terbuka’s learning organization (LO). This is a mix methods research. Quantitative data were gathered using questionnaire, interview, and observation, while qualitative data were gathered by depth interview and observation. The populations of this research were 733 UT’s lecturers, and the samples for quantitative data were 341 Universitas Terbuka’s lecturers in the UT’s head office and at UT’s regional offices all over Indonesia. The sampling technic was simple random sampling. While the qualitative data were obtained by using depth interview to five informants. Data were analyzed descriptively and hypothesis tested by using regression analysis. Based on hypothesis testing, the results of this research show that (1) information system is the strongest effect to LO; (2) organizational cultures have an effect on LO; (3) organizational structure have no effect on LO; (4) human relation development has no effect on LO. At UT, the implementation of information system which is combined with total quality management is the first step to transform organization to a learning organization. The implication of this research is if an organization wants to increase its effectiveness, the organization should increase the effectiveness of its information system and organizational cultures.
© 2014 Agus Joko Purwanto, Marisa. Published by Telkom Pub. Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia. Keyword: Learning information system, organizational structure, organizational culture, and human resource development
Introduction Strategic Plan of the Universitas Terbuka/UT (Indonesian Open University) stated that UT should be an adaptive and flexible organization. Furthermore, UT also needs to transform itself into a learning organization (LO). Values used as the basis for the building of organizational culture are total quality management (TQM) and good and corporate governance (Universitas Terbuka, 2009). The transformation of values, infrastructure, systems and work procedures, remuneration and human resources are aimed to achieve UT’s vision. Based on the International Council for Distance Education (ICDE) quality review in 2005, UT has been assessed as a learning organization while in the second review in 2010, the ICDE declared that UT has a world-class system on distance learning. However, these reviews showed that UT needs to make some improvements on several issues such as; (1) develop
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the collaboration between students and alumni to create new knowledge, (2) improve the quantity and quality of communication between students and tutors with regional offices, (3) increase the staff ability in the exploration of information systems, and (4) expand the sharing between tutors and students. Based on the background, the purpose of this study is to explore the factors that support and hinder the UT transformation into LO. Theoretical framework LO is defined into three different definitions. Senge defines LO as a place ... a place where people are continually discovering how they create their reality. And how they can change it (Senge, 2006). Garvin defines LO as the ability of an organization ... organization skilled at creating, acquiring, interpreting, transferring, and retaining knowledge, and modifying at purposivefully it behavior to reflect new knowledge and insights (Garvin, 2000). Schermerhorn defines LO as a process within the organization ... the process of knowledge acquisition, information distribution, information interpretation, and organizational retention (Schermerhorn et al, 2011). Despite the differences in its formulation, the core subject of LO is the knowledge within the organization. There are many variables affect the organizational transformation into LO. According to Cumming and Worley (2005), organizational structure, information systems, human resource development, organizational culture and leadership are among variables that affect the LO. While Mullins (2005) states that components that affect organizational structure of the LO are organizational culture, and organizational climate. Marquardt (2002) states five subsystems which have strong influence to LO, are: learning, organization, personnel, knowledge, and technology. George (1997) emphasized that the need needs to create a conducive organizational climate are by encouraging, supporting, and providing rewards to the learning process. Meanwhile, the main variables that affect LO are information system, organizational structure, human resource development and organizational culture. Schermerhorn (2011), Cummings and Worley (2005), and Jones and George (2008) stated that information system (IS) plays a role in the searching, distributing, interpreting, storing, and presenting the information. To facilitate a LO, an organization needs a flexible and collaborative structure (Limerick and Cunnington, 1993); flat, dynamic, and supports empowerment (Nonaka and Takeuchi, 1995); simple (Peters and Waterman, 2004), freedom to communicate inside an organization (Fulmer and Keys, 1998). Other factors that affect the organization are human resource development (Marquardt and Reynolds, 1994), assessment, reward and training (Cumming and Worley, 2005), and human resource competencies (Mabey, 1994). Another component related to LO is the organizational culture (Cummings and Worley, 2005). Lam, et.al (2008), and Konidari and Abernot (2006) found that TQM is a bridge for the organization to be transformed into LO. This research is focused on studying the influence of variable information systems, organizational structure, human resource development, and organizational culture on LO. Research Methods Mixed methods approach, especially concurrent mixed methods procedures, was used in this research since it could provide better understanding of the research problems. Population of this research was 733 lecturers, while the total sample was 341 lecturers from head office and 37 regional centers. The sample was determined by using simple random sampling. Data were collected using questionnaires, interviews, and observations. The definition and indicators of independent and dependent variables are (1) learning organizations, the organization that provides organizational climate to build organizational effectiveness. LO is measured by testing organizational norm, knowledge creation, knowledge storing, knowledge dissemination, using knowledge. (2) While the information systems are defined to acquire and manage information for decision making. Indicators for measuring the information systems are the ability to acquire data and information, ability to categorize data and information, ability to store data and information, ability to process data and information, and ability to distribute data and information. (3) Organizational structure is the relationship between task and report coordinating and motivating organizational members to work together. Organizational structure is measured by clarity of the job description, coordination effectiveness communication effectiveness, reporting mechanism, work system and procedures, and authority. (4) Human resource development is the whole management activity
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aimed to retain and get high quality of human resources. .Human resources are measured by recruitment and selection, training and development, performance appraisal, compensation, and career development. (5) Organizational culture is a set of value and norm used to control the behavior of organizational members. Organizational culture is measured by using the value and norm; internalizing of value and norm t to the new organizational member members, and distributing the value and norm. The main data collection instrument was a questionnaire w within 129 questions. The Instruments’ validity and reliability were tested to 40 samples from the study population and 6 experts. The Validity test results produced five invalid items. And the construct validity was tested using the corrected item-total correlation. Table 1 shows the validity test result and reliability coefficient for each variable. Table 1 Resume of Validity Test Result and Reliability Coefficient No 1. 2. 3. 4. 5.
Variable
Number of Items
Learning organization Information System Organizational structure Human Resources Development Organizational culture Total
23 20 40 25 21 129
Number of Valid Items 21 20 37 25 21 124
Realibility Coefficient 0.922 0.956 0.939 0.947 0.941
Questionnaires were sent by email to 733 lecturers in 11 units at head office and 37 regional centers. The printed questionnaires were also sent to the respondents. 245 (71.8%) emailed instruments and 96 (28, 2%) printed instruments were filled out and sent back. The qualitative data were collected through some interviews with five informants: team leaders of Instructional Materials Development, Promotion, Research Information Systems Development, and Application Development Services of Bogor regional center, Head of Bogor Regional Center. The five informants were chosen because they had some experiences on how to create knowledge at UT. Data were collected at the UT Head Office and Bogor Regional Center. The interview was aimed at providing additional information about the factors that influence the process of knowledge creation at UT. Data were tested with the linearity test and the test of normality, using SPSS 19th. Linearity test performed at significance level of 0.05.
No 1. 2. 3. 4.
Table 2.The Resume Score of Data Linearity Test Tested Variables Indpnd.Variables Depend. Variables Information System LO Organization LO Organizational Culture LO HRD LO
Significance 0.763 0.559 0.597 0.554
0.000 0.000 0.000 0.000
H1 Accepted Accepted Accepted Accepted
Linear Linear Linear Linear
Table 3.
No 1. 2. 3. 4.
The Resume Score of Data Normality Test (Kolmogorov-Smirnov Methods) Tested Variables Significance H1 Indpnd.Variables Depend. Variables Information System LO 0.79 Accepted Organizationall structure LO 0.911 Accepted Organizational culture LO 0.353 Accepted Accepted Human Resource LO 0.698 Development
Relation
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Effect Normal Normal Normal Normal
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Figure 1 ‐ Inter‐Variables Effect Model
IS ( X1 ) H1 OS ( X2 )
H2 SO ( Y ) H3
HRD( X4 )
H4
OC ( X3 ) The effect of independent variables on dependent variables measured by multiple regressions.
Findings and Discussion Findings of the study are 1) Information System (IS) has a positive effect on the learning organization (LO); b. Organizational structure (OS) has no positive effect on learning organization (LO); c. Human Resource Development (HRD) has no positive influence on learning organization (LO); d. Organizational Culture (OC) has positive effect on learning organization (LO); Table 4. The R resume of the score of Inter-Variables Effect Model Variable Effect
Coefficient
The value of T
Significance (sig 1, 96.
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PLT2
0,83
13,12
0,69
0,31
PLT3
0,83
12,57
0,69
0,31
PLT4
0,81
13,96
0,66
0,34
PLT5
0,74
11,91
0,55
0,45
PLT6
0,74
12,67
0,55
0,45
SHV1
0,77
13,34
0,59
0,41
SHV2
0,9
14,31
0,81
0,19
SHV3
0,77
12,4
0,59
0,41
KOP1
0,71
0,50
0,50
KOP2
0,7
14,12
0,49
0,51
KOP3
0,53
8,75
0,28
0,72
KOP4
0,72
12,87
0,52
0,48
KOP5
0,7
12,67
0,49
0,51
KOP6
0,72
13,78
0,52
0,48
KBB1
0,66
0,44
0,56
KBB2
0,72
11,29
0,52
0,48
KBB3
0,69
14,22
0,48
0,52
KBB4
0,72
11,16
0,52
0,48
KBB5
0,59
9,98
0,35
0,65
KBB6
0,78
13,28
0,61
0,39
0,71
0,86
REMARKS
0,33 RELIABLE
0,67
RELIABLE
11,58
0,84
RELIABLE
0,82
Construct Reliability
Std. Error (δ)
PLT1
0,85
RELIABLE
KBB
Std. Loading Factor (λ)^2
KOP
T - Value
KHS
Std. Loading Factor (λ)
PLT
Indicator
Variables
Table 1 Validity and Reliability Test
Source: Result of this research The reliability was tested by means to construct reliability (CR) and variance extracted (VE) to measure the reliability. Constructs said to be reliable if CR> 0.6 (Hair et al., 2006: 777). R² value shown on each measurement equation is interpreted as a reliability indicator (Jorekog and Sorbon, 1993). Result of testing above (see Table 1) imply that the measurement model is a valid and reliable.
8.2. Path Diagram The triple-loop learning (PLT) and learning by sharing vision (SHV) constructs are independent variable that are hypothesized effect respectively on proactive organizational innovativeness (KOP) and sustainable competitive advantage (KBB) and that KOP effects on KBB. Each construct then measured by its indicators. After all relationships have been set up in symplis, and then run them up, LISREL 8.8 performs path diagram, and many calculations for SEM solution. Figure-6 is describing the path diagram configuring all relationships in the SEM.
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Figure 6 Path Diagram
Note: PLT = the triple-loop learning SHV = Sharing Vision KOP = Proactive Organizational Learning KBB = Sustainable Competitive Advantage PLT1 ... PLT6 = indicator variables of PLT SHV1... SHV3 = indicator variables of SHV KOP1... KOP6 = indicator variables of KOP KBB1 ... KBB6 = indicator variable of KBB 8.2 Effect of KSI on ETA and ETA on ETA Table-2 below, shows that construct PLT effects on KOP and on KBB strongly ( >0, 5) and significantly (t-value> 1, 96). Based on that cut-off value, effect SHV on KOP and KPP is weak and not significant. Whereas KOP strongly and significantly effects on KBB. Tabel-2 Effect of KSI on ETA and ETA on ETA Effects of KSI on ETA
ETA KOP
KBB
Total
PLT Indirect
Direct
Total
0,71
0,18
-0,16
-0,16
4,46
1,16
Effect of ETA on ETA SHV Indirect
Direct
Total
KOP Indirect
Direct
0,56
0,51
0,27
0,13
0,71
0,19
(0,17)
(0,14)
(0,17)
(0,11)
(0,13)
(0,04)
3,32
3,53
1,63
1,15
5,7
5
Source: From this research
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The relationship between constructs are stated by the following structural equations: KOP = 0.71*PLT + 0.18*SHV, (0.16) (0.16) 4.46 1.16
Errorvar.= 0.23 , (0.045) 5.10
R² = 0.77
KBB = 0.71*KOP + 0.055*PLT + 0.15*SHV, Errorvar.= 0.21 , R² = 0.79 (0.13) (0.17) (0.14) (0.043) 5.70 0.32 1.03 4.99 R² at that equation says that 77% of KOP is able to describe by those variable, and 79% for KBB.
8.3 Goodness of Fit Indices. Each requirement of fit model is justified by each cut-off values. Tabel-3 below shows that almost all indices describe that the model is fit. Table-3 Goodness of Fit Indices. GOODNESS OF FIT INDICES
CUT-OFF VALUE
RESULT OF THIS RESEARCH
REMARKS
Absolute Fit Indices χ2 Significance Probability
≥ 0.05
0.022
GFI
≥ 0.90
0,91
Fit
RMSEA
≤0.07
0,033
Fit
RMR
≤0.08
0,03
Fit
SRMR
≤0.08
0,034
Fit
χ2 : df
200 (Ferdinand, 2006:59), for sample > 250 with 13-29 indicators, P χ2 can be significant (3.09). This means that there is significant influence simultaneously between co-creation through transaction and price experience in cocreation towards customer satisfaction. To define how much each variable influencing the customer satisfaction, we conduct a partial test. The result is presented in table 5 of coefficient result. Table 5. Coefficient result
Model (Constant) 1
Unstandardized Coefficients Std. B Error 10.034 1.517
Standardized Coefficients
T
Sig.
6.615
0
Beta
X3
0.614
0.278
0.251
2.209
0.03
X4
0.482
0.194
0.283
2.488
0.015
The result of partial test shows co-creation through transaction (X3) with the tcount of 2.209 and price experience in cocreation (X4) with the tcount of 2.488. Since those variables have greater tcount than ttable of 1.98, this means that the variables mentioned have the significant influence towards co-creation experience. The correlation between X3, X4, and Y can be visualized by the path model in figure 1.
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Fig. 1. Path model of correlation between variables
After trimming the method conducted, it shows that the variables that have significant influence either directly or indirectly to customer satisfaction are the variables of co-creation through transaction and the price in co-creation experience. Direct influence for co-creation through transaction (X3) on customer satisfaction is 6.3%, while the indirect effect through (X4) is 4.4%. The direct effect of price experience in co-creation (X4) on customer satisfaction is 8%, while indirect effect through X3 is 17.5%. The calculation of the influence is presented in table 5. Table 5. Direct and indirect influence of co-creation experience on customer satisfaction
Co-creation Through Transaction (X3)
Price Experience in Co-creation (X4)
Direct = = 0,251 0,251 = 0,063 = 6,3%
Indirect Through X4 =
= = 0,283 0,283 = 0,08 = 8%
Total Influence = 6,3% + 4,4% = 10,7%
= 0,251 0,283 = 0,044 = 4,4% Through X3 =
0,623
= 0,283 0,251 = 0,044 = 4,4%
0,623
= 8% + 4,4% = 12,4%
3.3 Contribution to literature In this study we have found the influencing factors and should be maximized in order to obtain value added to a product. Therefore, two important values should be integrated in the marketing literature, customer satisfaction and customer participation in product creation. By establishing the relevance of co-creation experience in customer satisfaction, we have established a basis for future research. This study has determined several things that cause the lack of effective co-creation experience towards customer satisfaction. How is the role of a company that should have more intense two-way communications with customers so that the customers will feel more engaged in the manufacture of the product, and how the product can meet the needs and desires of consumers to maximize customer satisfaction with the product? Not only limited to product availability and price as we know that in the era of new wave marketing now, everything is horizontal especially in the terms of marketing. This research uses dimensions of choice in co-creation as its approach by Prahald and Ramaswamy [4]. These dimensions serve as independent variables that give influence to customer satisfaction. The focus of this study is to investigate and determine whether or not co-creation experience has significant influence towards customer satisfaction. In this study we use dimensions of choice as independent variables that give influence as the approach. Future research should explore other potential approaches of co-creation experience that might have more significant influences toward customer satisfaction. This study is limited to retail products which are low involvement goods. Future research should also study co-creation on high involvement goods like technology or vehicle that can provide maximum customization that might maximize co-creation experience as well.
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4. Conclusion The purpose of this study is to analyse the influence of co-creation experience on customer satisfaction using retail product as the object of research, Sunsilk Co-creation, thus the theoretical and experimental studies are conducted in this research. Quantitative method is used in this study with questionnaires as the media of data collection, path analysis and statistical formulation are used to process the data. Based on the data processing, it is found that the co-creation experience variables that have significant influence towards customer satisfaction are co-creation through transaction and price experience in co-creation. The tests found that 25% of customer satisfaction are simultaneously influenced by co-creation experience and the other 75% are influenced by other factors that are not discussed in this study.
References [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] [15] [16] [17] [18]
Kotler, P., Kartajaya, H., Setiawan, I., 2010. Marketing 3.0: From Products to Customer to Human Spirit. New Jersey. John Wiley & Sons Inc. Sjodin. C., Kristensson, P., 2012. Customers’ Experience of Co-creation During Service Innovation. International Journal of Quality and Service Sciences 4, pp. 189-204. Singh, A., Srivatava, M., 2013. Factors Affecting Customer Satisfaction: A Study on Maruti Suzuki. International Journal of Advanced Research in Computer Science and Software Engineering 3, pp. 865-874. Prahalad, C.K., Ramaswamy, V., 2004. The Future of Competition: Co-creating Unique Value with Customers. Massachisetts. Harvard Business School Publishing. Kartajaya, H., 2010. Connect! Surfing New Wave Marketing. Jakarta. PT. Gramedia Pustaka Utama. Schmitt, B.H., 2003. Customer Experience Management. New Jersey. John Wiley & Sons Inc. Dobrota, M., Nikodijevic, A., Mihailovic, D., 2012. Influence of The Customer Experience on Satisfaction with Mobile Phones. Journal of Engineering Management and Competitiveness 2, pp. 69-75. Gustafsson, H., Kristensson, P., Witell, L., 2012. Customer Co-creation in Service Innovation: a Matter of Communication?. Journal of Service Management 23, pp. 311-327. Dong, B., Evans, K.R., Zou, Sahomig., 2007. The Effects of Customer Participation in Co-created Service Recovery. Journal of Academy of Marketing Science 36, pp. 123-127. Kotler, P., Keller, K.L., 2009. Marketing Management 13th Edition. New Jersey. Pearson Prentice Hall. Cengiz, E., 2010. Measuring Customer Satisfaction? Must or Must Not?. Journal of Naval Science and Engineering 6, pp. 76-78. Sugiyono, 2010. Metode Penelitian Kuantitatif, Kualitatif, dan R&D (Quantitative and Qualitative Research Method and R&D). Bandung. Alfabeta. Sugiyono, 2007. Metode Penelitian Bisnis (Business Research Method). Yogyakarta. Alfabeta. Suhasaputra, U., 2012. Metode Penelitian Pendidikan (Education Research Method). Bandung. Alfabeta. Abdurahman, M., Muhidin, S.A., 2007. Analisis Korelasi, Regresi, dan Jalur Dalam Penelitian (Correlation, Regression, and Path Analysis in Research) . Bandung. Pustaka Setia. Tika, P., 2006. Metode Riset Bisnis (Business Research Method). Jakarta. Bumi Aksara. Sandjojo, N., 2011. Analisis Jalur (Path Analysis). Jakarta. Pustaka Sinar Harapan. Sarwono, J., 2007. Analisis Jalur untuk Riset Bisnis dengan SPSS: Aplikasi Dalam Riset Pemasaran, Keuangan, Manajemen, Sumber Daya Manusia, dan Kewirausahaan (Path Analysis for Business Research with SPSS: Application in Marketing, Finance, Management, Human Resource, and Entrepreneurship Research). Yogyakarta. Andi.
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The Influence of E-SERVQUAL on Customer Satisfaction Dika Rian Perdani,* Fetty Poerwita Sary Faculty of Economic & Business, Telkom University, Jl. Telekomunikasi no. 1 Terusan Buah Batu, Bandung, West Java, Indonesia
Abstract This study aimed to determine the influence of E-SERVQUAL on Customer Satisfaction, with Mobile Phone Account of CIMB Niaga as the object of analysis. The analysis of this study focused on the dimensions of E-SERVQUAL consisting of Efficiency, System Availability, Fulfilment, Privacy, Responsiveness, and Contact. The method used in this study was Path Analysis. The results of this research were that E-SERVQUAL of Mobile Phone Account gave significant influences on Customer Satisfaction simultaneously, and only Efficiency, Privacy, and Contact gave significant influences on customer satisfaction partially.
© 2014 Dika Rian Perdani, Fetty Poerwita Sary. Published by Telkom Pub. Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia. Keywords: E-SERVQUAL; Customer Satisfaction; CIMB Niaga; Path Analysis.
1. Introduction In business, getting a stable income is a must in order to survive in market, which means that a company should have a way to maintain a continuous purchasing conducted by their customer. A customer who buys a product continuously is a happy customer, and the same goes for bank customer. According to Navaratnaseelan [1], maintaining high quality services in a commercial bank will result excellent customer satisfaction, and low quality services will lead to a decline in customer satisfaction, which also may result the loss of the customers. According to Kotler [2], turbulence happens in current market, based on the following elements: Changing Technology, Globalization, Deregulation, Privatization, Customer Empowerment, Customization, Heightened Competition, Industry Convergence, Retail Transformation, and Disintermediation. In order to survive in current market, companies (including CIMB Niaga) should involve those elements in their services. One of the elements that cannot be separated is changing technology. Technology exists among society, and it has become daily needs. Therefore, to develop a technology-based innovation is a suitable way to empower companies in order to make certain of their existence in current market. In this case, PT CIMB Niaga Tbk launched a new service innovation: mobile phone account that enables customer to do many transactions only by their mobile phone number. To determine whether this innovation is enough to boost or just merely maintain their customer’s expectation, a certain research must be done. In this research, we conducted a research regarding the influence of electronic service quality on customer’s satisfaction (A Case Study of Mobile Phone Account of CIMB Niaga) According to Kotler [2], customer satisfaction is a result that felt by customers who experiences the product’s performance that met their expectations. Customers will feel satisfy if their expectation is fulfilled, and they will feel delightful if the performances of product exceed their expectations. A satisfied customer tends to keep being loyal in a longer period; purchase more; and be insensitive in the change of price, and their words give a benefit for the company. According to Egena [3], a firm’s success and growth are dependent, at least in part, on the extent to which it could integrate the firm’s knowledge about the customers’ needs, wants, preferences, and so on with the firm’s own intellectual, creative capacity and skills. Consequently, a comparative advantage is secured through an intelligent identification and satisfaction of customer needs that are better and sooner than its competitors, and sustenance of customer satisfaction through better service quality. Therefore the theoretical framework to determine the level of customer satisfaction is: if a customer is known satisfied, then the company only needs to maintain its service quality; if a customer is known unsatisfied, then the company needs to improve its service quality. In a context of mobile phone account as electronic service quality (or known
*) contact email: [email protected]
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as E-SERVQUAL), the concept of e-service, according to Soledad [4], is a broad concept and there is no definition of the term that is generally accepted by all researchers since the function of electronic service is perceived differently depending on contained functions. However a complete definition of e-service should go beyond mere commercial transactions (ecommerce) to take into account all the key processes and interactions that are involved before, during, and after delivering the services. We believe that the key factors of mobile phone account’s service quality are determined by the factors below, which are well known as E-Servqual’s dimensions supported by Zeithaml [5]: a)
Efficiency: the ability of a customer to access account, search for desired products and information that related to the desired products, and leave the account with minimum effort. Later it will be referred as X1 b) Fulfillment: the actual company performance compared with the promised company performance through online and offline promotion. Later will be referred as X2 c) System Availability: the technical functionality of the site. Whether it functions as it should be or not. Later will be referred as X3 d) Privacy: the assurance and ability of the company to protect the customers’ data integrity. Later will be referred as X4 e) Responsive: the effectiveness of problems handling and restitution through the site. Later will be referred as X5 f) Contact: availability of help through telephone or online representative. Later will be referred as X6 According to the explanations above, we were able to make the theoretical framework to be used in this research and to become the reference for systematic steps making the first level of discussion to be the basic of the next level of discussion. Figure 1 below is the theoretical framework of this research:
E-SERVQUAL (X): Efficiency (X1) Fulfillment (X2) System Availability (X3) Privacy (X4) Responsive (X5) Contact (X6)
CUSTOMER SATISFACTION (Y): Comparing expectation with perceived performance
Fig 1. The theoretical framework.
2. Method 2.1. Population and Sample The total population is the customers of CIMB Niaga who use mobile phone bill. According to Kontour [6], the representative of this population is called a sample. To set the number of respondents, Parasumanan [7] stated that the sample size of the population with an unlimited number can be decided by taking of at least four or five times the number of the studied sub variables. The sub variables in this study were seven. Therefore, the minimal number of respondents of this study was 35 respondents.
2.2. Research Design The researchers used a quantitative research by using questioner and customers of CIMB Niaga’s Mobile Phone Account as the respondents. Total obtained respondents were 101 persons. Based on figure 2 we were able to determine that samples consisted of 60% female and 40% male with the total of samples of 101 respondents, including 28% of the respondents who had used the CIMB Niaga’s mobile phone account for less than one month, and 72% of the respondents who had used the CIMB Niaga’s mobile phone account for one month and more. .
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Fig 2. The respondents based on gender (left) and based on the length of usage (right).
2.3. Research Data A research data is an amount of obtained scores from respondent’s responses towards questions or statements regarding the operational variables, which are variable X (E-SERVQUAL) and variable Y (Customer’s satisfaction). These variables were analyzed by using quantitative analysis, descriptive statistic and non – parametric statistic testing, which is path analysis. Suharsaputra [8] said that the path analysis is used to describe the relationship between the variables of both conceptual and statistical. The obtained respondent data through the questionnaire were analyzed descriptively. Other data obtained from literature would be used as the secondary data to complete and support the primary data. 3. results and discussions
3.1. Response towards E-SERVQUAL and customer satisfaction The response of respondents towards E-SERVQUAL and the customer satisfaction can be seen in the table 1 below: Table 1: Response towards E-SERVQUAL and customer satisfaction Variable(s) % Categorized as E-SERVQUAL 73,96% High Details Efficiency (X1) 78,59% High Fulfillment (X2) 64,73 High System Availability (X3) 77,23% High Privacy (X4) 78,22% High Responsive (X5) 72,65% High Contact (X6) 72,36% High Customer Satisfaction 75,25% High Based on the table above, the researchers can determine as follow: a) The response towards the efficiency of CIMB Niaga’s Mobile Phone Account was high with the percentage of 78, 59%. According to Zeithaml [5], it means that the customers of CIMB Niaga experienced the easiness of using Mobile Phone account, because the display of the Mobile Phone Account enabled them to find what they needed, and they could log out with minimum effort. b) The response of respondents towards the fulfillment of Mobile Phone Account was categorized high with the percentage of 64.73%. Using zeithaml theory [5], we can interpret that the customers of CIMB Niaga’s Mobile Phone Account felt satisfied enough, and perceived that the services of the product were quite the same as the promise. However, it should be underlined that the response towards the fulfillment was the lowest compared others. c) The percentage of system availability reached 77, 23% or was in the category of high. It can be interpreted the data as follows: according to the respondents, the system of Mobile Phone Account functioned as it should be. d) The response of the respondents towards the privacy of Mobile Phone Account was categorized high with the percentage of 78.22%. It can be interpreted that CIMB Niaga was able to give assurance, and protected the integrity of their customer’s data.
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e)
The response towards the responsiveness reached the category of high with the percentage of 72, 65%, and according to Zeithaml [5], the interpretation is that the customers felt that the company helped them quite well when a problem occurred. f) The response towards the contact was categorized high with the percentage of 72, 36% meaning that the customers found no difficulties in contacting the company, and responded quite well as defined by Zeithaml [5]. It can be concluded that the E-SERVQUAL of CIMB Niaga’s Mobile Phone Account reached 73.88% or accounted as high for respondents g) The response towards the customer satisfaction was categorized high with the percentage of 75,25% meaning that customer was satisfied enough with this services because it complied with customer’s need and expectation, and customer was willingly to recommend the services and had no intention to stop using the services, this theory was supported by Kotler [2].
3.2. The Path Analysis 3.2.1.
The Simultant Path Coefficient Testing
After being tested simultaneously and partially, the researchers came to a conclusion that 3 variables of Fulfillment (X2), System Availability (X3) and Responsiveness (X5) were not qualified to get modeled as the path model, therefore the mentioned variables were excluded from the calculation. The remaining variables: Efficiency (X1), Privacy (X4) and Contact (X6) were calculated to determine their influence towards the customer satisfaction (Y), then the results were as follows: a) The determination coefficient was 0,521 or 62,1%, which was interpreted that E-SERVQUAL influenced the customer satisfaction as much as 62,1%, while other factors that were not concern in this research influenced the customer satisfaction as much as 37,9% b) The researchers obtained Fcount of variables was 52,692 while Ftable was 2, 69. It can be concluded that Fcount>Ftable. The statement can be interpreted as: E-SERVQUAL gave a significant influence towards the customer satisfaction.
3.2.2.
The Partial Path Coefficient Testing
After being tested simultaneously, the individual testing was then performed again to see the significance of the effect of independent variables (X1, X4, and X6) partially on the dependent variable (Y). It, then was tested by t-test a) X1 had tcount of 3,564 and ttable of 1, 98. By this the researchers can conclude that tcount > ttable, so the interpretation was that there was a significant influence between the efficiency and the customer satisfaction b) X4 had tcount of 5,865 and ttable of 1,98. By this the researchers can conclude that tcount > ttable, so the interpretation was that there was a significant influence between the privacy and the customer satisfaction c) X6 had tcount of 2,112 and ttable of 1, 98. By this the researchers can conclude that tcount > ttable, so the interpretation was that there was a significant influence between the contact and the customer satisfaction
3.2.3.
The Path Model
These variables with a significant effect had been simultaneously and partially obtained. It consisted of X1, X4, and X6. The making of path models and equation was plausible. The value of the correlation between variables eksodern was needed to be able to create the path models and equation. Here below is the analysis of the path model:
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Efficiency (X1)
ρyx1 = 0,305 Customer Satisfaction (Y)
Rx1x4 = 0,478
0,379
Ρyx4 = 0,443 Rx1x6 = 0,668 Privacy (X4)
Ρyx6 = 0,188
Rx4x6 = 0,539
Contact (X6)
Fig 3. The Path Model of Efficiency, Privacy, and Contact on the Customer Satisfaction The structural equation model is as follows: Y = 0,305 X1 +0.443 X4 + 0.188X6 With residues derived from (1-coefficient determination) = (1 – 0,621) = 0,379 Thus, the calculations can be done as follows:
(1)
Table 2: Results The Influence of Variable Through Variable Efficiency (X1)
Efficiency (X1)
Privacy (X4)
Contact (X6)
ρyx12 = 0.3052 = 0.093
ρyx42 = 0,1962
=
ρyx1 rx1x6 ρyx6 = 0.305 x 0.668x 0.118 = 0.024
Privacy (X4)
ρyx1 rx1x4 ρyx2 = 0.305 x 0.478x 0.443 = 0.0645
ρyx1 rx1x4 ρyx2 = 0.443 x 0.478x 0.305 = 0.0645
ρyx6 rx4x6 ρyx4 = 0.118 x 0.539x 0.443 = 0.028
Contact (X6)
ρyx1 rx1x6 ρyx6 = 0.305 x 0.668x 0.118 = 0.024 0,093+0,0645+0,024 = 0,1816
ρyx4 rx4x6 ρyx6 = 0.443 x 0.539x 0.118 = 0.028 0,1962+0,0645+0,028 = 0,2887
ρyx62 = 0.1182 = 0,0139
Total Influence The total influence of e-Servqual on the customer satisfaction of CIMB Niaga
0.4432
0,0139+0,0240+0,028 = 0,0659
0,1816 + 0,2887 + 0,0659 = 0,5362
Thus, the researchers can conclude the total influence of the E-SERVQUAL consisting of efficiency¸ privacy, and contact variables on the customer satisfaction reached 53.62%
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4. Conclusions 4.1. The Conclusions E-SERVQUAL of mobile phone account in this study were divided into 6 sub-variables, namely Efficiency, Fulfillment, System Availability, Privacy, and Contact Responsive. The 6 sub-variables have been responded, and were categorized high. It can be concluded that the E-SERVQUAL of CIMB Niaga’s Mobile Phone Account reaching 73.88% was accounted high by the respondents. The customer satisfaction responded by the respondents in the distributed questionnaire reached the level of 75.25%, and it can be categorized high. It can be concluded that the customers satisfied with the service quality offered by the mobile phone account. For the simultaneous test, it was noted that the coefficient determinant of trimming phase 3 resulted in this study was 0.621. This means that the E-SERVQUAL of mobile phone accounts had an influence on the customer satisfaction phones account as much as 62.1%, and 37.9% of it was influenced by other factors. The f-test was also performed to determine the simultaneous effect of variable X to variable y, which was obtained that the Fcount was 52,962, and the Ftable was 2.966. Thus it was concluded that if the Fcount> Ftable, there was a significant effect with the E-SERVQUAL on the customer satisfaction simultaneously. Then the partial test was also conducted to determine the effect of independent variables on the dependent variable individually, which in this study the results were obtained from the 6 variable Xs: Efficiency (X1), Fulfillment (X2), System Availability (X3), Privacy (X4), Responsive (X5) and Contact (X6), only Efficiency (X1), Privacy (X4), and Contact (X6) that had a significant influence on the customer satisfaction (Y) with the tcount was 3,564, 5.865, and 2.112 respectively. 3 variables passed the T-test in which tcount> ttable with the ttable of 1.99. Thus it can be seen that the total influence of the ESERVQUAL of CIMB Niaga’s mobile phone account on the customer satisfaction through path models was 53.62%. The following is the explanation of each of these variables analysis: a. The customer of mobile phone account satisfaction was influenced by the efficiency of its service. It means that the customers were satisfied because they can efficiently use the mobile phone account b. The customer satisfaction was not influenced by the fulfillment of the promise of the mobile phone account’s service. It means that the customers did not feel satisfied because they felt that the perceived performance of mobile phone account did not match what was promised c. The customer satisfaction was not influenced by the presence of mobile phone account. It means that the customers did not feel satisfied because they could not access the mobile phone account in every available CIMB Niaga machine (either Automatic Teller Machine or Cash Deposit Machine) d. The customer satisfaction was affected by the privacy of the service. It means that the customers were satisfied because they felt their privacy can be protected in the mobile phone account of CIMB Niaga e. The customer satisfaction was not affected by the responsiveness of service, which means that the customers were not satisfied because the CIMB Niaga’s phone number account / CIMB Niaga was not responsive enough when there was a problem f. The customer satisfaction was influenced by the contact of service. It means that the customers were satisfied because they could call the contact number of CIMB Niaga and could solve the problem through the contact. Through this study, it can be concluded that the E-SERVQUAL of mobile phone accounts had a significant influence on the customer satisfaction of CIMB Niaga.
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The Influence of E-SERVQUAL on Customer Satisfaction
Reference [1] [2] [3] [4] [5] [6] [7] [8]
Navaratnaseelana, J.J. and P. Elangkumaranb., 2014. Impact of Servıce Qualıty on Customer Satısfactıon: A Study on Customers of Commercıal Bank of Ceylon PLC Trincomalee District. Sri Lanka. ICME 2014 Kotler, P., Amstrong, G. 2008. Principle of Marketing 12nd Edition. USA. Pearson Egena, Ode.,2013. Customer satisfaction in mobile telephony: An analysis of major telecommunication service providers in Nigeria. Benue State. ASIAN JOURNAL OF MANAGEMENT RESEARCH Soledad, J.M., Miranda, F.J. 2013. Exploring Service Quality Dimensions in B2B e-Marketplaces. Journal of Electronic Commerce Research, VOL 14, NO 4, 2013 Zeithaml, V., Bitner, A, Gremler. D. 2009. Service Marketing 5th Edition. USA. McGraw-Hill Kontour, R. 2004. METODE PENELITIAN Untuk Penelitian Skripsi dan Tesis (Research Method for Thesis). Jakarta. Teruna Grafica Parasumanan, A., Zeithaml, V.A., Malhotra, A. 2005. E-S-QUAL (A Multiple-Item Scale for Accessing Electronic Service Quality). USA: Journal of Service Research Suharsaputra, U. 2012. METODE PENELTIAN KUALITATIF, KUALITATIF DAN TINDAKAN (Qualitativem Quantitative and Action Research Method). Bandung. Refika Aditama
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The inffluence of o markeet attracttiveness and corre compeetence on value creatiion and competit c tive advaantage and a its im mplicatioon on bu usiness Perform mance (A A study aat Pay TV V Industtry in Inddonesia)) F Firsan Nov va Doctor Candid date, Faculty of E Economic & Busin iness, Univeristy of o Padjadajaran, Jl. Dipati Ukur ur 35, Bandung, 40132, 40 Indonesia Faculty of Econo nomic University of o Darma Persada da Jl. Radin Inteen II (Terusan Cas asablanca) Pondokk Kelapa, 13450, Jakarta Timur
Abstract A The average Indoonesian watchees 5.5 hours of TV T a day. Withh a population of o 242 million people p and a Frree-to-Air (FTA A) TV penetratiion watched each daay. With such potential, p it is nno wonder that many companiies raate of56%, that equates to 7455 million hours of television w arre now attemptting to get intoo the Pay TV market. Reseaarch firm Mediia Partner Asiaa has forecast iin its study that the number of In ndonesian pay-ttelevision subscribers will cliimb from 2.4 m million in 2012 2 to 8.7 million n by 2020, withh penetration scaling s up from m7 peercent to 21 perrcent. Key K drivers of m market growth, the t study says, include macro trends built aro ound higher dissposable income me and a rising middle m class, with w leeading players continuing to invest i significaantly in sales, ddistribution and d content. New w entrants, in thhe meantime, will w boost overrall prrospects. This study aims to examine andd analyze the efffect of Market Attractiveness and the Core Competence C on V Value Creation n and Competitiive Advantage A and iits impact to Buusiness Perform mance in the paay TV industry y in Indonesia. The study usinng strategic man nagement sciennce ap pproach with thhe census methhod in which all a members off the population n are as samplee. Verification method is used to examine the t reelationship betw ween variables. The unit of anallysis in this ressearch is all Ind donesian Pay T TV business un nits totaling 19 business unitss. The unit of observation o is the t b unit. Hypothesis H testinng is performed d by using statisstical Partial Leeast Square (PL LS). diirector and mannagers of each business m attractivveness affects business b perform mance throughh value creation n and competitiive The conclusion of the study shhows that the market ad dvantage. The appropriate vaalue creation comes c from thhe company ab bility to optim mize its core ccompetence and exploit markket atttractiveness. V Value creation afffects competitiive advantage. The competitiv ve advantage can be determinedd based on the company's abillity to o create value foor customers annd the competitiive advantage hhas an impact on business perfformance.
© 2014 Firsan N Nova. Publishhed by Telkom m Pub. Ltd. Selection and ppeer-review unnder responsib bility of The IISCLO, Depaartment of Com mmunication, University off Telkom, 203342 Bandung, B Indonnesia. Keywords: K Markett Attractiveness, Core C Competencee, Value Creationn, Competitive Ad dvantage, and Bu usiness Performannce
IN NTRODUCT TION In general, pay TV businness in Indoneesia has develooped quite weell driven by the t entry of neew players intto this businesss. However, H markket penetratioon is still relaatively small or less than 3%. The market which iss large enoug gh to encouraage in nvestors to entter into the paay TV businesss has made thhe pay TV bu usiness in Indo onesia more at attractive. Alth hough Indonessia haas a total of 662.5 million households h in 2011, with a population off approximately 48 million televisions, th he developmeent
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of pay TV industry in Indonesia is the slowest in Asia, only capable of penetrating to 3% of households, or about 1.3 million houses in various regions in 2010. Indonesia had a total number of 62.5millionhouseholdsin 2011, with a television population of approximately48million, while the potential market of pay TV subscribers in Indonesia reached approximately 12 million, or about 30% of the population of the television. The fact that there are more than 40 million television owners and the new untapped market of 2.5 percent can create new markets. There are a number of factors that make the sale of pay TV in Indonesia is still not excited, such as: the subscription rates issue which has not yet been attractive; and the support of local content providers which is still relatively weak. The content of pay TV is dominated by foreign investors. Nearly50percent of operating costs is spent on buying content. It greatly affects the cost of the subscription. Based on the research results of Price Waterhouse Coopers (PWC), the growth of pay TV market in Indonesia is only around 2% per year, far below Vietnam, Malaysia, and even Pakistan. The lack of penetration of pay television services (pay TV) in Indonesia has made business opportunities in this sector quite large. Pay TV penetration in Indonesia is estimated to reach 5% -10%. The crucial thing in pay TV business is the people adoption rate which is still low. Today most of the people in Indonesia still rely on free-to-air services which are commonly used today. Pay TV market penetration is only 3% per year, far below Malaysia 50%, India 79% and China 45%. However, the pay TV service providers continue to believe that market will grow to 7% by 2015, in line with economic growth and purchasing power. Ideally, pay TV subscribers is 30% of the total TV owners; in Indonesia the number of pay TV subscribers is only 2% of the total 40 million TV owners. In order to accelerate market growth, the existing operators such as MNC Sky Vision, Telkomvision, and First Media and other, have come up with various strategies of product differentiation to target lower segments. Good education becomes crucial to support the migration of consumers to pay TV FTA. Innovation in the field of content is also crucial to encourage people to use a pay TV service. Local content is considered as one potential model of content. The competition in pay TV is not only the content, but also the creation of value for the customer; the key is to wrap products according to the targeted customers segments. Space for innovation in pay TV is more limited than the telecommunications business. However, the moving level of customers (churn) in the pay TV is more difficult than telco because there is a device installation process which is not easy. In conducting the business, pay TV company has several factors that may affect the business activities that may impact the company's performance either directly or indirectly. The inability of the company in the creation of value will result in the difficulty to get, to improve and to maintain the customers, which eventually will give negative impact to the company's operational and financial performance. In the last five years, 5 pay TV companies have been recorded to have declared to cease its operations. With the huge market opportunity, bankruptcy becomes an interesting phenomenon to observe. There were at least four pay TV companies that stopped operatingin 2012. The first was Globalvision which stopped operating in 2002. Globalvision officially ceased operations before promoting its subscription packages. The second was Astro Nusantara which stopped operating in 2008. It is due to unresolved internal conflict between Astro All Asia Networks and DirectVision as the owner of Astro Nusantara upon license and stocks possession issues. Third, was PentaVision which stopped operating in 2012. Like Globalvision, PentaVision stopped operating before launching the products officially. Despite the slow market growth and collapse of four pay TV companies, there are huge enthusiasts for this kind of industry. There are currently at least 250 companies that apply for opening pay TV business in Indonesia. Based on the above explanation, we intend to observe the influence of market attractiveness and the core competence on value creation and competitive advantage and its implications upon business performance of pay TV industry in Indonesia. 1. PROBLEM FORMULATION AND HYPOTHESES Based on the identification of the problems above, the scope of variables to be studied consists of market attractiveness, core competence, value creation, competitive advantage and business performance. The object under study is a paid or subscription television industry located in Indonesia. The time of the study was scheduled in 2013. Based on the formulation of the problem and research paradigms that have been described, the hypotheses of this study are as follows: 1. Market attractiveness and the core competence influence value creation either partially or simultaneously.
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2. 3. 4.
Market attractiveness and core competence influence competitive advantage. Value creation influences competitive advantage. Market attractiveness and core competence influences business performance through value creation and competitive advantage.
2.
RESEARCH METHODOLOGY In this study, the researcher uses the census method in which all members of the population are as sample. Verification method is used to examine the relationship between variables, which is the influence of market attractiveness and the core competence on value creation and competitive advantage and their implications upon business performance of pay TV industry in Indonesia. By using the research method, a significant relationship between the variables studied to produce conclusions that will clarify the picture of the object under study, will be found. The unit of analysis in this research is all business units totaling 19 business units of the company at the pay TV industry in Indonesia. Thus, this research is by census. The unit of observation is is the directors and managers in the Pay TV companies. Each unit of analysis is represented by 3-5 respondents to avoid unwanted bias. The total number of units of observation is 61 people, which consists of 20 directors representing the top management, and 41 managers. Data collected through surveys. The data required in this study is primary data collected through interviews with the management of pay TV in Indonesia to complement and strengthen secondary data. The research instrument uses questionnaire to collect primary data from managers and directors of pay TV. Observation is carried out to obtain more accurate information and to obtain other information which cannot be predicted in advance. Observations are made by examining, reviewing records or reports regarding market attractiveness, core competence, competitive advantage, value creation and business performance of the pay TV companies from different institutions related to the problems to be studied. 3.
RESEARCH FINDINGS Verification analysis was designed to examine the influence of pay TV market attractiveness and the core competence on value creation and competitive advantage and their implications upon business performance by using multiple relationship model among variables, in which information is obtained simultaneously (Malhotra, 2004), so that the analysis techniques quantitatively uses structural equation modeling/SEM. Structural equation modeling (SEM) consists of two types namely covariance-based SEM is often called SEM (structural equation modeling) and variant-based SEM or a component that is often called PLS (partial least square). This statistical technique is used to verify the relationship among the research variable. 3.1 The influence of market attractiveness and core competence onvalue creation either partially or simultaneously. (Hypothesis 1) The relationship between Market Attractiveness and the value creation is0.113; the T value obtained is 2.191, which is greater than 1.96, so that it was significant. The influence formed is 0.1132 or 1.27%.The relationship between Core Competence and Value Creation is 0.774; the T value obtained is 20.647, which is greater than 1.96, so that it was significant. Influence formed is 0.7742 or 59.9%. The influence formed simultaneously by the Market Attractiveness and Core Competence on the Value Creation is 63.60%. The results of the above analysis prove that first hypothesis is accepted, that the market attractiveness and core competence influence value creation either partially or simultaneously.
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Market Attractiveness 0,113 Value Creation
0,635
0.774 Core Competence
Figure 1. The Influence of Market Attractiveness and Core Competence on Value Creation This is in line with the opinion of Cravens and Piercy (2009), which states that the market attractiveness can be measured by market growth rate projections and attractiveness assessments made by management, while Best (2000) argues that a more complete market attractiveness can be measured through market force, competitive intensity, and market access. Companies must identify a suitable competence to create consumer value. Consumer value consists of benefits and cost. In this case Craven and Piercy (2009), emphasizes the management to be able to offer superior value to the consumer by using competence produce value match based on consumer needs (Ketchen, 2009; Knight, 1998 and Mooney, 2007). 3.2 The influence of Market Attractiveness and Core Competence on Competitive Advantage of Pay TV industry in Indonesia. (Hypothesis 2) The relationship between market attractiveness and competitive Advantage is 0.230; the T value obtained is 4.341, which is greater than 1.96, so that it was significant. The influence formed is 0.2302 or by 7.36%.Relationship between core competence and competitive advantage is 0.382; the T value obtained is 6.077, which is greater than 1.96, so that it was significant. The influence formed is 0.3822 or 14.60%. Market Attractiveness
0.230 Competitive Advantage
0,382 Core Competence
Figure 2. The Influence of Market Attractiveness and Core Competence on Competitive Advantage The result of the above analysis proves that second hypothesis is accepted, that the market attractiveness and the core competence give influence to the competitive advantage. The results of the study support the statement of Dawid and Reimann (2010), that the market attractiveness and company primary resource (core competence) can be used as a basis of competitive advantage formulation (Kotler, 2012; Dalborg 1999; Markides and Williamson, 1994). Competitive advantage is formulated from the analysis of core competence and market attractiveness (Bani-Hani and Faleh, 2009; Slater and Narver, 1994; and Luo, 1998) 3.3 The influenceof Value Creation on Competitive advantage of the Pay TV industry in Indonesia. (Hypothesis 3) Relationship between value creation and competitive advantage is 0.498 the T value obtained is 8.384, which is greater than 1.96, so that it was significant. The influence formed is 0.4982 or 24.80%.
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The influence formed by value creation on competitive advantage through is 24.80%. This means that 24.80% of changes in the competitive advantage are affected by changes in market attractiveness and competence core through value creation. The remaining 75.20% is influenced by other factors beyond these variables. The results of the above analysis prove that third hypothesis is accepted, that the market attractiveness and the core competence give influence to competitive advantage either directly or through the value creation.
0,498
Value Creation
Competitive Advantage
Figure 3. The Influence of Market Attractiveness and Core Competence on Competitive Advantage through Value Creation In pay TV industry, the value chain is very complex and requires a large capital investment so that giving the better value for the customers compared to other companies is needed to improve the competitiveness of the company. Relating to the creation of value, Hitt et al, (2009) explains the importance of creating value for customers, lowering costs in building customer value and establishing relatively favorable position to the competition (Sharma, 2001; Parasuraman 1997; and Huber and Hermann 2000 ). This hypothesis is consistent with Pearce and Robinson (2005) theory which states that if in a situation where the company and its competitors have relatively the same resources, the company performance can be generated from the creation of customer value on the market perspective or market-based. 3.4 Influence of Competitive Advantage on Business Performance ofpay TV industry in Indonesia. (Hypothesis 4) Relationship between competitive advantage and business performance is 0.441; the T value obtained is 8.632, which is greater than 1.96, so that it was significant. The influence formed is 0.4412 or 19.45% The influence formed simultaneously by market attractiveness and core competence on competitive advantage through value creation and competitive advantage is 19.45%. This means that 19.45% of changes in the business performance is affected by changes in market attractiveness, competence core and value creation. The remaining 80.55% is influenced by other factors beyond these variables. The results of the above analysis prove that hypothesis 4 is accepted, that the market attractiveness and the core competence give influence to business performance either directly or through the value creation and competitive advantage. Market Attractiveness (X1) - Market strength - Competition intensity - Market access - Akses Pasar
Core Competence (X2) - Resource uniqueness - Knowledge - Capability - Facility - Process
0.230 0.113
Value Creation (X3) ‐ Customer benefit ‐ Customer cost
Competitive advantage (Y) 0.498 ‐ Differentiation ‐ Cost Leadership ‐ Focus
0.774
0.441
Business performance (Z) - Financial perspective - Market perspective
0.382
Figure 4. Influence of Market Attractiveness and Core Competence of the Company Performance through Value Creation and Competitive Advantage Formulation of competitive advantage which is properly implemented will improve business performance (Wheelen and Hunger, 2008; Kaplan and Norton, 1992; Sofyan, 2011; Venkatraman and Ramanujam, 2003; and Olovarietta and
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Friedman, 1999). Competitive advantage is an approach of organizations to compete for winning the competition, getting customers, generating power or creating value from resources or competence available and creating competitive advantage. Table 1. Relationship among Variables Hypothesis H1 H2 H3 H4
Description Relationships between market attractiveness and value creation Relationships between market attractiveness on value creation Relationships between Market attractiveness and Competitive Advantage Relationships core competence and competitive advantage Relationships between Value Creation and business performance Relationship between Competitive Advantage and business performance
T-Val 2.191 20.647 4.341
Description Significant Significant Significant
6.077 8.384 8.632
Significant Significant Significant
Sources: Research Findings, 2013 The company that uses differentiated strategies attempt to gain a competitive advantage based on the uniqueness of the offer. The company develops different goods and/or services from competitors. This strategy requires the power of marketing, research and development, leadership technology and high creativity. Success or failure of this strategy relies on the consumer value creation for the quality and uniqueness of the company's products. This study uses three generic strategies of Porter, which company can use to win the competition in a sustainable manner, namely: 1) differentiation, which attempts to provide unique products and to give added value for customers, 2) cost leadership, which is the lower operating cost, so that the company is operating at a level of efficiency that is better than the competitors. 3) focus, which is an attempt to serve a particular niche market segment, so that the company can perform optimal service to specific markets or specific customer groups (market niche) (Schermerhorn, 2003). 4. CONCLUSIONS Based on the objectives and results of the study can be summarized as follows: Market Attractiveness and core competence give influence to value creation. It proves conformance to the theory which states that the market attractiveness plays significant role in value creation. This can be explained because the market orientation will be obtained through accurate information on the market situation, market forces, the intensity of competition and the ease of market entry. The information in the future is needed in the determination of value creation and competitive advantage. In terms of core competence influence to value creation, it is proved that the core competence is important in determining the success of value creation. Core competence plays a greater role than the attractiveness of the market in value creation. With core competence, company will have the ability to both value creation according to customer needs in the present and future. Furthermore, management can determine the competitive advantage which is needed to produce the expected performance of the company. Value creation gives influence to competitive advantage. This proves the theory that the value creation gives influence to pay TV industry. Appropriate competitive advantage can be determined based on the company's ability to create value for customers and will be determined the right competitive strategy that will have an impact on business performance. Competitive advantage gives influence to the business performance well. This proves that a strategic management theory state that performance highly depends on competitive applies to pay TV industry. Competitive advantage plays a role in determining the performance of the business. This is understandable because the competitive strategy determines the competitive advantage of the company. With the chosen competitive strategy capable of providing the advantages (benefits) are provided to customers than competitors. Referring to result of this research, Pay TV Company is suggested some of the following: 1. Always monitoring changes in the pay TV market attractiveness and build core competence to be able to determine the appropriate competitive strategy is one among the cost leadership strategy, differentiation strategy or focus strategy.
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2. 3. 4. 5.
Performing customer value creation process as basis for competitive advantage. Performing efficiency throughout business processes chain to improve competitiveness. Always innovating in finding potential new pay TV program. Always improving service quality to increase customer loyalty.
REFERENCES Assauri, Sofyan., (2011). Strategic Management: Sustainable Competitive Advantages, Lembaga Manajemen Fakultas Ekonomi UI, Jakarta Bani-Hani, Jehad S. and Faleh, Abdelgader Alhawary., (2009). The impact of core competencies on competitive advantage: strategic challenge, Business Administration International Bulletin EuroJournals, Inc Brandenburger, Adam M. and Harborne W. Stuart, JR.,(1996). Value-based Strategy, Journal of economics and management strategy The MIT Buffet, Warren and Charles T. Munger., (2011). Industry Analysis: The Fundamentals. Prentice Hall. New York Cravens, David W and Nigel F. Piercy.,(2009). Strategic Marketing 9/e, McGraw-Hill Irwin, Dalborg, Hans., (1999).Shareholder Value in Banking, Session of Institute International Detrudes Bancaires, dalam Nyimarahoro and Soshina, Creating and Measuring Shareholder Value Applicability and Relevance in Selected Swedish Companies, International Accounting and Finance Master Thesis,
University of Gotheborg David, Fred R., (2010). Strategic Management 13th edition Dawid, Herbert and Marc Reimann., (2004).Evaluating market attractiveness: individual incentives versus industry profitability, Computational economic,
Kluwer Academic Publisher Hill, Charles and Gareth Jones.,(2007). Strategic Management: An Integrated Approach Hitt, Ireland, & Hoskisson, Strategic Management Competitiveness and Globalization Concepts & Cases.. 8th Edition Eighth Edition. Hardcover 2009 Edition. Huber, Frank and Andreas Herrmann.,(2000). Gaining competitive advantage through customer value oriented management, American Marketing
Association Hunger, J. David and Thomas L. Wheelen., (2010). Essentials of Strategic Management (5th Edition), Prentice Hall Kaplan, Robert and David Norton., (1992). The Balanced Scorecard – Measures that Drive Performance. Harvard Business Review. Ketchen Jr. D.,(2009). 'Strategy 2008-2009'. New York: McGraw-Hill Keys, David., Mumin Azamhuzjaev, James Mackey., (2001). Economic Value Added : A Critical Analysis. The Journal of Corporate Accounting & Finance. Jan/Feb 2001 Knight, James., (1998). Value Based Management, Developing a Systematic Approach to Creating Shareholder Value, USA McGraw Hill Kothandaraman, Prabakar and David T Wilson., (2001). The future of competition, Industrial Marketing Management, © 2001 Elvesier Science Inc. Kotler, Philip., (2012). Marketing Management 14th ed. Prentice Hall Luo, Yadong., (1998). industry attractiveness, firm competence, and international investment performance in a transitional economy, Blackwell publisher
ltd and the board of trusteesof the bulletin of economic research Malhotra, Naresh., (2004). Essentials Marketing Research 2004 Pearson, Prentice-Hall Markides, Constantinos C. and Peter J. Williamson., (1994). Related diversification, Core Competences and corporate performance, Strategic Management
Journal Michael A. Hitt, R. Duane Ireland, Robert E. Hoskisson, Strategic Management: Concepts: Competitiveness and Globalization, 2012 Mooney, Ann, Steven Insitute of Technology Hoboken New Jersey., (2007) Core competence, distinctive competence and competitive advantage: what is the difference? Journal of Education for Business Nyiramahoro, Beatrice and Natalia Sooshina., (2001). Creating and Measuring Shareholder Value, Applicability and Relevance in Selected Swedish Companies, International Accounting and Finance Master Thesis,Gotheborg University Olovarietta, Sergioand Roberto Friedmann., (1999). Market-oriented culture, knowledge-related resources, reputational assets and superior performance: a conceptual framework, Journal of Strategic Marketing Parasuraman., (1997). Reflection on gaining competitive advantage through customer value. Academy of marketing science, Journal spring Pearce II, John A and Robinson, Jr., Richard B., (2005). Strategic Management, McGraw-Hill Porter, Michael., (1996)What is Strategy?Harvard Business School Press, Prahalad, C.K. and Gary Hamel., (1990).The core competence of the corporation, Harvard Business Review Sharma, Arun., and R Krishnan, Dhruv Grewal., (2001). Value Creation in markets, Industrial Marketing Management, © 2001 Elseviere Science Inc. Slater, Stanley F. (1997). Developing a customer value based theory of the firm, Academy of marketing science. Journal Slater, Stanley F. and John C. Narver, (1994) Market orientation, customer value and superior performance, Business Horizons Thompson, Arthur A., Strickland, A. J., Gamble, John E., Crafting and executing strategy, McGraw-Hill International Edition, Seventeenth Edition, 2010 Venkatraman, N., and Vasudevan Ramanujam.,(2003) Measurement of Business Performance in strategy research: A Comparison of approaches, The
Academy of Management Review Wheelen, Thomas L., Hunger, David, (2008). Strategic Management and Business Policy: Concepts and Cases/Prentice Hall. Yamin, Sofyan and Heri Kurniawan, Partial Least Square Path Modelling, Salemba Infotek, Jakarta 2011
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The Role of Consumer Psychology and Characteristics in Buying Decision Process of CDMA-Based Gadget Hendrik Purnama, Indira Rachmawati Fakultas Ekonomi & Bisnis, Telkom University, Bandung, Indonesia email: [email protected]; [email protected]
Abstract
This research focuses its attention on empirical support for the role of consumer psychology and consumer characteristics in buying decision of code division multiple access (CDMA)-based gadget. Consumers’ perspectives were collected using probability random sampling with 40 questionnaire items distributed to 400 respondents in Bandung, Indonesia, and it was proceeded by structural equation modeling. In addition, this study was aimed to explain why consumers chose this product rather than other competitors. It was found that consumer psychology influenced consumer buying decision process by 55% and consumer characteristics influenced consumer buying decision process by 33%. Memory was the highest dimension in consumer psychology, i.e. 82%, while culture and social dimensions had the same value, i.e. 83% in consumer characteristics. This finding along with the arguments of research contributions and suggestions for future research in academicians and practitioners are presented in this paper. The crucial implication of this research is the practitioners have to learn the organization for competitive advantage by focusing on the consumer self-concept and consumer lifestyle based on consumer psychology.
© 2014 Hendrik Purnama, Indira Rachmawati. Published by Telkom Pub. Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia. Keywords: Consumer Psychology, Consumer Characteristics, Buying Decision Process, Cdma-based gadget, Indonesia.
1. Introduction Technological developments in Indonesia are currently experiencing rapid progress. From the point of view of the changes in technology, economics and culture make telecommunications in Indonesia an important factor in the economic development in general. In addition to the large population and significant economic growth will lead to higher demand for telecommunications services. The development of telecommunication technology currently is offset by the development of mobile technologies which makes people follow the trend of changing gadgets. The trends have an impact on consumer lifestyle changes in using telecom operators to fulfill the needs or desires (www.republika.co.id/berita/jurnalisme-warga, 2012). Nowadays, the price of SIM card is getting cheaper so that most of consumers have more than one gadget. However, it varies inversely with SIM card-based cdma, one of which is Telkom Flexi from PT. Telkom Indonesia. Based on Telkom annual report (2012), Telkom Flexi has conducted promotional campaigns 'Flexi-Free Talk' but there were no significant changes with the addition of consumers’ numbers; if consumers of TelkomFlexi decrease, it will result in a loss to the company and will become a problem to be immediately fixed.
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Table 1 Indonesia CDMA Consumer’s 2010 – 2014 Years Telecommunication Operators 2010 2011 2012 2013 TelkomFlexi 18.1 million 14.2 million 16.8 million 11.6 million Esia 11 million 14.7 million 11.6 million 11.7 million Smartfren 7.55 million 11 million 12.5 million (http://statistik.kominfo.go.id/site/data?idtree, Oct 2014)
2014 4 million 12.3 million 15 million
This paper discusses many factors that influence consumer behavior in choosing a product or service, including: consumer psychology and consumer characteristics (Kotler & Keller, 2012). 2. Conceptual Framework
2.1. Theoretical Concepts Academic research gives support to the important role of marketing stimuli in building consumer behavior while consumer behavior has become one of indicators of success in consumers’ purchase decision. Marketing managers need to consider consumer behavior in order to design effective marketing programs. An important behavior to be observed is purchase behavior, especially the motives and reasons behind this activity (Lysonski & Durvasula, 2013).
2.1.1 Consumer psychology Barber et al. (2012) had measured consumer psychographics to assess purchase intention and actual purchase. The empirical finding stated that there was a wide gap between the willingness to pay and the actual purchase. Sproles and Kendall (1986) in Lysonski and Durvasula (2013) believed that consumers’ decision making were influenced by psychological or mental orientation. This statement was supported by Fill (2009) who declared that buying decisions are influenced by consumers’ psychology.
2.1.2. Consumer characteristics Josiassen et al. (2011) had done the research to clarify the influence of demographic consumer characteristics on buying intention. The study showed that consumer income, consumer gender, and consumer age were the antecedents of consumer ethnocentrism intervening the willingness to buy. On th other hand, Oliver and Lee (2010) argued that the intention to purchase was shaped by cultural and social factors. Fikry and Bustami (2009) indicated the impact of gender and product importance on decisions making. Thus, it can be concluded that consumer psychology and consumer characteristic play a role in consumers’ buying decision process.
2.1.3. Buying decision process Hsieh et al. in 2004 reported an empirical research finding about the relationships between brand image and brand purchase behavior, taking into consideration socio demographics and national cultural characteristics as moderator variables between product-brand image and brand purchase behavior. Villas-Boas (2004) considered a model in which consumers learned about the product they bought in the first period, and then in the second period, they made choices/preferences about the competing products that had been given in the first period. Tsai (2005) described that repurchase intention behavior was influenced by the types of brand purchase value that were anteceded by the constructs of perceived image, emotional experience, perceived quality, and price acceptability.
2.1.4. Research framework The research framework in this study followed the Kotler’s model of consumer behavior (2012: p.202) which states that consumer psychology and characteristics simultaneously and partially influence consumers’ buying decision.
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Consumer Psychograpic Motivation (P1) Perception (P2)
Buying Decision Process
Learning (P3) Memory (P4)
Need recognition (PK1) Information search (PK2) Evaluation of alternative (PK3)
Consumer Characteristics
Purchase decision (PK4)
Cultural (K1)
Post purchase behavior (PK5)
Social (K2) Personal (K3)
Fig.1. The research framework
2.2. Methodology and Data A cross sectional survey was conducted for collecting primary data. The reason to use cross sectional study is because it was assumed that consumer behavior was relatively stable overtime so that there was little necessity to study the development of purchase behavior. A Structural Equation Model requires a minimum sample size of 5-10 x items (Hair et al., 2006). Primary data used were taken through simple random sampling technique by distributing 40 questionnaire items towards 400 respondents in Bandung, Indonesia. Respondents were taken from the customer data of Telkom Flexi – PT. Telkom Indonesia
2.3. Empirical Evidence
2.3.1. Overall model fit H0: There is no difference between the theoretical model and the empirical findings. H1: There is a difference between the theoretical model and the empirical findings. The purpose of the testing is to accept H0, based on the fit index values that should be compared with the cut-off value (revenue limit). Table 4.1 indicated that the model has good fit value, means that there is no difference between the theoretical model and the empirical findings. Table 2 Goodness of Fit
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2.3.2. Structural equation model In the analysis of structural model analysis, T-value indicated that there is a relationship between endogenous latent variable and exogenous latent variable if the value is > 2.
Fig.2. T-value structural model
Fig.3. Model structural standardized solution
H1: Consumer psychology has a significant relationship with buying decision process.
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The Role of Consumer Psychology and Characteristics in Buying Decision Process of CDMA-Based Gadget
Based on the empirical findings that can be seen in Figure 4.1 and Figure 4.2, it can be interpreted that H1 is accepted because the t-value obtained was 5.58 where the requirement applies t-value > 2. The estimated coefficient is 0.55 which means consumer psychology influenced buying decision process by 55%. Memory was the highest dimension in consumer psychology by 85%.
H2: Consumer characteristics have a significant relationship with buying decision process. Figure 4.1 and Figure 4.2 show that H2 is accepted because the t-value obtained was 3.57 where the requirement applies t-value > 2. The estimated coefficient was of 0.33 which means consumers’ psychology influenced their buying decision process by 33%. Culture and social have the same value, i.e. 83% in consumers’ characteristics.
2.3.3. Analysis According to the results of the data processing using the SEM it can be seen that consumer psychology (i.e. motivation, perception, learning and memory) and consumer characteristics (i.e. cultural, social, personal) are proved to have a significant impact on the buying decision process of Telkom Flexi. Results of this study support the principle of Schiffman and Kanuk in Fredereca and Chairy (2010) which stated that consumer psychology provides the basic concepts of psychology that determine individuals’ behavior and influence their purchasing behavior. In other words, Kotler and Keller (2012) indicated the task of the marketer is to understand what occurs in the consumer mind, between the arrival of the outside marketing stimuli and the final purchase decision. Four important psychological processes: motivation, perception, learning and memory fundamentally affect consumer responses to various marketing stimuli, while the other three important characteristics are cultural, social, and personal Consumer psychology influenced buying decision process by 55%. and consumer psychology influenced buying decision process by 33%, while the rest might be influenced by the others marketing stimuli, such as: products & services, price, distribution, communications, economic, technological, and political (Kottler & Keller, 2012). Consumer psychology consists of motivation, perception, learning, and memory. Kottler & Keller (2012) believed that one of marketing missions is to make sure consumers have the right types of product and services to create the right brand knowledge structures and maintain them in memory. This statement supported the study result which confirmed that memory was the highest in consumer psychology. Consumer characteristics consist of cultural, social, and personal. The result of the study indicated that personal factor was the lowest in the consumer characteristics, while cultural and social factor had the same value. This result is supported by Belch & Belch (2003) which declared that cultural factors (i.e. culture, sub culture, and social class) are particularly important influences on the consumer buying behavior. Culture is the fundamental determinant of consumers’ attitude and behavior. On the other hand, social factors (i.e. reference groups, family, and social roles & statuses) affect consumers’ buying behavior. In addition to social factors, the power of opinion leader in a social community played a major role in persuading activities. The other result of (Nurbaiti, Putri, Eka, Novianty, 2007) consumer purchase behavior factors (i.e. cultural, social, psychological) indicated that social factors are what most influence the purchase decision (has a great influence) whilst the other factors (i.e. cultural, personal, psychological) do not significantly affect the purchasing decisions of TelkomFlexi (having little effect). Cultural, social, personal and psychological factors have a positive relationship and have ranged from the lowest influence to the greatest (0.2 - critical value (1.96), received in another case (H1) [12]. Table 4. Statistical Hypothesis Testing Loading Estimation (ɣ) Knowledge Sharing Influence To Absorptive 0.46 Capacity (Hypothesis 1) Absorptive Capacity Influence To Innovation 0.74 Capability (Hypothesis 2)
Hypothesis 1 2
Percentage (%)
Significance (t statistic)
21.16
3.84
54.76
12.96
 Hypothesis 1: H0: There is no significant influence of Knowledge Sharing to Absorptive Capacity H1: There is a significant influence of Knowledge Sharing to Absorptive Capacity Based on the test criteria, concluded that H0 is rejected because the t-statistic (3.717) > critical value (1.96). It can be concluded that there is a significant influence on the Absorptive Capacity of Knowledge Sharing. Knowledge Sharing has a total positive direct effect on Absorptive Capacity of 0.46 or 21.16%. A percentage of 78.84% is influenced by other variables that are not described in the model.  Hypothesis 2: H0: There is no significant influence of Absorptive Capacity to Innovation Capability H1: There is a significant influence of Absorptive Capacity to Innovation Capability Based on the test criteria, concluded that H0 is rejected because (12.701) > critical value (1.96). It can be concluded that there is a significant influence of the Absorptive Capacity on the Innovation Capability. Absorptive Capacity has a total positive direct effect on the Innovation Capability of 0.74 or 54.76%. A percentage of 45.24% is influenced by other variables that are not described in the model. 6. Conclusions Based on the result and analysis of structural equation model, this paper shows the influence of knowledge sharing on the absorptive capacity and innovation capability. There is significant influence of the Knowledge Sharing to Absorptive Capacity and Absorptive Capacity to Innovation Capability of Y Generation on non-Study Program in Telkom University. Knowledge Sharing has a total positive direct effect on Absorptive Capacity of 0.46 or 21.16%, whereseas Absorptive Capacity has a total positive direct effect on the Innovation Capability of 0.74 or 54.76%. It can be seen from the value of
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the t-statistic in testing hypothesis with the critical value of more than 1.96 and the value of total positive direct it can be stated from loading estimation (ɣ).
References [1] Bartol, K. M., & Srivastava, A. (2002). Encouraging knowledge sharing: The role of organizational reward systems. Journal of Leadership and Organization Studies, 9 (1), 64-76. [2] Cohen, W. M. and Levinthal, D.A. (1990). Absorptive Capacity: A New Perspective on Learning and Innovation. Administrative Science Quarterly, 35 (1): 128-152. [3] Gravett, Linda and Robin Throckmorton. (2007). Bridging the Generation Gap: How to Get Radio Babies, Boomers, Gen Xers, and Gen Yers to Work Together And Achieve More. USA: The Career Press. [4] Hair, Joseph F., Anderson, R.E., Tatham, R.L., and Black, W.C., 2006. Multivariate Data Analysis, 6th eds, Prentice Hall International. [5] Hira, N. A. (2007). You raised them, now manage them. In Fortune, May 28, pp. 38-47. [6] Hooff, Van den and Weenen, F.L. (2004). “Committed to Share: Commitment and CMC Use as Antecedents of Knowledge Sharing.” Knowledge and Process Management, Vol. 11, No.1, pp.13–24. [7] Knudsen, Hannah K. and P.M. Roman. (2004). Modeling the use of innovations in private treatment organizations: The role of absorptive capacity, Journal of Substance Abuse Treatment 26. pp. 353–61. [8] Liao, S., Fei, W. & Chen, C 2007, Knowledge sharing, absorptive capacity, and innovation capability: an empirical study of Taiwan’s knowledge intensive industries’, Journal of Information Science, 33 (3) pp. 340–359. [9] McLester, S. (2007). Technology literacy and the My Space generation. Technology and Learning, pp. 17-22. [10] Quinn, J.B., P. Anderson and S. Finkelstein. 1996. Managing Professional Intellect: Making The Most Of The Best, Harvard Business Review 74, pp. 71–80. [11] Jöreskog, Karl G. and Sorbom, D. (1996). LISREL 8: User’s Reference Guide. Scientific Software International, Inc., Chicago. [12] Kwong, Ken and Kay Wong. (2013). Partial Least Squares Structural Equation Modelling (PLS-SEM) Techniques Using SmartPLS. Marketing Bulletin, 2013, 04, Technical Note 1. [13] Zahra, S.A., and George, G., 2002. “Absorptive Capacity: A Review, Reconceptualization, and Extension.” Academy of Management Review, Vol. 27, pp. 185-203.
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Knowleedge Shaaring Inffluence oon Abso orptive Capacity C and Inn novation C Capabilityy in Bab by Boom mers Gen neration and X G Generatio on at Telkkom Uniiversity a Diiska Nur Anggraeni A , Luciana Anndrawinab, A Amelia Kurrniawatic, N Nia Ambarsaarid a.b,c d
Indu ustrial Engineering ng, Telkom Univeersity, Bandung, Indonesia I Infor ormation System, Telkom Universiity, Bandung, Ind donesia
Abstract A In n the developm ment of educatiional service providers p that iis growing rapidly, excellent service, futuree prospects, an nd innovation are a reequired in orderr to excel in thee competition. Telkom T Universsity as an educaation provider which w recently uunderwent a naame change neeeds an n extra effort too better the traansformation ass supported by quality system m and strongly-ccommitted hum man resources, hence h good woork prrocess from the staff and knnowledge buildiing which becoomes an asset of paramount importance inn an organizatio on are absoluteely neecessary. Know wledge from eacch staff can be collected and sstored in order for it to be sharred with the ent ntire elements in n the organizatiion so o as to improvee the work process and ensure that innovationn can be created d by everyone, regardless of pposition. This reesearch is focussed on n baby boomerrs and X generration in the process p of know wledge sharing g conducted at Telkom Univeersity. From kn nowledge shariing prrocess, the leveel of organizatioonal and individ dual capability of absorbing new n knowledge both from interrnal and extern nal environmentt is laater determinedd. The ability to t absorb know wledge can connstruct a motiv vation in a worrk system in oorder to increasse the value off a co ompany, and thhus questionnairres are distributted to staff of suupporting unitss at Telkom Uniiversity to learnn of the processs. After the dataa is gaathered, data iss processed usiing PLS method to test its vaalidity and reliaability, measuree the structurall model and peerform hypothesis teesting on the innfluence betweeen the variablees. The result oof the data pro ocessing can bee used to learnn of the significant influence of kn nowledge sharinng on absorptivve capacity and the influence oof absorptive caapacity on innov vation capabilitty.
© 2014 Diska N Nur Anggraenni, Luciana An ndrawina, Am melia Kurniaw wati, Nia Ambaarsari. Publishhed by Telkom m Pub. Ltd. Selection and ppeer-review unnder responsib bility of The IISCLO, Deparrtment of Com mmunication, U University off Telkom, 203442 Bandung, B Indonesia. Keywords: K Absoorptive capacityy; baby boomerrs generation; innnovation capab bility, knowledge sharing, PLSS method, X geeneration.
Introductioon Competitive advantages to achieved by the organnization is not enough to rely r on the ab ability of the existing or juust prrovide traininng to improvve skills, but now organizzation also need to consid der how the value of kno owledge in the t orrganization an and how know wledge can be b shared witth all elemen nts in the com mpany (know wledge sharing g) so the cossts co ompanies cann be minimizeed [1]. In proccess of knowlledge sharing can not be denied d will enncounter somee obstacles. The prrocess of know wledge sharinng could be bu umped to diffe ference in the generation or age. Such diffferences classsified accordinng to o the year of bbirth to 4 gennerations are The T Traditionaalist (1930-19 945), Baby Bo oomers (19466-1964), X Geeneration (1966519 976) and Y G Generation (19977-1990) [2]]. Each generration have diifferent habitss and attitudess that can leaad to conflict so neeeds a proper strategy to brridge the generation gap so knowledge caan be shared and a sustainablee. After a proocess of know wledge sharing g, next level oof the organizzation or indiv vidual ability is to absorb new n knowleddge th hat determaineed by absorpttion owned by y each, individdual or organiization (absorrptive capacityy) which is an n organizationn’s ab bility to identiify the value of new inform mation, assimiilate, and utiliize the knowleedge of externnal environmeents. Absorptiive caapacity consissts of two are Potential Abssorptive Capaacity (PAC) an nd Realized Absorptive A Caapacity (RAC)). In the conteext
1.
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of the individual, absorptive capacity, and motivation into an ability to obtain external knowledge as well as the ability to use knowledge to innovate. Innovation is the intentional introduction and application within the organization of ideas, process, products or procedures will distributed to relevant units to be designed so significantly helpful for the individual, group, organization or wider society. Innovation can be divided into three categories are product innovation, process innovation, and managerial and system innovation. Telkom University ratified on 21 August 2013 made this university have to hard work to change from all aspect so educational institutions can be on part with other leading university in Indonesia and international. During the rapid business changes and more better, Telkom University requires superior human resources to fill every division and strive to continue learn in order to run the system remains aligned with the objectives to be achieved. Telkom University certainly has the human resources consisting of various ages ranging from young age to old age. The presence of such an age difference causing the gap between generations ranging from the pattern of thinking, way of working up a response to new knowledge. Previous research discusses about the relationship of knowledge sharing and absorptive capacity explains that the ability to absorp knowledge has a major influence on the instituion’s ability to innovate [3]. In another study stated in a case study in an insurance company that differences in perception and the social character of labor between generations could result in the loss of knowledge within an enterprise. When employess hiring back retired so threatened loss of knowledge [4]. Based on the problems and references above it is necessary to study ways and means used to perform knowledge sharing so as to know the level of absorptive capacity to see the innovation capability of an organization by using the questionnaire method according to the operational rules of the bloom (bloom taxonomy). Therefore, the present study will discuss about relationship of knowledge sharing, absorptive capacity, and innovation capability that focuses on baby boomers generation and X generation at Telkom University. In the research study method used PLS (Partial Least Square) to model the influence between factors by taking the data staff at Telkom University. The objectives of this study are : a. To identify the effect on the absorptive capacity of knowledge sharing on the baby boomers generation and X generation at Telkom University. b. To identify the influence of absorptive capacity on the level of innovation capability on the baby boomers generation and X generation at Telkom University. 2. Methodology 2.1 Research Design The study begun with field studies and literature to form the background of the problem, formulation of the problem and research objectives are also supported predecessor studies. From the initial identification stage conceptual model can be made to determine the identification of the variables in the study of the effect of knowledge sharing, absorptive capacity, and innovation capability for the baby boomers generation and X generation. Of the variables, the study is seen to operational variables : knowledge donating, knowledge collecting, potential absorptive capacity which has a capacity of sub-dimensional acquisition and assimilation, realized absorptive capacity which has a sub-dimensional transformation and exploitation, process innovation, and system and managerial innovation. Selection of the research model using supporting unit staff population at the Telkom University there are 13 supporting units with a number of 80 respondents and for the repondents in the baby boomer generation and X generation are 32 respondents. After obtaining the research variables then perform hypothesis scheme, identifying indicators of each variable as well as the identification of methods and means of data collection using survey methods and data collection tools using a questionnaire with a preparation based taxonomy bloom. 2.2 Data Analysis After the questionnaires were developed based on the variables to be studied, the collection of data using simple random sampling with data processing using SmartPLS 2.0 to test the measurement model and the structural model and the test hypothesis test.
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Knowledge Sharing Influence on Absorptive Capacity and Innovation Capability in Baby Boomers Generation and X Generation at Telkom University
3. Result and discussions This study uses the PLS method steps include evaluation of the measurement model with Confirmatory Factor Analysis (CFA) for testing the items on the variables in the model, the evaluation of the structural model, and hypothesis testing loading wear estimation (gamma). Here is a hypothetical scheme of research described in Figure 1. Knowledge Donating
H1 Knowledge Sharing
H2 Absorptive Capacity
Process Innovation
Innovation Capability
Knowledge Collecting
Managerial and System Innovation
Acquisition
Assimilation
Transformation
Exploitation
Fig.1. Scheme of Research Hypothesis From the hypothesis scheme hypotheses between variables can be determined as follows: Hypothesis 1 : Knowledge sharing influence of the absorptive capacity on baby boomers generation and X generation. Hypothesis 2 : Absorptive capacity influence of the innovation capability on baby boomers generation and X generation. Respondents were employees of the supporting units at Telkom University. Method of determining the sample using simple random sampling technique. Questionnaires carried out on 13 units with a total population of 80 staff, will then be carried out confirmatory factor analysis modeling to look at the validity and reliability of measurement instruments for each variable and construct the structural equation model to analyze the effect of exogenous variables on endogenous variables. The analysis procedure is performed for all variables existing constructs and effect of the proposed models, namely the model influence the ability to share knowledge (knowledge sharing), the ability to absorb knowledge (absorptive capacity), and innovation capability. The data obtained from the questionnaires were 80 questionnaire with 32 respondents who can qualify for respondent characteristics analysis, descriptive analysis, CFA, and PLS. Data processing is first analyzed the characteristics of respondents to see the characteristics of the respondents in this research. Here are the characteristics of the respondents are described in Table 1. Table 1. Respondent Characteristics Analysis No
Respondent characteristics variable
1
Sex
2
Year of birth
3
Unit
4
Long worked in unit (month)
383
Total Percentage (person) (%) Male 43,75 Female 56,25 1946‐1964 12,5 1965‐1976 87,5 Perpustakaan 18,75 SPM 9,38 PPM 3,13 Int.Office 6,25 BPA 6,25 Marketing 6,25 SAI 6,25 SISFO 0 SDM 9,38 Sekpim 9,38 Pusat Bahasa 15,63 Logistik 3,13 Keuangan 6,25 0 ‐ 3 18,75 3 ‐ 6 6,25 6 ‐ 9 9,38 >=9 65,63
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After the initial recap, then analysis of research data statistically using partial least square analysis to test and explore models based on a clear theory. Influence between latent variables in this study are summarized in the research objectives can be answered through the analysis of partial least square. Data processing using statistical software SmartPLS 2.0 to produce output that describes the results of the analysis of Partial Least Square (PLS). First, performed confirmatory factor analysis is to test the validity and reliability of the measurement model is a model that is reflective measurement or reflective outer models show the manifest variables or observed variables represent the latent constructs to be measured by testing the validity and reliability of the indicators forming the latent constructs through confirmatory factor analysis [5]. It is to see the construct or latent variables are investigated appropriately and consistently can be explained by the indicators are conceptualized. In testing the CFA are exogenous variables that cause variable, a variable that is not influenced by other variables. Exogenous variables effect of other variables. In the path diagram, these exogenous variables explicitly marked as variables that no single arrow headed towards. Endogenous variable is the effect of exogenous variables. Variables in the path diagram is characterized by the presence of why an arrow toward it. Endogenous variables can be further divided into two, namely the endogenous variables that applies as between the endogenous variables and the endogenous variables that applies as the dependent variable. CFA test results can be seen in Table II below. Table 2. CFA Exogenous Constructs Valid
Construct Eksogen
Dimension
Knowledge Donating Knowledge Sharing
Knowledge Collecting
Manifes item1 item5 item21 item17 item18 item14 item10 item2 item22 item15 item11 item12 item4 item8 item20
384
Loading Factor 0,523 0,555 0,079 0,492 0,540 0,153 0,658 0,464 0,670 0,647 0,625 0,701 0,360 0,419 0,602
Result Valid Valid Valid Valid Valid Valid Valid Valid Valid Valid Valid Valid Valid Valid Valid
CR
0,815
0,841
Knowledge Shar aring Influence onn Absorptive Capaacity and Innovattion Capability inn Baby Boomers Generation G and X Generation at Telkom T Universityy
Table 3. CFA A Endogenou us Constructs Valid V
Validity V of thee test results showed that alll items have a valid questiion because itt has a coefficcient weightin ng factor (facttor lo oading) for eaach item of thhe question no n less than 00.50. Meanwh hile, based on the results oof Construct Reliability R (CR R) grreater than 0.70 and considered the value of the facttors of each element e using g the guidelinnes from Hair et al about the t reelative importtance and signnificant of thee factor loadinng of each iteem, stating that the elemennts of the (λ) ≥ 0.50 declarred in nvalid and deeclared value of compositee reliability reeliable if CR> > 0.7 [6]. This suggests thhat the ability y of knowleddge sh haring has a vvalid and reliiable. The CF FA to test ressults on itemss that measure the ability of endogenou us constructs of ab bsorptive capaacity and innoovation capability, test the vvalidity of thee results obtained indicate tthat all the items have a vallid qu uestion becauuse has coeffficient weigh hting factor ( loading facto or) for each of o the questioon items not less than 0.550. Meanwhile, M baased on the ressults of Constrruct Reliability ty (CR) greateer 0.70. The next step is to moddel the structu ural hypothesiis eta is the an nswer to the problem of thee proposed ressearch. The firrst sttructural equaation models too explain the influence of kknowledge shaaring to absorrptive capacityy, while the seecond structurral eq quation modeel to explain the effect off variable ab sorb ability knowledge k (aabsorptive cappacity) ability y to innovatioon caapability. Herre's an explanaation on the sttructural modeel of the study y. A. A Outer Modeel Outer O model iss a descriptionn of the relatiionship betweeen constructss with the indiicator. Measuurement model describing the t reelationship bettween the connstruct to the indicators desccribed in the form f of matheematical equattions. B. B Inner Modell In nner models contains the strructural description of the iinfluence of th he underlying inter-construcct the research h model.
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Figg.2. Inner Mo odel In nner model is basically a paart of the model that describbes the relation nship of the laatent variabless are related. H are the reesults of hypoothesis testing. The third step is testingg the hypothessis put loadingg estimation. Here Structural Equaation 1 The T first structtural equation model to exp plain the effecct of the ability y to share kno owledge (know wledge sharin ng) the ability to ab bsorb knowleddge (absorptivve capacity).
 1 = γ 1*  1 +ζ 1  1 = 0.712*  1 + 0.1066 Structural Equaation 2 The T first structtural equationn model to ex xplain the effe fect of the abiility to absorb b knowledge (absorptive capacity) c on the t ab bility to innovvate (innovatioon capability).
 2 =  1 *β + ζ 2  2 = 0.683*β
+ 0.123
Specification:

= Latent enddogenous variiables

= Latent exoogenous variaables
 1 = Variable endogenous latent l ability to absorb know wledge (absorrptive capacity y)
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 2 = Variable endogenous latent ability to innovate (innovation capability)
 1 = Variable exogenous latent ability to share knowledge (knowledge sharing) γ = Coefficient between the latent exogenous variables to the endogenous latent variables β = Coefficient between the two endogenous latent variables ζ = Structural Errors From the structural model, the latent variable ability to share knowledge (knowledge sharing) the ability to absorb knowledge (absorptive capacity) has a significant influence amounted to 0.712 or 50.70%. Meanwhile, it can also see that the latent variable ability to absorb knowledge (absorptive capacity) on the ability to innovate (innovation capability) has a significant effect also was 0.683 or 46.65%. The third step is testing the hypothesis put loading estimation. Here are the results of hypothesis testing. Table 4. Hypothesis Testing Hypothesis Testing
Path Coefficient
Significance (t statistic)
1
Knowledge sharing influence of the absorptive capacity on baby boomers generation and X generation
0,712
6,1609
2
Absorptive capacity influence of the innovation capability on baby boomers generation and X generation
0,683
5,4474
Hypothesis 1: H0: There is no significant effect of the knowledge sharing to the absorptive capacity H1: There is a significant influence of the knowledge sharing to the absorptive Capacity Test criteria: Based on the test criteria, reject H0 if t statistic> critical value, which means there is a significant effect of the variables studied. Based on the test criteria, it can be concluded that H0 is rejected because the t statistic (6.717)> critical value (1.96). Thus, it can be concluded that there is a significant influence of the knowledge sharing to bsorptive capacity, total direct influence knowledge sharing capabilities of absorptive capacity by 0.712 or 50.70%, in other words the ability to absorb knowledge latent variables positively influenced by the ability to share knowledge by 50 , 70%. The remaining amount of 49.30% is influenced by other variables that are not described in the model. Hypothesis 2: H0: There is no significant effect of absorptive capacity on innovation capability H1: There is a significant influence of absorptive capacity on innovation capability Test criteria: Based on the test criteria, reject H0 if t statistic> critical value, which means there is a significant effect of the variables studied. Based on the test criteria, it can be concluded that H0 is rejected because the t statistic (5.516)> critical value (1.96). Thus, it can be concluded that there is a significant effect of absorptive capacity on innovation capability. Total direct influence on the ability to absorb knowledge innovation capability of 0,683 or 46.65%, in other words the ability to innovate latent variables positively influenced by the ability to absorb knowledge by 46.65%. The remaining amount of 53.35% is influenced by other variables that are not described in the model.
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Table 5. Outer Model Hypothesis Testing Absorptive capacity ‐> Acquisition Absorptive capacity ‐> Assimilation Absorptive capacity ‐> Exploitation Absorptive capacity‐> Innovation capability
Original Sample Standard Standard T Statistics Sample (O) Mean (M) Deviation (STDEV) Error (STERR) ( O/STERR ) 0,958 0,9606 0,0133 0,0133 72,1642 0,918 0,9282 0,0186 0,0186 49,3488 0,9466 0,9505 0,0155 0,0155 61,1146 0,6829
0,702
0,1254
0,1254
5,4474
Absorptive capacity ‐> Transformation
0,9269
0,9334
0,0153
0,0153
60,611
Innovation capability ‐> Managerial and system innovation
0,986
0,987
0,0056
0,0056
177,6299
0,9881
0,9886
0,0049
0,0049
199,6723
0,7442
0,7505
0,1208
0,1208
6,1609
0,9271
0,9329
0,025
0,025
37,0462
0,971
0,971
0,0132
0,0132
73,5084
Innovation capability ‐> Process innovation Knowledge sharing ‐> Absorptive capacity Knowledge sharing ‐> Knowledge donating Knowledge sharing ‐> Knowledge collecting
In testing hypotheses derived from the model showed that the outer dimensions of knowledge sharing is the dominant (seen from T Statistics) is a knowledge donating (73.5084) in the form of activities to provide knowledge directly. Knowledge donating this means that the individual is more like face-to-face during the discussion and exchange of knowledge. As for the dimensions of the absorptive capacity is positively influencing the intensity acquisition in identifying and acquiring knowledge from outside, in other words that individuals would rather acquire new knowledge deeper than examine its existing knowledge so as to produce better innovation. For dimensions and managerial innovation process and system innovation has significant influence in building innovation capability. Of dimensions that exist in the innovation capability variables, factors or dimensions is the most dominant process innovation is an improvement and development of services / processes so that from the information that has been held, the staff is more thinking to be able to improve the process, so it can efficiently operational charge on the unit. 4. Conclusion The research was conducted on the individual as the unit of analysis. Respondents consisted of 32 respondents who are employees of Telkom University. The results of data processing can answer four predefined problem formulation so as to lead to the conclusion: 1.
2.
There is a significant influence of shared knowledge (knowledge sharing) the ability to absorb knowledge (absorptive capacity) with a variable positively influenced by knowledge sharing by 50.70%. So that the baby boomers generation and X in supporting unit of Telkom University, knowledge sharing has influence and the role of absorptive capacity to form employee. For constructive dimension to knowledge sharing, the knowledge donating and collecting knowledge on variables with significant influence in building knowledge sharing. Of dimensions that exist, the most dominant dimension is donating knowledge. Dimensional acquisition, assimilation, transformation, and exploitation in the absorptive capacity variables have a significant influence in the variable influence of absorptive capacity. Of dimensions that exist in the absorptive capacity variables, the most dominant dimension is acquisition. There is a significant influence on the ability to absorb knowledge (absorptive capacity) on the ability to innovate (innovation capability) with positively influenced by variables of knowledge sharing by 46.65%. So that the baby boomers generation and X generation in supporting unit of Telkom University, absorptive capacity has a role to influence and shape the innovation capability of employees. In the dimension of the innovation capability and
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managerial dimensions of process innovation and system innovation has significant influence in building innovation capability. Of dimensions that exist in the variable innovation capability, the most dominant dimension is process innovation. References [1] Novianto O , Dewi Puspasari. Knowledge Management System Implementation in a Company with Different Generations: A Case Study. 2012. [2] Gravett, Linda, Robin Throckmorton. Bridging the Generation Gap: How to Get Radio Babies, Boomers, Gen Xers, and Gen Yers to Work Together And Achieve More. USA: The Career Press; 2007. [3] J, Barney. Journal of Management 17.1991. [4] Zahra, S.A, George G. Absorptive Capacity: A Review, Reconceptualization, and Extension. Academy of Management Review, Vol. 27; 2002, p. 185203. [5] Imam Ghozali, Hengky Latan. Partial Least Squares : Konsep,Teknik dan Aplikasi Menggunakan Program SmartPLS 2.0.2012. [6] Hair,J.F.,Anderson,R.E.,Tatham,R.L., Black, W.C. Multivariate Data Analysis,6th eds,Prectice Hall International. 2006.
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M Messages s from thhe Front: A personal view ew P Peter Wood ds Knowledge Mannagement Centre, Faculty of Creattive Multimedia, Multimedia Univ versity, Cyberjaya ya 63100 Malaysia ia email:: [email protected]
In ntroduction This T is a personnal view of soome issues thaat new knowleedge managerss face. I am offten asked thee following list of questions: Where W to start?? Should we do d an audit? What W should w we measure? How? H Is there a ready-madee solution? What W software do d we w need? What informatioon will we co ollect? Shouldd we apply KM K systems//applications/ practice thro ough the whoole co ompany? An iindividual deppartment? Wh hat will it cosst? What will be the expected return on th that investmen nt? How can we w peersuade top m management too invest? Is theere anything ffor free? I would also addd that the ansswers to these questions aree expected for free. Current C KM ffocus My M own KM rresearch is cuurrently conceentrated on M Malaysian Cultture & Heritage, developinng multimediaa rich metadatta. The T aim is botth to conservee the compreh hensive archivve for academ mics, studentss and the geneeral public. The T archive allso in ncludes oral hhistories particcularly of crafftsmen and woomen, whose knowledge will w ‘evaporatee’ in the near future as manny arre very old. Arising A from thhis study we are a embarking g on developinng a Malaysiaan Post-Merdeeka (Independdence) Architeectural Heritaage Digital D Atlas cconjunction with w Universitti Malaya. W We lose our architectural a heritage h throuugh carelessneess and lack of reecord, denyingg future geneerations the op pportunity to understand, and a learn from m the pioneerrs of Indepen ndence. We loose prrecedents. We W are utilisinng mobile andd web access from all plattforms, inclussive of all dig gital forms off record, for professional p annd pu ublic use. Thee taxonomies based on inteernationally aagreed core daata are to allo ow for both innterest (professsional, studennt, laaymen, and toourists) and research. r Other KM researrch in Multim media University includes first respond der protocols in diisaster managgement. I describe our current researrch interest ass it is very rem mote from thee questions I am a posed by nnew KM pracctitioners. It has h y Master degrree caaused me to consider what help or assistaance is readilyy available to them. I have suggested thaat they join my prrogramme in Knowledge Management, M and occasionnally they do, but for mostt they dependd on other sources so I haave made m a simple exploration of some of the advice availab able online. In nformation seeeking and sh haring Itt is not my puurpose here too deliberate on o learning orrganisations, though the im mportance of reflection and d dialogue wiith reegard to inforrmation that governs g futuree behaviour ccannot be oveerstated. Most inexperienceed knowledge managers seek ad dvice in the ffirst instance. The extent to o which they eevaluate the wisdom w of advice receivedd hopefully wiill develop ovver time, but at thee outset any heelp is valuablee. What W is clear iss that most peeople now when confrontedd with a lack of o information n will search ((or surf) the common sourcces su uch a Google.. Invariably thhey will end up u with Wikippedia. Many use u social netw works almost ccontinuously, so in one sennse
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they will be experienced seekers and sharers of information, albeit informally. I would coin the term ‘embryonic PKM (Personal Knowledge Management) for their present status. Frand and Hixon (1999) first offered the concept of PKM, though there is some scepticism as to whether this is really PIM, personal information management. Despite this I would argue they have a culture of seeking information, though whether this is actionable, hence knowledge is in some doubt. Actionable also implies reflection on action and feedback. The best professionals, Donald Schön (1995) maintained, know more than they can put into words. Still given this seeking culture, what are valuable sources for the new knowledge manager? An exploration I receive regular postings from three KM website I subscribe to. They are KM World, a KM practitioners group and Knowledge Management. The latter two are Linkedin related. I decided to monitor these postings over a period of one month to assess the usefulness of advice offered in discussion threads and the topics covered from the standpoint of the inexperienced knowledge manager. First I make some general observations. KM World proved to be of limited value, there were only nine postings, and of these seven were encouraging attendance at their annual conference. The site is useful if taking courses was the intention, but for my purpose I decided not to subsequently include it. The KM practitioners group I am a member of had sixteen postings. Of these most were related to two topic discussions. One discussion was inititated by Terrence Wallenhorst, a Knowledge Business Manager, Consumer Practice at The Boston Consulting Group. The topic, ‘How do you incentivize and recognize employees for participating in the knowledge sharing culture?” looked at the barriers in fostering a knowledge sharing culture by engaging employees in such a way that they willingly (proactively?) contribute their knowledge and materials for others to leverage. This discussion was already two months old when I started monitoring and had elicited twenty comments by that time. The second topic “To Gamify or not to Gamify” was initiated by Mark Szalkiewicz, Americas Knowledge Management PM at Microsoft. He was hoping to learn about experiences in using gamification to drive behavioural change and achieve results. This posting was about one month old when I started monitoring, and had already received over twenty comments and suggestions. While KM practitioners group is an excellent site, it is unlikely that a novice would choose to follow it, so I have restricted my attention to the third site. The third site Knowledge Management had twenty eight postings during the month of monitoring, mostly on different topics. Sometimes a discussion appears on both Knowledge Management and KM practitioners group sites as they are both Linkedin based. Sometimes advice was to direct to other members of Linkedin who are not necessarily followers of either site. The table below is my calendar record of postings on two of these sites. The subsequent discussion will only address the Knowledge Management website.
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Date 11/09 12/09
KM practitioners group website How do you incentivize and recognize employees for participating in the knowledge sharing culture? How do you incentivize …
13/09
How do you incentivize …
14/09 15/09
How do you incentivize … How can we relate the learning development against plant incident in oil and gas industry? The pioneering “Big History” idea that Bill Gates is pushing for High School students overlooks an...
16/09 17/09 18/09 19/09 20/09
Digital transformation - is it happening, and how does it impact KM & CX? Would you say, and to what degree ISO standards (ISO9001, ISO2000), Business Excellence and...
21/09 22/09
To Gamify or not to Gamify
23/09 24/09 25/09 26/09
To Gamify … To Gamify … To Gamify …
27/09
To Gamify …
28/09
To Gamify …
29/08
SABA People Cloud for knowledge management and collaboration. Any thoughts? How do you use it for KM?
30/09 01/10 02/10 03/10 04/10 05/10 06/10 07/10 08/10 09/10 10/10
Call for your expert opinion
Knowledge Management website
Taxonomy Drafting Tools - Which Do You Use? (Is there something better than Excel?) Where Search & Discover Solutions Fit in Product Development
Decision-making seen as real-time KM Experiment: how social networking can help leverage recognition in KM Knowledge Management in Social Sector It Takes a Mentor Would you say, and to what degree ISO standards (ISO9001, ISO2000), Business Excellence and... Facebook Is An Acceptable Way to Serve Legal Papers, New York Judge Rules Facebook Is An Acceptable Way to Serve Legal Papers, New York Judge Rules Interesting article about knowledge sharing The Mathematical Nature of Knowing Is it time to invest in decision making training and education? IF IT AIN'T BROKE, DON'T FIX IT! But what if it IS broke - and DOES need fixing? With a business proposal, you win the argument - but... Crowdsourcing contributions: Why is KM important to you? The Knowledge Profit. The New Leader for Our Times
Crowdsourcing contributions: Why is KM important to you? Following on from our discussion on Information as an Asset Experience with KM in a scientific research institution ? Why workers still use email instead of available social platforms What would be the most recognized and complete certificate / online course in KM out there? Any examples of a KM assessment framework? Call for your expert opinion in KM Please your attention for the following Contribution sought for book on Social Knowledge Management When Is a KM Community of Practice Superior to a Single Expert? What are the key personal and professional qualities of a new KM practitioner?
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Discussion This discussion will take three postings from the Knowledge Management website which appear useful to new knowledge managers. The others would appear equally useful but for the sake of paper length , I have made an arbitrary choice.
Post#1 Decision-making seen as real-time KM By Rémy Fannader Author, Founder & Owner of Caminao
Abstract- Between Internet-of-Things and ubiquitous social networks, enterprises’ environments are turning into unified open spaces, transforming the divide between operational and decision-making systems into a pitfall for corporate governance. That jeopardy can be better understood when one considers how the analysis of events affect decision-making. Full article at http://caminao.wordpress.com/2014/09/09/events-meaning/ Comment This is quite a challenging paper and from the comments tends to appeal to experienced practitioners. However new practitioners can take some important lessons. First the limitations of environmental scanning. There is a quote from Donald Rumsfeld “…decision-making is all about the distinction between things we know that we know, things that we know we don’t know, and things we don’t know we don’t know.” Fannader make the point that perfect information would guarantee risk-free future and would render decision-making pointless. As a corollary, decisions based on unreliable information entail risks that must be traced. I think all practitioners should accept the observation by Charles Babbage that “Errors using inadequate data are much less than those using no data at all.”
Post#2 Experiment: how social networking can help leverage recognition in KM By Jose Carlos Tenorio Favero, Head of Knowledge Management-GMD SA (Graña y Montero)
Abstract - From various years ago, users have become accustomed to being informed about topics which companies want to tell us, it is clear that in order to so they have used publicity in television, radio, even on various web pages, but they are all static messages. And the voice of the user, when does it shine? Full article at globalknowledgemanagement.org Comment Facero says in his article “For some time now I have been thinking about new ways to recognize employees that participate in Knowledge Management activities, and thinking about the impact of the photo, I understood that a work recognition shared in social networks had surpassed the work borders.” The photo he is referring to is the one that will also figure in this conference of groups of delegates. His experiment was he posted it on, I presume, Facebook and received lots of likes, but also many motivational messages. His point is about recognition, a crucial component of KM. New practitioners must accept part of their role is motivating the workforce. Resistance to change is inevitable, despite any directive from top management. Plenty of KM research evidence ranks recognition as the prime motivator.
Post #3 Knowledge Management in Social Sector By Daniel Bassill, President, CEO at Tutor/Mentor Institute, LLC
Abstract - Innovation is enhanced when you can look at what other people are already doing to solve the same problem you have been trying to solve. In this PDF step one focuses on knowledge management while steps two and three focus on ways to increase the number of people involved in this problem solving, and who help people use the knowledge to support youth, and youth serving organizations in many neighborhoods of big cities like Chicago. Full article at http://tutormentor.blogspot.com/2014/09/knowledge-based-problem-solving-what-is.htm Comment
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Bassill makes the point that in organisations there are Vertical Networks where the unifying factor is a vision, a shared purpose. This could be the use of KM practices throughout a business. There are also Horizontal Networks where the unifying factor is an event, a meeting place, a common interest, such as a community of practice, a specific department. He identifies several stages where horizontal networks can help to achieve the aims of the vertical network. My own experience of knowledge fairs, community of practice festivals suggests this is an effective strategy to roll out KM in organisations, and is supported by a lot of practical experience. End Piece I have viewed the messages from the front via three websites. I have chosen one I have monitored for a month. From its twenty eight postings in that time, I have simply taken three, the tip of the iceberg, for more detailed examination. What have I learnt? There is a phenomenal amount of practical information available, given willingly, for free, available to anyone who wishes to use it. In future I will simply direct those seeking knowledge to these excellent sources.
References (the URLs for the articles reviewed are in the text) Frand, Jason; Hixon, Carol (1999), Personal Knowledge Management : Who, What, Why, When, Where, How?, Working paper, UCLA Anderson School of Management Schön, Donald (1995), The Reflective Practitioner: How Professionals Think in Action, Ashgate Publishing, England Babbage, Charles quote (n.d.) http://www.brainyquote.com/quotes/authors/c/charles_babbage.html#VPT27ikkTGs7lMXl.99
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Mindtree: A Case Study on Communities of Practice Amelia Limijaya Accounting Department, Faculty of Economics, Parahyangan Catholic University Jl. Ciumbuleuit 94, Bandung 40141, Indonesia Tel.: +62-22-2041964 E-mail address: [email protected]
Abstract The era of knowledge-based economy in which we live in today has brought forward the increasing popularity and wide acceptance of knowledge management discipline. As knowledge cannot be managed per se because it resides in an individual’s head, then it is important to create a supportive environment to facilitate knowledge creation and utilisation. One of the means to create such environment is through the establishment of communities of practice. The purpose of this article is to examine the role of communities of practice in helping an organisation achieves its objectives. The method used in this article is an analysis on Garvin and Tahilyani’s case study paper about Mindtree, an Indian company which is considered to be quite successful in implementing communities of practice. The result of the analysis suggests that in order for communities of practice to perform more effectively and contribute more to the organisation directly, they must be nurtured and rewarded. One way to do this is by making communities of practice core to the organisation’s operational activities. The case study demonstrates how knowledge management systems and communities of practice are brought one level forward from their current state to contribute more to the business itself, as measured by the bottom line.
© 2014 Amelia Limijaya. Published by Telkom Pub. Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia. Keywords: knowledge management; communities of practice.
1. Introduction Knowledge-based economy or knowledge economy is the term used by many to describe the era in which we live in today. A definition of knowledge economy is “...one in which the generation and exploitation of knowledge has come to play the predominant part in the creation of wealth. It is not simply about pushing back the frontier of knowledge; it is also about the most effective use and exploitation of all types of knowledge in all manner of economic activity.” [1]. This definition implies that organisations can no longer rely solely on their physical or tangible assets in order to be successful; rather, it is intangible assets (knowledge as the main emphasis) that are considered to be more important for organisations’ survival. Intangible assets can be classified into 3 categories [2]. The first category is intangibles for which property rights are relatively clear and markets exist, e.g. patents, copyrights, data bases. The second category consists of intangibles that are controlled by the firm but there may not exist well-defined and legally-protected property rights and markets, such as business processes and R&D in process. Finally, the last category is for intangibles for which the firm has few (if any) control rights and markets do not exist since these intangibles are tied to the people who work for the firm. This last category is often referred to as intellectual capital, which generally consists of human assets, structural assets, and relational assets. Knowledge could be considered as belonging to the third category, specifically the human assets component. Realising that intangible assets are now becoming more important than tangible ones, managing knowledge has turned out to be the top priority in many organisations. After all, other categories of intangibles sourced from the knowledge itself. One way to manage knowledge is via communities of practice. Communities of practice (hereafter referred to as CoP) have
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emerged as an important aspect in an organisation’s knowledge management systems. It is believed that CoP facilitate knowledge creation and sharing, as well as help the organisation accomplishes its goals. This article builds on from a case study of a company named Mindtree, an Indian IT industry which is considered to be quite successful in managing CoP. This article is structured as follows: section 2 discusses the theory of knowledge management and CoP, followed by a brief overview of the case study company in section 3. Knowledge management systems and CoP at Mindtree are discussed in sections 4 and 5, respectively. Section 6 addresses the 5*50 initiative implemented by the company and the last section provides conclusions as well as recommendations. 2. Literature Review
2.1. Knowledge Management There are several alternatives when it comes to defining knowledge management (KM). Table 1 provides some of them. Although varied, there is one common theme underlying the listed definitions of KM: the process of utilising knowledge which involves various disciplines to help an organisation attains its objectives. Figure 1 exhibits KM dimensions. Recognising and understanding the interdisciplinary nature of KM is the root to a successful KM. Individuals within an organisation should not be limited to think only from their own disciplines’ point of view, but they must be able to broaden their perspective to encompass other disciplines’ viewpoint as well [1]. The success of KM in an organisation relies on several dimensions as portrayed in Figure 1. The first one is the existence of well-established systems and information technologies to enable effective utilisation of knowledge, which in general consists of KM tools (such as e-learning tools, data mining tools) and KM systems (such as decision support systems, customer relationship management systems). The next dimension is related to organisational learning, which can be defined as “... the process of improving actions through better knowledge and understanding.” [1]. This process can be achieved by exploring, exploiting, and sharing knowledge within but not limited to the organisation itself. Lastly, KM success is also contingent on cultural factors as KM deals mostly with humans. Implementing KM systems can be a significant challenge as most people are resistant to change. Therefore, a good leadership is needed to alleviate this concern. Provided that an organisation successfully manages these three dimensions, then it could achieve the strategic purpose of KM activities, that is to enhance intellectual capital and improve organisational performance. It is worth noting that knowledge cannot be managed per se as it resides in an individual’s head; rather, it is the environment that must be managed to facilitate knowledge creation, translation, transfer, and mobilisation to achieve the organisation’s objectives.
Intellectual capital
Organisational performance Strategy
Change management
Culture
Knowledge management
Systems & technology
Implementation Organisational learning Exploration
Exploitation
Knowledge sharing
Fig. 1. Knowledge Management Dimensions [1]
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Author(s) Davenport & Prusak (1998)
Swan et al. (1999) Skyrme (1999)
Mertins et al. (2000) uit Beijerse (2000) Newell et al. (2009)
Jashapara (2011)
Table 1 Knowledge Management Definitions [1] Definition “Knowledge management draws from existing resources that your organisation may already have in place – good information systems management, organisational change management, and human resources management practices.” “... any process or practice of creating, acquiring, capturing, sharing and using knowledge, wherever it resides, to enhance learning and performance in organisations.” “The explicit and systematic management of vital knowledge and its associated processes of creating, gathering, organising, diffusion, use and exploitation, in pursuit of organisational objectives.” “... all methods, instruments and tools that in a holistic approach contribute to the promotion of core knowledge processes.” “The achievement of the organisation’s goals by making the factor knowledge productive.” “... improving the ways in which firms facing highly turbulent environments can mobilise their knowledge base (or leverage their knowledge ‘assets’) in order to ensure continuous innovation.” “The effective learning process associated with exploration, exploitation and sharing of human knowledge (tacit and explicit) that use appropriate technology and cultural environments to enhance an organisation’s intellectual capital and performance.”
Perspective Integration (information systems & human resources) Human resource process Human process
resource
Information systems Strategy Strategy
Integration
2.2. Communities of Practice Among several definitions of CoP that exist in the literature, the following definition could represent the meaning of CoP: “A community of practice is a set of people who share a concern, a set of problems, or a passion about a topic, who deepen their knowledge and expertise in this area by interacting on an ongoing basis” [3]. In other words, a CoP is a place or group whereby people regularly meet or gather to discuss certain issues; and as a result of this discussion, the members of a CoP improve their capacity and knowledge base. Members of a CoP share some sort of common language, as they have the same interest about a particular topic, which is related to their skills or capabilities [4]. Within an organisation, CoP can be regarded as informal networks to facilitate collaboration, knowledge sharing and building, as well as learning among its members [5], [6], [7], [8]. Therefore, based on the knowledge shared and created in CoP, members can collaborate (work together) to address a particular issue that may occur in the organisation, or to trigger ideas, insights, or suggestions that will benefit the organisation as a whole. Essentially, this is the value of a CoP: how far it can help the organisation it resides in to accomplish its goals [8]. Such value is made possible as members experience a sense of identity and belonging by being a part of CoP, which is then translated into prioritising the organisation’s goals [4]. Thus, nurturing CoP in an organisation can be viewed as an approach in addressing the more competitive and dynamic environment where the organisation lives in at present times. Building on from the discussion above, a CoP qualifies to be referred to as “ba”, since it accommodates the knowledge creation which serves as the basis to enrich individual as well as collective knowledge within an organisation [9]. CoP facilitate the interactions between tacit and explicit knowledge, hence they can act as originating, interacting, exercising, and cyber ba. Further discussion about this is discussed in section 5. CoP have three essential characteristics [3], [6], [8]. First, there must be a domain, which basically implies certain competencies that must be possessed by the members. This domain creates a common ground for collaboration and knowledge sharing. Members of a CoP therefore cannot consist of random individuals within an organisation, they must have common language. The second characteristic is the community, where members can collaborate and engage in activities and discussions to build trust and relationships. This characteristic is important, because in order for a CoP to perform its intended function effectively, there should be trust and good relationships among members. Lastly, a CoP must
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have a practice that is shared and held by its members. This practice is developed and utilised in response to a particular issue or problem encountered by the organisation. The distinctions of CoP compared to other groups in an organisation are summarised in Table 2. Compared to others, CoP are informal group which do not have specific targets and timelines; they are formed simply to facilitate members to share knowledge related to their expertise. In spite of this informality, CoP hold an important role in making tacit knowledge explicit and embedded in organisational practices, thus making the knowledge ‘sticky’ and hard to be imitated by competitors [1]. Some of the benefits offered by CoP are that they help drive strategy, start new lines of business, solve problems quickly, transfer best practices, develop professional skills, and help companies recruit and retain talent [1]. Despite the benefits offered, there is one caveat of CoP, that is they “... may become self-reinforcing and self-deluding, turning core competencies of an organisation into core rigidities.” [1]. In other words, CoP could become an end in themselves. To address this risk, CoP must employ the ‘perspective taking’ approach, in which CoP are willing to interact with other communities to broaden their perspective so that they do not operate in isolation [1]. With respect to relating CoP and KM, CoP could fit into the organisational learning dimension in Figure 1. To gain the full potential of CoP, an organisation must introduce and maintain knowledge-sharing culture among its members. An ideal CoP should also be supported by information systems and technology. All these elements are essential to the success of CoP, as experienced by the case study company. Table 2 Communities of Practice versus Other Groups in Organisations [1] Formal groupings ‘canonical practice’
What is their purpose? Who belongs?
What holds it together?
Informal groupings ‘non-canonical practice’
Work group
Project team
Informal network
Community of practice
To deliver a product or service Everyone who reports to group’s manager
To accomplish a specific task
To collect and pass on business information Friends and business acquaintances
To develop members’ capabilities; to build and exchange knowledge Members who select themselves
Mutual needs
Passion, commitment and identification with the group’s expertise
Job requirements and common goals
Employees assigned by senior management Project’s milestones and goals
3. Methodology This article analyses Garvin and Tahilyani’s [10] case study paper about Mindtree, an Indian company which is considered to be quite successful in implementing communities of practice. Mindtree is an Indian IT-BPO (information technology-business process outsourcing) company which has both low and high end services. As known by most people, India has been successful in becoming a global technology and outsourcing hub. Mindtree tries to differentiate itself from competitors by using its culture as a “soft differentiator”. Its aim is to build a company with two specific focus areas: ebusiness consulting and implementation on the enterprise side and product realisation services in the networking domain on the technology side. With respect to the organisational structure, Mindtree adopts a matrix structure in which most employees are allocated either to industry verticals or technology horizontals. The company enjoyed a rapid early growth, however the growth had been gradually subdued due to economic crisis. Mindtree reacted by adjusting its business to focus more on steady revenue from long-term yet low-end work, such as maintenance and testing. It also set a revenue target of $1 billion by 2014. In the following sections, Mindtree’s KM systems and CoP are discussed, along with one of the initiative that was introduced by the company in order to accomplish its $1 billion revenue goal.
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4. Knowledge Management Systems at Mindtree Mindtree adopts a holistic, encompassing approach to KM, where KM serves as a facilitator or an enabler for people to develop and improve their capacity [10]. It is therefore apparent that people are not regarded as a commodity at Mindtree [11]. Moreover, KM systems at Mindtree focus on developing intellectual capital which is essential in delivering innovation, hence better equip the company to face intense competition in the marketplace [12]. KM systems at Mindtree consist of three levels, namely systems to share knowledge, collaborate, and help with innovation; which are aimed to create a comprehensive knowledge ecosystem as described by Nonaka’s ba: social, mind, virtual, and physical space [9].
4.1. The Key Elements 4.1.1.
Values
As stated in the preceding section, Mindtree’s competitive advantage compared to its competitors lies on their culture and values. Therefore, KM systems should be firstly based on the company’s values. These values are translated into a statement called CLASS (Caring, Learning, Achieving, Sharing, and Social Responsibility), which are then acknowledged within the company by integrating them into the company’s activities. As a result, everyone in the company internalises and shares these values. To preserve these values in the future, Mindtree develops a leadership succession program called The Gardening. Led by Mindtree’s vice chairman, this program is designed to nurture and prepare the top 100 people at the company to become future leaders.
4.1.2.
CoP
The second element underpinning KM systems at Mindtree is CoP, which demonstrate the socio-technical approach to KM as adopted by Mindtree [10]. This approach relies on social interactions between employees to share knowledge and collaborate. The interactions can happen essentially anywhere; nevertheless community meetings provide a somewhat formal means whereby people can interact with one another. At Mindtree, there are four levels of community maturity model, which will be explored further in section 5.
4.1.3.
Information Technology (IT) systems
Although Mindtree’s KM systems focus heavily on culture and social networks (CoP), they do need IT to support these two elements of KM. Several IT systems that present at Mindtree are KnowledgeNet, Connected Minds, Open Mind, ProjectSpace, Neuron, and Kernel initiative on project management [10]. Figure 2 depicts KM systems at Mindtree along with the IT systems that support each level.
Innovate Neuron
Collaborate ConnectedMinds, Open Mind, ProjectSpace, Kernel
Share KnowledgeNet
Fig. 2. A Hierarchy of KM Systems at Mindtree [10], [11]
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4.2. The Linkage between Elements Each of the KM elements at Mindtree as discussed above does not stand on its own, instead they are linked one another. CoP are one of the means to share and nurture the company’s values, as well as the place whereby knowledge can be created, shared, and transferred. These processes are supported or accommodated by IT systems developed by the company. Figure 3 exhibits this linkage.
CoP
Values
IT systems
Fig. 3. The Linkage between KM Elements at Mindtree
4.3. Assessing the Effectiveness To some extent, KM systems at Mindtree have performed quite effective. First, unlike most organisations where KM is viewed as a separate entity, at Mindtree KM is regarded as a strategic initiative. Mindtree employs a human-centric and holistic approach to KM, in which KM is integral to the organisation. Also, the numerous KM-related awards that Mindtree has received provide empirical evidence that KM systems at Mindtree have been successful and acknowledged by external parties [10], [12]. Third, with regards to the company’s values, the majority of employees adhere with those values; whereas as far as CoP concern, there are over 55 CoP at Mindtree and the majority of employees are members of at least one of them [10]. These facts demonstrate that employees at Mindtree internalise the company’s values and have a sense of belonging to the community which in turn facilitates collaboration. However, despite the success of Mindtree’s KM systems as mentioned above, they are not flawless. There are perceptions from senior managers about the lack of impact that KM brings to the business itself. Thus far, KM has done well with respect to improving the delivery process and other internal activities. On the other hand, KM has not been able to impact other externally-oriented domains, such as sales and customer acquisition. To address this issue, Mindtree has planned an initiative in KM systems that would allow external parties to be more involved in Mindtree’s knowledge activities. Drawing on from this plan, it can be deduced that Mindtree aims to improve the interactions of three families of intangible assets: external structure, internal structure, and individual competence. The interactions are pointed towards increasing leverage that will have a direct impact on business [13]. Therefore, KM systems would contribute more directly to the business itself. These interactions are shown in Figure 4.
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Fig. 4. The Nine Knowledge Transfers [13]
5. Communities of Practice at Mindtree At Mindtree, CoP are an integral part of KM systems: a CoP is a place where knowledge is created and shared, and employees can collaborate better via social interactions that take place. CoP have become inherent at Mindtree that the firm is described as a “community of communities” [10].
5.1. The Roles CoP at Mindtree serve as an enabler or facilitator to knowledge environment [10]. This concept is what Nonaka and Konno [9] referred to as “ba”. CoP at Mindtree proceed further than ordinary social interactions because the concept of knowledge creation and sharing is embedded in CoP. In addition, CoP also provide a means to connect employees who are geographically dispersed. There are four levels of CoP at Mindtree, each of which can be associated with the concept of ba: 1. Community of interest At this stage, the aim of CoP is focused mainly on sharing an interest without any intention for learning. This is similar to “originating ba” and represents the socialisation phase in the knowledge creation process as described by Nonaka and Konno [9]. 2. Competency building At this second level, not only peer-to-peer interactions that take place, but community objectives also start to be stated explicitly. Hence, this level is equivalent to “interacting ba” and externalisation phase. 3. Capability building Here, CoP advance further by creating relationships between communities and other organisational entities, hence bring impact to the company as a whole. The company is creating “cyber ba” that facilitates the combination stage. 4. Capacity building On the top of the pyramid, CoP would be expected to interact with external parties with the purpose of exchanging knowledge. With respect to the knowledge generating process, this is equivalent to internalisation, which is facilitated by “exercising ba”. Figure 5 exhibits the four characteristics of ba, whereby Figure 6 displays the community maturity model at Mindtree linked with the four ba and also the knowledge generating process.
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Fig. 5. The Four Characteristics of Ba [9]
Fig. 6. Mindtree’s Community Maturity Model [10]
5.2. Assessing the Effectiveness The effectiveness of Mindtree’s CoP can be evaluated by using the criteria of successful CoP as proposed by Iaquinto, et al. [8], which consist of: a sense of ownership of CoP; a willingness to participate, collaborate, and share expertise in meetings as well as outside; and the identification of gaps in their knowledge and attempts to fill those gaps. As far as these criteria concern, CoP at Mindtree have been performing reasonably well by demonstrating the attributes mentioned. However, a very successful CoP is difficult to achieve in nature, as employees must also perform their day-to-day work in addition to participating in CoP [7], [10]. Nevertheless, this issue can be managed by integrating CoP into employees’ daily activities, although this is not an easy task to do. Furthermore, there is an issue of how far CoP should contribute directly to the business itself, which is still not unanimous at Mindtree. Thus, the effectiveness of CoP relates with the extent to which CoP accomplish the business and community objectives [7]. While Mindtree’s CoP have been effective in performing the later, it is still lacking in the former, which is meeting the business objectives.
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5.3. Suggested Improvements Mindtree realises that its CoP have not been performing at the highest effectiveness potential. Therefore, to some extent, Mindtree has tried to improve the effectiveness of its CoP by organising the Community Champions Meet forum, which is aimed at connecting the communities more to the organisation as a whole. This initiative is pointed towards the capability building stage as shown in Figure 6 above. Ideally, there should be more CoP residing in the upper stage of the community maturity model so that they can bring positive impacts to the organisation as well external parties. In addition to the existing practice, Mindtree might also want to consider the following predictors [7] to enhance the effectiveness of CoP: 1. Legitimacy This aspect draws from the result that CoP which are considered as core or central to the organisation’s operations (whereby bottom line is the most common indicator) performed more effective. 2. Peripherality The key feature of this second element is task interdependence, which states that the higher the levels of integration of CoP members with their communities, the more effective CoP are. 3. Participation This last factor is achieved when members understand the objectives of the community and get involved in it. The effectiveness of participation can be measured by community empowerment (high commitment to CoP despite the busyness of daily and formal work) and community-oriented external leadership (the existence of an external leader to help members becoming more engaged in CoP). In brief, Mindtree could improve the effectiveness of its CoP by making them core to the organisation, increasing the level of members’ integration to the communities, empowering the communities, and developing a community-oriented external leadership to monitor the communities and give an “outsider point of view” so that CoP will not operate in isolation, as mentioned in section 2. The following figure summarises this relationship.
Core CoP
External community - oriented leadership
CoP effectiveness
Empowerment
Task interdependence
Fig. 7. The LPP (Legitimacy, Peripherality, Participation) Theory to CoP Effectiveness [7] 6. The 5*50 Initiative at Mindtree In 2009, Mindtree announced its goal to become a one billion dollar company by 2014, stepping further from a mid-tier player into a large player in the IT industry. The company strives to achieve this objective by using three strategies, one of which is by initiating the 5*50 program. This program invites all employees to create a $50 million business idea, in which five best ideas will be developed further to contribute to the attainment of one billion dollar company. As a result of this initiative, KM and CoP at Mindtree would be affected.
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6.1. Impact on Knowledge Management The impact of 5*50 initiative to KM is related to assessing the effectiveness of KM as discussed in section 4. Despite the fact that KM at Mindtree has performed quite effective, there is still a gap between KM and its impact on business. In order to bridge this gap, innovative solutions need to be developed, and the 5*50 initiative can be regarded as providing the link between KM and the ultimate business objective itself (bottom line as the most common measure). Support from KM is very critical in order for the initiative to run well. Firstly, IT systems as one of the KM elements play a key role through Neuron to facilitate the innovation process. Secondly, KM function is expanded by the existence of Innovation Council to nurture and develop new ideas. Thirdly, KM also supports the 5*50 initiative by developing the content for the mini-MBA program. In summary, as a result of the 5*50 initiative, KM is brought one level forward from building the KM infrastructure to assisting business strategies. KM will experience an evolutionary process from being focused primarily on internal aspects and building individual competencies to encompassing external parties as well. This is supported by the plan to link Neuron to ECM system (Enterprise Content Management) to streamline the interactions with external parties. It is apparent that Mindtree strives to optimise the interactions among internal, external structure, and capabilities to maximise the value creation capacity (leverage) of the whole system to achieve the strategic purpose of profitability [13].
6.2. Impact on Communities of Practice Mindtree’s CoP are affected by the 5*50 initiative in several aspects. Prior to initiating the program, CoP resembled informal groups which were treated differently from other functions within the organisation and did not appear on the organisation chart. In addition, it was not compulsory for CoP to yield organisational output and there was no measurement to assess the effectiveness or contribution of CoP to the organisation as a whole [10]. This traditional state of CoP would not likely be the same after the inception of 5*50 initiative. CoP provide a means whereby members can share, develop, and nurture their business ideas related to the initiative, in which the output can be measured by evaluating the contribution of the ideas to the company’s profitability. In this regard, CoP are positioned as core to the organisation’s operations [7]. Having said that, by no means that CoP thus become a formal part in the organisation chart. To the least extent, informal CoP would be nurtured, supported, and rewarded [3] as a result of the initiative. Also, such an intraprenuring initiative, as termed by Mindtree’s executive chairman to refer to the 5*50 program, could be viewed as enhancing the capacity building level in the community maturity model, which focuses on innovation, creating new competencies and capabilities. Thus, the communities would make a progress towards the highest hierarchy in the model, as currently no community is considered to exist at such level. The initiative provides a space for exercising ba which supports the internalisation phase in the knowledge creation process. Hence, CoP are taken one step further as a result of the initiative. The 5*50 program can also be viewed as an approach to enhance community empowerment so that CoP can perform more effective. Community efforts at Mindtree would be directed towards the achievement of $1 billion company. Specifically, this is an example of external boundary spanning oriented, that ensures the alignment of community efforts with the organisation’s mission or initiatives [7]. To sum up, the existence of 5*50 initiative reinforces the role of CoP in knowledge generation and sharing which contributes positively to the company’s success [3]. 7. Conclusions and Recommendations The discussion thus far emphasises the importance of having CoP in an organisation. CoP act as “ba”, which serves as a platform for knowledge creation and sharing, hence CoP are an integral part of KM systems within an organisation. In order for CoP to perform more effectively and contribute more directly to the organisation, CoP must be nurtured, supported, and rewarded. One way to do this is by making CoP core to the organisation’s operational activities, just like what Mindtree did with the 5*50 initiative. It is also worth noting that all Mindtree’s employees are involved to create business ideas to help the company achieves its mission; the responsibility is not limited to certain functions or certain people only. This is a lesson of collaboration and employee empowerment in an organisation, which is expected to deliver a better outcome. Another lesson that can be derived is the significance of interactions between internal structure, external structure, and capabilities to maximise the leverage which could create competitive advantage in the marketplace. As a postlude, the case study demonstrates how KM and CoP are brought one level forward from their current state to contribute more to the business itself, as measured by the bottom line.
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References [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13]
Jashapara, A., 2011. Knowledge Management: An Integrated Approach, 2nd edition, Pearson, Essex. Zeghal, D., Maaloul, A., 2011. The Accounting Treatment of Intangibles – A Critical Review of the Literature, Accounting Forum 35, pp. 262-274. Retna, K.S., Ng, P.T., 2011. Communities of Practice: Dynamics and Success Factors, Leadership & Organization Development Journal, Vol. 32, No. 1, pp. 41-59. Lesser, E.L., Storck, J., 2001. Communities of Practice and Organizational Performance, IBM Systems Journal, Vol. 40, No. 1, pp. 831-841. Hara, N., 2009. Communities of Practice: Fostering Peer-to-Peer Learning and Informal Knowledge Sharing in the Work Place, Information Science and Knowledge Management 13. Wenger, E., 2001. Communities of Practice, International Encyclopedia of the Social & Behavioral Sciences, pp. 2339-2342. Kirkman, B.L., Cordery, J.L., Mathieu, J.E., Rosen, B., Kukenberger, M., 2011. Managing A New Collaborative Entity in Business Organizations: Understanding Organizational Communities of Practice Effectiveness, Journal of Applied Psychology, Vol. 96, No. 6, pp. 1234-1245. Iaquinto, B., Ison, R., Faggian, R., 2011. Creating Communities of Practice: Scoping Purposeful Design, Journal of Knowledge Management, Vol. 15, No. 1, pp. 4-21. Nonaka, I., Konno, N., 1998. The Concept of “Ba”: Building A Foundation for Knowledge Management, California Management Review, Vol. 40, No. 3, pp. 40-54. Garvin, D.A., Tahilyani, R.. 2010. Mindtree: A Community of Communities, Harvard Business School. Kumar, E.P.P., 2012. Mindtree: A Community of Communities. Retrieved from http://www.slideshare.net/pradeepravin90/mind-tree Paul, S., 2011. 2011 KMWorld Reality Award Finalist: Mindtree. Retrieved from http://www.kmworld.com/Articles/Editorial/Features/2011KMWorld-Reality-award-finalist-Mindtree-78518.aspx Sveiby, K.E., 2001. A Knowledge-Based Theory of the Firm to Guide in Strategy Formulation, Journal of Intellectual Capital, Vol. 2, No., 4, pp. 344-358.
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The Effect of o Affiliaation, Leevel of Satisfaction and IInnovation to Knowledge Shaaring in E Economiic and Business B Faculty, Telkoom Univ versity Anita Silvianittaa, Tri Ind dra Witjakssanaa Business Administration, A Faculty of Com mmunication an nd Business Bandungg Technoplex, T Telkom Univers rsity, Bandung, Indonesia I
__________ _ ____________________ ____________________ __________ ____________________ ____________ Abstract A Knowledge K shariing is an imporrtant thing that every institutioon to be done, especially e higheer education insstitution. To gett students with an ex xcellent qualityy, every lecturerr in higher education institutioon needs to imp prove their kno owledge. Workiing climate factor influences the t prrocess of know wledge sharingg. Conducive working w climatee and a good relationship within w member’’s in-group willl also affect the t co ommunication process, so thee information exchange e proceess will do weell. This researrch using descrriptive method and quantitatiive co orrelation. The aim of this research is to deteermine the effecct of affiliation n, level of satisffaction and innoovation to know wledge sharing in Economic and B Business Facultyy, Telkom Univ versity.
© 2014 Anitta Silvianitaaa, Tri Indraa Witjaksannaa. Publisheed by Telko om Pub. Ltdd. Selection S annd peer-reviiew under responsibilit r ty of The ISSCLO, Deparrtment of Com mmunication n, University of Telkom, T 203422 Bandung, Indonesia I . Keywords K : Know wledge Sharingg, Working Clim mate
__________ _ ____________________ ____________________ __________ ____________________ ___________ 1.. Introductioon Everyyone in organiizations need knowledge k annd not everyon ne have same information aabout somethiing they need in work. Know wledge sharinng process willl improve eveery member in n an organization, and alsoo will improvee the interactioon between meembers. Whenn organization n can facilitatte their memb ber’s need for knowledge, sso they will trry to give som me positive coontribution too the organizzation, and aat the end will w also imp prove the em mployee’s peerformance annd organizationn’s productiviity. Accorrding to Henddrik (in Shofa, 2008) know wledge is a com mbination bettween data annd information n with intuitioon, experience, ideas and motivation m from m competenc e sources. Th here are two types t of know wledge, tacit knowledge annd explicit knoowledge. Taccit knowledge is something stored in hum man brain, while explicit knnowledge is so omething stored in documennt or other stoorage beside human h brain ((Uriarte in Sh hofa, 2008). Kosasih (in SShofa, 2008) said knowledge managemennt become guuidance about intangible asssets managem ment and beccome a main pillar for an organization in creating vallues. Creatiing values in an organizatio on is not onlyy from tangiblle asset like current c assets and fix assetss but also usinng intangible aassets like knoowledge. According to Druucker (in Musazdin, 2012) basic b from eco conomic resou urces is not onnly from naturaal resources, capital, c machin ne, human ressources but alsso knowledge. We neeed a long prrocess and tim me to optimizaation for impllementing Kn nowledge Mannagement (KM M). One of thhe activities frrom KM is Knowledge K Sh haring (KS), where every employee communicates, share and do oing knowledge transfer. W Without sharingg, learning pro ocess and knoowledge creatiion will inhibit and utilizattion of scale from f knowledge will also reestricted and there will bee no increasinng value, beccause knowledge only useed by limited person or unnit (Musazdin, 2012).
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KS become needs for every organization to improve employee’s performance and organization’s productivities. Faculty of Economic and Business (FEB) is one of seven faculties in Telkom University that also make knowledge become a first priority for every employee, especially lecturer. Not only because FEB is in education institution but also for improving the quality from all members, students and lecturer. Right now, in FEB there are three program studies, Management Business, Accounting and Master of Management. There are some factors can affect KS process, such as working climate. Good working environment influenced by a good working climate, so KS process will work properly with communication and cooperation between employees in the organization. Based on a simple explanation in background, this research has some research problem such as: a. How is working climate's condition in FEB? b. How is knowledge sharing’s’ condition in FEB? c. How is the influence of working climate to knowledge sharing in FEB? 2. Material and Method
2.1.
Knowledge Management
Knowledge Management (KM) is a science that integrated to identification, remembering, share and evaluating any information in the organization. That information is collection of data, document, policy and procedure about something new and individual’s experiences (Neilson, 2001 in Hall, 2003).
2.2. Knowledge Sharing Tiwana (2002) in Sohail (2009) classify KM into three different processes, such as knowledge acquisition, knowledge sharing and knowledge utilization. KS can be identified as an exchange of experience, events, thought or understanding about many things with employee’s expectation to get deeper knowledge about something. KS also can be seen as a communication, from many kind of knowledge, and there is some information about knowledge with explicitly in it, about ‘know how’ and ‘know whom’ (Hawamdeh, 2003 in Sohail, 2009). In this research, knowledge sharing is seen as a combination some point, such as:  Characteristic of knowledge  Working culture  Behavior of employee  Opportunity of share  Motivation to share
2.3. Working Climate According to Liang et al (2010) in Xue et al (2011), working climate significantly could be influence someone’s insight, normative believes and technology application. Based on Bock et al (2005) in Xue et al (2011), working climate can be influence by three dimensions, such as affiliation, trust and innovation. Affiliation is perception about togetherness between members in an organization. It also becomes willingness from everyone in an organization to helping each other. Trust can be defined as a willingness from every member to accept their own weakness with share competency and integrity from organization’s members (Pavlou et al, 2007) at Xue et al (2011). Effective communication inside the organization is when trust and commitment become common (Te’eni, 2011) at Xue at al (2011). Trust between members inside organization will increase the willingness for working as a team. Innovation in teamwork is based on change level and creativity, which is actively pushed in teamwork. Innovation in a team emphasized the need to learn, open for all information and responsibility (Bock et al, 2005) in Xue et al (2011). According to Kim and Lee (1995) in Xue et al (2011) members in an organization with higher innovation will empowered to share ideas, knowledge and information with all members compared to an organization with no innovation. Research hypothesis: There is a correlation between working climate, such as affiliation, trust, innovation and knowledge sharing in FEB. 3. Results and discussions Based on statistical calculation using 48 samples, found that correlation between X and Y variable is: Y = 1.310 – 0.86X1 + 0.695X2 + 0.074X3
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From the regression formula, affiliation (X1) has a negative correlation with knowledge sharing (Y), but trust (X2) and innovation (X3) has a positive correlation with knowledge sharing. Based on the calculation, it can be seen that if KS activity increase, then affiliation will decrease. A. Hypotheses Testing Hypotheses testing using t test and F test for all variables.
Model
1
(Co nstant) X1
Table 1. Variables Coefficients Coefficientsa Unstandardized Coefficients Standardized Coefficients B Std. Error Beta 1.310 .703
X2 X3 a. Dependent Variable: Y
-.086 .695
.118 .092
-.053 .858
.074
.219
.039
t
Sig.
1.86 4 -.735 7.52 0 .337
.069 .466 .000 .738
Based on t test, is known from all of X variable, there is only X2 found proven has an influence to knowledge sharing. It can be proven from significance level for X2 0.000 < 0.05. Based on this result, trust element is significantly influencing knowledge sharing in FEB. Variable X1 with significance point 4.66> 0.05, it can prove that there are no influence between affiliation and knowledge sharing. It also proves for X3, which is innovation with significance level 0.738 > 0.05, found that innovation is nothing to do with knowledge sharing activity in FEB. Hypotheses testing using F test shows the result:
Model
Table 2. ANOVA Calculation ANOVAa Sum of Squares df Mean Square 3.629 3 1.210 1.031 44 .023 4.659 47
Regression Residual Total a. Dependent Variable: Y b. Predictors: (Constant), X3, X1, X2 1
F 51.639
Sig. .000b
Based on ANOVA table above, it can be known that variable X1, X2 and X3 simultaneously has a significance influence to Y variable, this can be proves from the value for significance level for F 51.369 > 0.000. B. Coefficient of Determination (R2) Table 3. Coefficient of Determination Model Summary Model R R Square Adjusted R Square Std. Error of the Estimate 1 .882a .779 .764 .15305 a. Predictors: (Constant), X3, X1, X2 Using coefficient of determinant calculation, it found that as whole, X variable (Working Climate) provide a contribution to Y variable (Knowledge Sharing) for 0.779 or 77.9% and 22.1% caused by another factors which is not include in this research.
* Corresponding author. Tel.: +8122239829 E-mail address: [email protected]
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4. Conclusions Based on theory and calculation above, as a result it found that as a whole, working climate has an influence with knowledge sharing in FEB Telkom University. But, if we see one by one, there is only trust variable that explain knowledge sharing, while affiliation and innovation does not have an influence with knowledge sharing. For FEB, to increase knowledge sharing activity is important that every members or lecturers in the faculty have trust to each other. Every lecturer does not have the same knowledge and information, so information exchange is important. It also need for learning activity and research where everyone needs knowledge and information. Trust variable has a strong connection with togetherness with all lecture, caring and helping each other. For this time, there are a lot of lecture in FEB with their own activity, so they are not have much time to sit together to do something together. For innovation, in this research is having a strong connection with affiliation. Innovation could not be appear in a working climate if there is no togetherness in a working climate.
References [1] Sikes, C.V., Lai, L.P., Schreiber, M., Mont, M.A., Jinnah, R.H., Seyler, T.M., 2008. Instability After Total Hip Arthroplasty Treatment with Large Femoral Heads vs Constrained Liners, the Journal of Arthroplasty, Vol. 23, No.7, pp. 59-63. [2] Cuckler, J.M., 2011. The Dislocated Total Hip: The Dreaded 3 AM Phone Call, Seminars in Arthroplasty 22, pp. 98-99. [3] Hummel, M.T., Malkani, A.L., Yakkanti, M.R., Baker, D.L., 2009. Decreased Dislocation After Revision Total Hip Arthroplasty Using Larger Femoral Head Size and Posterior Capsular Repair, the Journal of Arthroplasty, Vol. 24, No. 6, pp. 73-76. [4] Sugano, N., Tsuda, K., Miki, H., Takao, M., Suzuki, N., Nakamuro, N., 2012. Dynamic Measurements of Hip Movement in Deep Bending Activities After Total Hip Arthroplasty Using a 4-Dimensional Motion Analysis System, the Journal of Arthroplasty, Vol. 27, No. 8, pp. 1562-1568. [5] Kluess, D., Martin, H., Mittelmeier, W., Schmitz, K.P., Bader, R., 2007. Influence of Femoral Head Size on Impingement, Dislocation and Stress Distribution in Total Hip Replacement, Medical Engineering & Physics 29, pp. 465-471. [6] Eichmiller, F.C., Tesk, J.A., Croarkin, C.M., 2001, Mechanical Properties of Ultra High Molecular Weight Polyethylene NIST Reference Material RM 8456, In: ‘Transactions of the Society for Biomaterials, 27th Annual Meeting’, p. 472. [7] Fregly, B.J., Bei, Y., Sylvester, M.E., 2003. Experimental Evaluation of An Elastic Foundation Model to Predict Contact Pressures in Knee Replacements, Journal of Biomechanics 36, pp. 1659-1668. [8] Bergmann, G., Graichen, F., Rohlmann, A., 1993. Hip Joint Loading During Walking and Running, Measured in Two Patients, Journal of Biomechanics 26, pp. 969- 990.
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The S Strategicc Roles of o Know wledge Managem M ment Pracctices to Build Com mpetitivee Advanntage of Credit Managem M ment in n Bank R Rakyat Indonesi I ia Kristinna Lestarin ningsih Doctoral Progra ram in Managemeent and Business Padjjadjaran Universitity, Faculty of Ecoonomics and Bussiness, Jln. Dipati Ukurr no.35, Bandungg 40132, Indonesia ia
Abstract A
As a hhighly regulateed industry, baanking industryy in Indonesiaa has been dyn namically chang nged for the laast decade due to inncreasing intenssity of competit ition amongst pllayers and volat atility in custom mers’ needs and d perceptions. T The challengingg environment has h puut tight pressurre to all banks to pursue and build b new sourrces of competi titive advantagees in order to suurvive, grow, and a prosper in the t future. fu Banks all ll over the worldd have implemeented Knowledg dge Managemennt (KM) to creatte more value fr from their businness processes and a opperational routi tines. As credit remains the baackbone and cor ore product for BRI, B the bank has h been intenssively developin ing KM system m in orrder to optimizze the managem ment of credits. Aiming at out utperforming itss rivals to give the best service ces to customers rs, KM system for f management m creedit in BRI invoolves all staffs to gain, share, and empower knowledge k so that t they can suupport organizaational learningg to reeach business ggoals. Previouus internal reseaarch revealed th that there was a positive correelation betweenn the efforts too overcome creedit prroblems and KM KM, and there was w a positive coorrelation betwe ween KM and crredit managemeent. Based on tthese findings, the t strategic rol oles off KM practices es have been determined d in this t paper as re related to the intention i for BRI B to build coompetitive advvantages of creedit management. m Thhe high potency cy of BRI to suustain competititive advantages through KM practices p is supp pported with itss strong corpora rate coommitments too invest in humaan capital and soophisticated infformation technnology.
© 2014 Krisstina Lestariiningsih. Pu ublished by Telkom Pub b. Ltd. Selection S andd peer-revieew under reesponsibilityy of The ISC CLO, Departm ment of Comm munication, University U of Telkom, T 203422 Bandung, Indonesia I . Key K words: Knowledge K Mannagement, Com mpetitive Adv vantages, Crediits Problems, Credit Manag gement, Corporrate Commitm ment, Informatiion Technology
IN NTRODUCT TION Havinng been a repuutable Indoneesian commerrcial bank and d the best statte-owned com mpany in 2013 3, Bank Rakyyat In ndonesia (BRII) has shown excellent perfformance of ssix-fold revenu ue achievement from IDR 95B in 2003 to IDR 606B in 20 013. Moreovver, profit groowth within th hat decade haas been increaased eight-fold d from IDR 22,58B to IDR 21,16B (as per p December D 20133). It is well recognized th hat the excelleent performance of the bank k has been suppported by the availability of co ompetent and professional human h capitall. Improving the competen ncy of the peop ple related to fund, loan, an nd fee-based has h beeen the mainn challenge of BRI to outtperform its rrivals. Intensiive learning program p throu ough systemattic training annd ed ducation has bbeen essentiall for BRI in orrder to equip bbetter skills and a knowedge to its staffs, iindicated by the t allocation of 5% % out of the total human resource exp penses as the human capitaal investment in the formaats of training g and educatioon prrograms for tthe staffs. Leearning and ed ducational ceenters have beeen establisheed in some arreas to educaate the staffs to
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become more reliable. In addition to improve the ability of the staffs, BRI also provides technological supports to improve access to information and reduce the processes of manual works into automatic so that the staffs can create more value of services to customers. In accordance to the objectives of the Corporate Plan 2000-2015, BRI has lifted up its target to achieve a higher predicate as the best payment bank in Indonesia in 2015. Attaining these goals is not easy because BRI has to face more challenges of intense competition with the other commercial banks. Despite its serious efforts to improve the knowledge and skills of their staffs, the comprehensive programs are not fully integrated. Most of competitor performs the same programs as to obtain competitive advantage. Yet to gain future competitive advantage has been no longer relied on generic strategy such as increasing tangible assets in physical formats, but rather by leading to strengthen the intangible assets such as intellectual capital, knowledge, and competence. Knowledge management (KM) practices in an integrated banking has already been a common requirement, so if the KM practices in BRI remains unintegrated then most probably the bank can be left behind and outperformed by the rivals. In turn, it can be resulted in low standard of performance and productivity, as well as the dwindling of net interest margin. PROBLEM IDENTIFICATION BRI is still relying on the method of knowledge creation and dissemination partially, unevenly, and out of date, resulted in the following problems:  Knowledge management systems have not been well integrated.  Policies, operational procedures, regulations, reporting, information about best practices are still in manual formats or already in electronic forms but still not integrated.  The absence of on-line system that can keep intellectual capital, research data and other data, including confidential category that can only be accessed by authorized users.  The absence of a system that allows staffs to conduct discussions electronically that can speed up the process of discussion and decision-making.  The absence of electronic collaboration system that can lead to a more efficient paperless work. The management of credit in BRI is still not optimal in the application, as described below:  The required time to complete the loan package from the collection of customer data to the credit decision process sometimes passes a predetermined threshold.  The limited number of Account Officers (AO) to handle so high work-load, from prospecting to customer data collection process, to the preparation of the analysis, to negotiation and to the monitoring.  Access to get customer data and documents can not be placed on line amomg credit staffs in each working unit.  The decision making process takes long time because of the absence of decision makers in the workplace. Loan Implementation Guidelines requires that the approval of loan application is taken by Loan Committee performed by its members together at the same time, but due to the busyness of each member of the committee the committee's decision often delayed.  Monitoring of credit can not be carried out in an integrated manner among the proponent, analysts and breakers. LIMITATION OF PAPER In consideration to the above identified problems, the author limits this paper on the efforts to optimize the management of credit, given the current situation that BRI is still relying on loans as the main source of income. This is reflected in the total assets of Rp. 606 trillion in 2013, which has been disbursed in the form of loans amounting to Rp 431 trillion or 71% of assets in form of loan. It is inevitable that 87% of BRI total revenue is derived from interest income from loans. In other words the core competency of BRI is still on the credit management. For that reason, BRI has targetted its expansion of credit in 2014 up to 15% -17% higher as compared to 2013, yet for SME loans, BRI will grow at range of 21%. The high target expansion required BRI to compete more aggressively with other banks in gaining market share in loan segment. In December 2013; BRI loan market share was still around 12.24% of the total share in Indonesia with a nominal value of Rp. 431 trillion. Intense competition in the loan segment needs to be supported by optimal credit management, but until now the credit management process remained conventional. Often the prospected customers switch
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The Strateggic Roles of Know wledge Managem ment Practices to B Build Competitivve Advantage of Credit C Managemeent in Bank Raky yat Indonesia
to o other bank bbecause the decision d proceess for approvval is too long g while the lo oan applicantss need the fun nds in very neear fu uture. Furtheer analyses off this paper will not cover tthe technical aspects in thee field of infoormation tech hnology, but the t au uthor will provide the alternnative applicaable solutions. THEORITICA T AL BACKGR ROUND Know wledge is anytthing which has h been trannsformed into o understandin ng, combininng instincts, ideas, rules annd prrocedures as a guideline to act and makee decisions. Too understand the meaning of o knowledgee it is necessarry to approachh a hiierarchy of knnowledge that can be seen in n Figure 1 bellow:
Figure 1. H K Hierarchy of Knowledge Source: Ernst & Youn ng (2002) In thee hierarchy of the knowledg ge there are thhe key terms such s as data, information, kknowledge, an nd competenccy. Data D is the fouundation of knnowledge in th he form of figuures or objectts and has a meaning m only w when it comess to the contexxt. Data D which aree well organizzed, have mean ning, and conntextually relev vant called as information, which are alsso considered as of a stream of messages. Whilee the differencce of informattion to knowleedge can be ex xplained as innformation is corroboration c th he data, whilee knowledge is the conditiion of the exiistence of a commitment c or o belief that something iss good or righht. Higher H hierarchhy of knowleedge is compeetency which is an array of o skills, know wledge and abbilities needed to achieve an orrder of activitty associated with w a specificc role of humaan being. As a new conceptt, KM was firstly fi introduuced in 1995 when there was no agreeement among gst most of the t reesearchers reggarding the definition d and d perception of KM. Som me researcherss and instituttions have tried to create a deefinition of knnowledge mannagement as follows: fo  Nonaka andd Takeuchi (22004) describeed that KM is a framework of explicit an nd tacit knowlledge in a dyn namic processses of justifyingg personal belliefs. Explicit knowledge iss not subjectiv ve and can be transmitted/trransferred thro ough systemattic formal langguage that caan be stored in the data bbase, among others, and written w reportts. While taciit knowledge is subjective aand context-sppecific, makin ng it difficult tto be formulatted and comm municated. Taccit knowledgee can be dividded into two paarts, namely thhe cognitive element e in forrm of paradigm ms, perspectiv ves, beliefs annd perspectivees and techniccal expertise am mong other eleements.  Sveiby (19996) defined KM as the art of o creating com mmercial valu ue of intangible assets.  IBM Consuulting Group (2002) ( defined d KM as activvities that enab ble an organizzation to betteer create, undeerstand, and use u what they kknow.  KM Definiition of Mc Kinsey K & Co is strengthenning performaance through systematic aand planned approach a to the t formation, ddevelopment and a applicatio on of knowleddge in value crreation processes of the orgganization. Characteristic C cs of Knowled dge-Based Co ompany Vieweed from the standpoint s of competition, knowledge is power, nam mely the poweer to survive, adapt, and the t Companies tthat are able to po ower that groows in harsh environments. e t compete on n an ongoing basis and can n survive in the t lo ong run are chharacterized byy the presencee of confidencce and supporrt of top manaagement and thhe staffs to bee in the value of un nity in order to achieve the goal. They go through oopenness to th he outside worrld and the toolerance to the influx of neew id deas as a real ability to learrn and adapt. To achieve coompetitive ad dvantage, BRI need to applyy the concept of Knowledggebaased organizaation with the main mission n to obtain, m manage and prrocess informaation and knoowledge into competency c annd
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take the race of becoming a learning organization. Knowledge-based organization also aims at enhancing and improving business processes. Technology is only a tool, so that KM must be viewed as a process, not only as digital network system. Successful companies have the ability to consistently create new knowledge, and quickly spread it within the organization, and then apply it in the form of products or services produced. Knowledge-based company will have also knowledge-based business, having a systematic process to manage knowledge and instill a culture of learning and knowledge sharing. The characteristics of the knowledge-based company are as follows: a. Actual knowledge is disseminated to the members of the organization and issued in the form of knowledge sources in the form of text or any other form. b. Have different ways to determine the spread (sharing) knowledge within the organization. c. Creating a social relationship that involves collecting, sharing and application of knowledge.
Credit Management Credit management includes planning the activities, followed by the process of granting credit approval decisions (initiatives, analysis and evaluation, negotiation, recommendation and granting credit approval), preparation of loan agreements, documentation and credit administration, loan approval and disbursement credit supervision, and guidance. In setting up the credit planning, bank must conduct market research and combined with its experience for giving credit, so that the bank can obtain guidelines for the target market to enter, the criteria that prospective customers can be accepted as a client, customer criteria that can be served, as well as the preparation of the magnitude of the target expansion. Furthermore, the process of granting credit decision and credit initiatives include loan application, analysis and evaluation of credit, loan negotiations, the decision on granting credit, credit agreements, documentation and credit administration, loan disbursement approval and supervision of credit. RESEARCH METHODOLOGY Through the application of KM, author tries to overcome the problems of credit management based on the idea development and on the reference study. The author has previously conducted a strategic review of the concept of KM in BRI in order to optimize the management of credit through internal survey to get the primary data to reveal the facts of the problems faced in daily work of the staffs in the field of credit. The findings of these problems are as follows: a. Complaints on limited time of work to complete the job in the field of credit. b. Complaint on process to accomplishing the work in the field of the old credit. c. Complaints on not obtaining necessary information to support the completion of work in the field of credit. d. Complaints on lack of information of people who are experts in some particular fields. e. Complaints on the new staffs or replacement staffs of having no understanding what to do. f. Complaints on loosing knowledge and information due to the disruption of the information system. g. Complaints on education and training in the field of credit that are not consistent in its implementation. The results of the survey conducted by the author to 40 respondents (who had a credit-work background) revealed that the above problems are significantly important, with the score of complaints above average tended to very high (above 4 on a scale of 6). The survey results can be seen in the table below: Table 1. Results of the survey of staffs faced complaints of credit in BRI Types of Complaint Total Score Average Score
a 171 4,275
b 172 4,3
c 170 4,25
d 162 4,05
e 173 4,325
f 162 4,05
g 165 4,125
From the above Table, it appears that the concept of KM has not been applied on daily work. Business environment in bank industry continues to change so dynamically, which eventually leading the competition in credit to get tougher. Under this situation, an integrated and up-to-date KM to improve the services to customers will be one of competitive
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The Strategic Roles of Knowledge Management Practices to Build Competitive Advantage of Credit Management in Bank Rakyat Indonesia
advantage determinants for a bank. BRI that still relies on credit products as the main source of income, is required to have an optimum credit management through the application of KM. As related to this condition, BRI needs to build a system that allows the employee's to obtain easiness in accessing information and interacting with the parties involved in the credit management so that productivity can be improved significantly and the cost and time can be managed efficiently. PROBLEM ANALYSIS Following up on the problems faced in the credit management at BRI above, the author analyzes the problem by using KM approach through a survey to see if the current credit management problems can be overcome with KM practices. Based on the previous analysis of the strategic review on the concept of KM as an effort to optimize the management of credit in BRI, it is noted that the efforts to overcome constraint of credit management with KM initiatives have a positive correlation. Similarly, KM initiatives positively correlated to the current credit management. Based on these findings of a positive correlation, it can be analyzed that the implementation of KM is necessary to improve credit management in BRI. The practices of KM can be expected to solve the current problems including the long completion time of credit analysis, the overload work of the AOs, lack of access to data and business information, unintegrated monitoring and coaching, and the old standing credit settlement. There are several practices in KM system that can solve the above problems, as follows: Documentation Management Documentation management is related to the documentation system that can be accessed by all authorized credit staffs and documented electronically (electronic filing cabinet). Authorized credit staffs can edit the document and access information and data in accordance with the level of authority. The Application of documentation management are as follows: 1. Archive storaging in software: Current credit documentation management by using archive system managed by Credit Administration Division at BRI is now accessible to the system, yet it is not fully integrated. Archival storage system that requires a lot of space can be reduced with the archival storage software and inputted to the KM system. Thus, authorized credit staffss can access the documents at any time. File documents will be sorted so that the staffs will easily find the required documents in a short time. 2. Supervision and Monitoring Documentation Documents can be stored in a document management system such as a field trip report (LKN), monitoring reports, and others. With this system the credit supervisors can monitor through a document without having to go to the field. On site supervisory visit in order to develop and to monitor are still needed, but with KM syatem the frequency of credit monitoring can be increased as well as saving time and costs for work performed by each staff. 3. Credit Document Monitoring Document management is also related to the amount of work done, especially in the Branch Offices. Number of AO is limited while the number of work-load to handle is very high, from marketing, customer data collection process, the preparation of the analysis, negotiation, credit realization and monitoring. It is often that the document monitoring work jointly conducted with Credit Administration Division (CAD) abandoned, because of too many jobs to do within limited time. With on-line document management, it is expected that AO can monitor whether the documents and licenses are still valid and can control the progress of the fulfillment of the documents that have been required in the credit approval decision. Documentation management system must be supported by the accuracy and validity of data from the or 'no'). So that the existing data is
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Analysis of Cyber Learning Application Implementation and Use of E-learning Content for Learning Quality Improvement in Higher Education (Case Study at Sultan Agung Islamic University-UNISSULA)
nominal data. a. Identification of Respondents Respondents in this study were students and registered as a student UNISSULA active until the academic year 2011/2012 Currently Sultan Agung Islamic University (UNISSULA) has 12 faculties were divided into 28 courses. The total number of students amounted to 10845 students. b. Questionnaire distribution Data mining of student opinion about the implementation of Cyber Learning is done by Simple Random Sampling. 1000 questionnaires were distributed, it means that the 1000 samples is the subject of the respondents in the inclusion criteria, from the 1000 sample contained 384 samples that included in the exclusion criteria, consisting of 300 respondents that does not return the questionnaire or assumed respondents cancel filling the questionnaire and 84 respondents did not answer questions in the questionnaires consistently or field results cannot be read properly, so it can be concluded that only 616 questionnaires were declared eligible to be processed.
2.6.3. Data Processing and Analysis stages After the questionnaire data collected, tested the validity and reliability test and answer the questions contained in the questionnaire respondents. Data is valid if the value of the product moment (r) is greater than the table value. The data is reliable if the test results of questionnaires showed values> 0.6. Invalid data will be discarded and re-testing. Meanwhile, if there are concerns about validity and reliability, then continued with the chi square test (hypothesis testing). This test is done because the shape of the data respondent nominal data. a. Data Sufficiency test The number of questionnaires were processed as many as 616 of 10845 the eligible student population of UNISSULA. b. Validity and reliability of data Validity in the questionnaire can be calculated with manual calculations (Excel >> Pearson), with the following results: Table 5. Validity Questionnaire test Item Question
Value Product Moment
Table value
Description
Item Question
Value Product Moment
Table value
Description
1
0.107
0.08
Valid
23
0.364
0.08
Valid
2
0.229
0.08
Valid
24
0.61
0.08
Valid
3
0.169
0.08
Valid
25
0.5
0.08
Valid
4
0.325
0.08
Valid
26
0.366
0.08
Valid
5
0.46
0.08
Valid
27
0.55
0.08
Valid
6
0.53
0.08
Valid
28
0.514
0.08
Valid
7
0.513
0.08
Valid
29
0.276
0.08
Valid
8
0.52
0.08
Valid
30
0.399
0.08
Valid
9
0.49
0.08
Valid
31
0.4
0.08
Valid
10
0.5
0.08
Valid
32
0.154
0.08
Valid
11
0.341
0.08
Valid
33
0.37
0.08
Valid
12
0.53
0.08
Valid
34
0.37
0.08
Valid
13
0.541
0.08
Valid
35
0.311
0.08
Valid
14
0.6
0.08
Valid
36
0.375
0.08
Valid
15
0.56
0.08
Valid
37
0.51
0.08
Valid
16
0.473
0.08
Valid
38
0.45
0.08
Valid
17
0.45
0.08
Valid
39
0.45
0.08
Valid
18
0.511
0.08
Valid
40
0.52
0.08
Valid
19
0.58
0.08
Valid
41
0.48
0.08
Valid
20
0.59
0.08
Valid
42
0.5
0.08
Valid
21
0.535
0.08
Valid
43
0.55
0.08
Valid
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The 2nd International Seminar & Conference on Learning Organization Proceedings Item Question
Value Product Moment
Table value
Description
0.356
0.08
Valid
22
Item Question
Value Product Moment
Table value
Description
After testing the validity then testing reliability. Reliability test results are as follows
Fig. 1. Test of Reliability per item questionnaire
Data can be declared reliable measurement because of the value of the coefficient (Cronbach Alpha) of 0.6 or greater (>) of 0.6 c. X2 Test (Chi Square) Having tested the validity and reliability testing hypothesis test is then performed with the chi-square test to determine whether there are similarities or differences of the respondents gave their answers to the questionnaire. Chi Square Test Item Question 1 and then calculation and testing a similar hypothesis was also performed on the respondents' answers to the questions 2 to 43 in the questionnaire Table 6. Calculation of Chi Square recapitulation of all Item Question Question item
Chi Square calculation
Chi Square Table
Description
Question item
Chi Square calculation
Chi Square Table
Description
1
57.88
19.675
Ho rejected
23
100.39
19.675
Ho rejected
2
52.28
19.675
Ho rejected
24
59.19
19.675
Ho rejected
3
52.99
19.675
Ho rejected
25
93.09
19.675
Ho rejected
4
45.79
19.675
Ho rejected
26
31.3
19.675
Ho rejected
5
68.05
19.675
Ho rejected
27
95.20
19.675
Ho rejected
6
89.59
19.675
Ho rejected
28
16.96
19.675
Ho accepted
7
102.81
19.675
Ho rejected
29
132.46
19.675
Ho rejected
8
70.89
19.675
Ho rejected
30
38.18
19.675
Ho rejected
9
157.80
19.675
Ho rejected
31
43.44
19.675
Ho rejected
10
72.19
19.675
Ho rejected
32
25.97
19.675
Ho rejected
11
58.73
19.675
Ho rejected
33
14.7
19.675
Ho accepted
12
70.55
19.675
Ho rejected
34
36.17
19.675
Ho rejected
13
97.57
19.675
Ho rejected
35
17.85
19.675
Ho accepted
14
115.57
19.675
Ho rejected
36
18.18
19.675
Ho accepted
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Analysis of Cyber Learning Application Implementation and Use of E-learning Content for Learning Quality Improvement in Higher Education (Case Study at Sultan Agung Islamic University-UNISSULA) Question item
Chi Square calculation
Chi Square Table
Description
Question item
Chi Square calculation
Chi Square Table
Description
15
68.41
19.675
Ho rejected
37
72.43
19.675
Ho rejected
16
39.26
19.675
Ho rejected
38
41.14
19.675
Ho rejected
17
40.42
19.675
Ho rejected
39
60.91
19.675
Ho rejected
18
74.79
19.675
Ho rejected
40
75.84
19.675
Ho rejected
19
102.71
19.675
Ho rejected
41
55.54
19.675
Ho rejected
20
54.01
19.675
Ho rejected
42
75.92
19.675
Ho rejected
21
41.91
19.675
Ho rejected
43
89.80
19.675
Ho rejected
22
59.26
19.675
Ho rejected
2.6.4. Conclusions stages Contains the answers of research results is a summary of the discussion and the proof of the statement or the problems associated with the implementation of cyber learning in UNISSULA. Flow chart of the research methodology can be seen in the following Figure:
Fig. 2. Flowchart of research methods
3.
Results and discussions
3.1. Data Sufficiency Test The number of eligible questionnaires were processed. 616 refers to UNISSULA student population, amounting to 10845, then based on the number of data tables Krejcie stated enough. Based on a population of 10000 krejcie table for the number of samples is 370, and for a population of 15000 people, the number of samples is 375. Having tested the validity and reliability was found that all of the questions is valid and reliable. Validity stated accuracy
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and precision of a measuring instrument. While the reliability of a measure indicates the extent trustworthy or reliable.
3.2. Discussions of X2 (Chi Square) From square test results who wanted to know whether the respondents' answers students from 12 faculties are similar or not. It appears that of 43 of the questions are only a small part question stating H0 is accepted. Based on the hypothesis that built it can be stated that only a fraction of the questions that are answered by the same student respondents in 12 faculties. This indicates that there are different conditions - different in 12 faculties associated with the implementation of cyber learning.
3.3. Discussions of Data Processing With Descriptive Statistics Here are presented the results of data processing of the results of questions on the questionnaire in the format of descriptive statistics
3.3.1. Infrastructure of e-learning : a. Item Question 1: is seen that the majority of students in 12 faculties of respondents stated that they have a personal laptop that is used in the learning process.
b. Item Question 30: Respondents from 9 faculty expressed that their campus computer facilities are not reasonably available, the addition of computers needed for students in each faculty.
c. Item Question 31: Question similar review was conducted to determine whether the correct answer is still the same d. e. f. g. h. i. j. k.
student respondents associated with the presence of physical facilities to access the cyber classroom learning. Respondents from 9 faculty expressed insufficient computer facilities available Item Question 32: Respondents from 8 faculty over many claimed not. Item Question 33: Overall student respondents expressed that they always access the internet with Wi-Fi network facilities UNISSULA when on campus. This indicates that UNISSULA have internet network facilitated by the campus and the student needs in facilities where extremely high. Item Question 34: Respondents on average expressed that the Wi Fi or Hotspot areas can be found on campus and can be easily accessed. Item Question 35: Respondents on average often use Wi-Fi___33 for internet access than personal modem if it is on campus. It indicates that the student will need a very high smoothness of the Internet network. Item Question 36: Respondents were students of 9 faculty expressed no that is necessary to repair the existing facilities on campus Wi-Fi UNISSULA either in the form of network quality and quantity. Item Question 37: Respondents on average expressed that they access the services of a web of cyber learning UNISSULA from URL: www.unissula.ac.id. It indicates that students are familiar with UNISSULA website. Item Question 38: More than 60% of the average students of Unissula cyber-learning classes are accustomed to access from the web www.cyberlearning.unissula.ac.id. Item Question 39: Most of the 12 students from the Faculty of respondents expressed very easily accessible anywhere, anytime from any Internet-connected students. This indicates that the cyber classroom learning any time can be easily accessed by the user as long as he is connected to the Internet
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Analysis of Cyber Learning Application Implementation and Use of E-learning Content for Learning Quality Improvement in Higher Education (Case Study at Sultan Agung Islamic University-UNISSULA)
Fig. 3. Graph of Respondents answering 'yes' to the infrastructure component
Fig. 4. Average percentage of respondents answering 'yes' to the infrastructure component
From the factors of e-learning infrastructure can be known that the students will need physical facilities (computers and networks) is very high. There are some shortcomings that need to be addressed, namely: the number of computers available in each of the campus, the quality and quantity of Wi-Fi networks as a means of internet access.
3.3.2. Systems and e-learning applications : a. Item Question 7: From the respondents were distributed from 12 faculty, students of 5 faculty respondents expressed that they had been familiar with the functions of the menu - a menu that is in a class of cyber learning. While the student respondents from other faculties 7, less than 50% who claim to know the function of the menu on the cyber learning application. b. Item Question 25: Most of the students of 9 faculty respondents expressed that there has been appropriate menu or suitable for online learning. c. Item Question 40: Most of the respondents expressed that the student has a learning cyber services online helpdesk service that can be accessed by the user.
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Fig. 5. Graph of Respondents answering 'yes' to the components of system and e-learning applications
Fig. 6. Average percentage of respondents answering 'yes' to components of system and e-learning applications
Overall the components of system and e-learning applications in UNISSULA already well and is able for supporting the implementation of learning with an e-learning model.
3.3.3. Content of e-learning : a. b. c. d.
e. f. g.
Item Question 9: Respondents from 8 faculties expressed their assignments send through cyber learning is always accepted by the lecturers who gave the assignments. This indicates that e-learning system has been running. Item Question 15: Respondents from 12 faculties answered “no”. it indicates that not all lecturers in some faculty familiar with class of cyber learning Item Question 17: Almost the majority of respondents expressed students in 12 faculties cyber class is less attractive than the real class. Item Question 26: Most of the students expressed that the appearance of softcopy material contributing lecturers affect student enthusiasm for learning. Therefore, it is expected that the lecturers to be more creative in the process and display the material in the class of cyber learning. Item Question 27: More than 50% of respondents from 5 faculties expressed that lecturers has made a softcopy display interesting and creative in the cyber class learning. Item Question 28: Most of the respondents said no. This indicates that most of the lecturers in UNISSULA distributed in 12 faculties, yet cyber class manage them optimally. Item Question 29: In general, respondents tended to expressed “No”.
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Analysis of Cyber Learning Application Implementation and Use of E-learning Content for Learning Quality Improvement in Higher Education (Case Study at Sultan Agung Islamic University-UNISSULA)
Fig. 7. Graph of Respondents answering 'yes' to the components of e-learning content
Fig. 8. Average percentage of respondents answering 'yes' to the components of e-learning content
Content material affect student interest in class of cyber learning. If the information provided in the cyber class constantly updated, communicative and interactive, students will be interested in attending this class.
3.3.4. a. b. c. d.
e.
Actor Item Question 2: Most of the student respondents were distributed in 12 faculties expressed that they are accustomed to using the internet. It indicates that the student UNISSULA are familiar with information technology. Item Question 3: More than 50% of respondents expressed students almost every day they use the internet. This means that there is no reason for students not to access the class of cyber learning. Item Question 4: 85% of the respondents said they had cyber-learning account. This indicates that most of the students know that there is a class of cyber learning. Item Question 5: More than 50% of respondents from 8 faculty expressed they are very familiar with cyberlearning program, while students from 4 faculties, less than 50% of respondents say they are very familiar with cyber-learning programs. Item Question 6: More than 50% of respondents from 4 faculty declared that they frequently access the cyberlearning to support the learning process. While other faculty less than 50% of respondents who answered “yes”. This factor could appear because the existing content on the cyber classes less updates, less informative, so that students are likely not interested in accessing.
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f.
Item Question 8: Only the Faculty of Industrial Technology are more than 50% of the respondents used to send assignments through cyber classroom learning, while respondents from other faculties were less than the 50% who answered “yes”. This indicates that the lecturers at FTI quite active gave the material in class of cyber learning. g. Item Question 10: Unless respondents from FIKOM, FKG, FAI, more than 50% of respondents admitted students from other faculties that they always download the material from the lecturers in cyber classes. h. Item Question 12: more than 50% of respondents from F.Psi, FK, FE, FTI every lecturers in the department expressed they have used the cyber-learning in teaching and learning. While other faculty less than 50% who answered “yes”. i. Item Question 13: Less than 50% of respondents from 5 faculty who answered “yes” to the questions Lecturers always upload the material in the cyber classroom learning. Meanwhile, from the other faculties, more than 50% of respondents answered “yes”. j. Item Question 14: There are some faculty that more than 50% of respondents expressed that they have made use of the facilities Lecturer cyber learning when given assignments, giving announcements, discuss and organize quiz. k. Item Question 22: On average 74.92% of all respondents expressed that Cyber student learning can function optimally if the students and lecturers are able to cooperate actively in class of Cyber learning. l. Item Question 23: Unless respondents from 3 faculties, 50% more respondents than other faculty expressed agreement that the class is more fun than the real class if lecturers and students can interact with utilizing existing menu m. Item Question 41: Most of the respondents of 3 faculty agreed with the statement that the admin cyber learning easily contactable when there is a problem in the cyber learning class, while the students of the faculty respondents most other claimed not. n. Item Question 42: Only respondents from 5 faculty of more than 50% of respondents agreed with the statement that the Admin cyber learning provides a quick response when there is a problem with the account of cyber learning. o. Item Question 43: Most of the respondents stated that the Admin cyber student learning always be polite and pleasant when contacted students on issues related to cyber learning class.
Fig. 9. Graph of Respondents answering 'yes' to the actor component
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Analysis of Cyber Learning Application Implementation and Use of E-learning Content for Learning Quality Improvement in Higher Education (Case Study at Sultan Agung Islamic University-UNISSULA)
Fig. 10. Average percentage of respondents answering 'yes' to the actor component
Actor factors indicate that the lecturers be a factor that affects the activity of cyber classes. Because lecturer is able to be a motivator for students to follow the cyber learning class
3.3.5. Benefits of e-learning: a. b.
c. d. e. f. g.
Item Question 11: 91% of respondents said cyber learning is important and needed in the teaching and learning activities. It means that students are aware with the functionality and usability of cyber learning. b. Item Question 16: Only respondents from the Faculty of Industrial Technology are more than 50% of respondents expressed existence of a class of cyber student learning can replace face-to-face method of lecturers and students in a real classroom Item Question 18: More than 50% of respondents expressed the existence of a class of cyber student learning can help the learning process if they have no material that was given by lecturers in class Item Question 19: More than 50% of respondents expressed that the use of cyber-learning has been able to be supporting the learning process Item Question 20: From 6 faculty, 50% of respondents expressed that the use of cyber-learning has been able to improve the quality of teaching and learning in their majors. Item Question 21: Only from FK, FE and FTI were more than 50% of respondents expressed that cyber-learning can help improve the student's IP. While respondents from other faculties most claimed not. Item Question 24: Only respondents from students of FH, FTI, FIKOM more than 50% of respondents expressed that cyber pleased with the class so far. While more students from other faculties respondents who expressed dislike.
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Fig. 11. Graph Respondents answering 'yes' to the benefits of e-learning component
Fig. 12. Average percentage of respondents answering 'yes' to the benefits of e-learning component
Overall it can be concluded that the respondents agreed that if a class of students learning cyber useful to support the learning process that is in UNISSULA. The benefits that have been obtained are not yet optimal. It is related to other factors, namely: infrastructure factors, material content, which is not available in adequate portions and cyber perpetrators have not been able to proceed optimally 4. Conclusion This paper shows that students in UNISSULA expressed they are accustomed to using the internet and have been familiar with cyber learning. Almost all respondents agreed that if a class of students learning cyber useful in supporting the process of learning in UNISSULA. However, the benefits of which have not yet obtained the optimal and has no effect on the improvement of student achievement. The needs of students to physical facilities (computers and networks) in college is very high. There are some disadvantages that need to be improved such as the number of computers in the respective faculty, the quality and quantity of Wi-Fi networks as a means of internet access. Overall the system components and applications of e-learning is in UNISSULA expressed by the majority of respondents have a good student and was able to support the implementation of the course with a model of e-learning. Content material affect student interest in cyber classes, if the information given in class cyber constantly updated, more communicative and interactive course, students will be interested in attending this class Actor factors indicate that the lecturers be a factor that affects the activity of cyber classes. Because lecturer is able to be a motivator for students to follow the cyber learning class
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UPT Telematika UPNV Jawa Timur (2011), Pedoman Implementasi e-learning dan pengembanan website, UPNV , Surabaya Surjono, H. (2009). Pengantar E-Learning Dan Penyiapan Materi Pembelajaran. Yogyakarta: UNY. Henderson, A. J. (2003). The E-learning Question and Answer Book. New York, USA: American Management Association.
Wahono, R. S. (2007). Sistem eLearning Berbasis Model Motivasi Komunitas. Jurnal Teknodik No. 21/XI/TEKNODIK/Agustus/2007.
Dian Elviza (2008). Sistem E_Learning Menggunakan Sharable Content Object Reference Model (SCORM). Jurnal MEDIA SISFO Vol. 2 No. 2 , 65 – 77. [6]. Sugiyono. (2005). Statistika Untuk Penelitian. Bandung: CV. Alphabeta. [7]. Azwar, S. (2006). Reliabilitas dan Validitas. Yogyakarta: Pustaka Pelajar Offset. [8]. Hasan, M. (1999). Pokok – pokok Materi Statistik 2 (Statistik Inferensia). Jakarta: Penerbit Bumi Aksara. [9]. ANTA. (2003). Definition of key terms used in e-learning (version 1.00). Retrieved 7 October, 2005, from http://www.flexiblelearning.net.au/guides/keyterms.pdf [10]. Widiartha Putu A. (2008), Memahami Lebih lanjut Tentang e-Learning, Ilmu Komputer.Com
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Learninng Organnization using Coonversattional So ocial Nettwork fo or Social C Customer r Relatioonship Managem M ment Effoort Andrry Alamsyaah,1,2 Yahyya Perangin nangin,1 Gabriel G Nurh rhadi,1 1
Schoool of Econom mics and Busine ness, Telkom U University, Ind donesia E-mai ail: [email protected] ity.ac.id 2 School off Electrical En ngineering andd Informatics, Institut I Tekno ologi Bandungg, Indonesia
Abstract A The T challenge of each organnisation is how they adapt to the shift of o more comp plex technologgy such as mobile, m big datta, in nterconnected world and Internet I of th hings. In ordder to achievee their objective, they muust understan nd how to taake ad dvantage of interconnected individuaal inside andd outside thee organisatio on. Learning organisation n continues to trransform by listening andd maintain connection c w with their cou unterparts. Customer C relaationship man nagement is an im mportant sourrce for business organisations to grow w and to assu ure their futurre. The com mplex social network, n wheere in nterconnected peoples gett information n and get innfluenced very quickly, certainly a big challeng ge for busineess orrganisations. The combinaation of thesee complex te chnologies prrovides intriguing insightt such as thee capabilities to listen what thee markets waant, to understtand their maarket competition, and to understand thheir market segmentation. In his paper, as a part of orgganisation tran nsformation, w w a business organisationn mine onlinee conversationnal th we show how in n twitter relaated to their brand issuee and analysse them in th he context of o customer rrelationship management m to ex xtract severall insight regaarding their market. m © 2014 Andry Alamsyah, Yahya Y Perangin nangin, Gabrieel Nurhadi. Pu ublished by Telkom Pub. L Ltd. Selection and ppeer-review unnder responsib bility of The IISCLO, Deparrtment of Com mmunication, U University off Telkom, 203442 Bandung, B Indonesia. Keywords: K soocial networkk analysis; customer rellationship management; m complex net etworks; learn ning orgganization; brrand awareneess
1. Introduction In evvery organizaation, there arre challenges on how they y adapt to theeir environmennt in order to o sustain theiir survival or too increase theeir influence. Continuouslyy transformed d organization ns are desirabble, but yet it is a difficullt and complex process to acchieve as an organization becomes larg ger. One of th he examples iis organizatio on technologyy ogy adoption lifecycle deescribe most of individuaals will be conservative too adoption, thee famous Beell’s technolo new technoloogy. This factt contradicts to the urgenttly needed raapid organisational transfoormations in order o to adappt and to comppete. Learninng organizatio on proposed a framework k on how an n organizatioon think and d act in more complex andd interconnectted way [1]. This framew work providess opportunity y on how ann organization n transform inn smart way. The arrival of soocial media provides p a coonversation pllatform that stimulates thee generation of data withh d rich variety y. These charaacteristics lead to the term m characteristics such as largge volume, faast streaming, real-time and c help org ganization to have thoroug gh knowledg ge by listeninng to the crowd of sociaal of Big Data. Big Data can
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media and Innternet users [2]. Knowled dge managem ment is enrich hed by feeds of these kinnds of data [3][4]. [ Havingg advanced knnowledge willl certainly help h to speedd up organizations transfo ormation to be more adaaptive to theiir environment. Customer reelationship maanagement wiill also imprrove significaantly, becausee the decision maker have wledge to act to customer needs dynam mically and ev ven personally y. enough know Busiiness organizzation important tasks aree to listen and a to know w what markket wants an nd what theiir current comppetitions are. The large majority of data collectiion effort is using offlinne approach directly from m population ussing methodss such as questionnaire, innterview, sno owball sampling, contact tracing, random walk andd direct inform mations. Thesee methods arre practicallyy very good if we deal with w small-meedium numbeer of data. Inn the case of laarger crowd such s as conveersations in soocial media those t approaches are very expensive, time consum ming process and having the accuracyy issue. Thesse shortcomin ngs are typiccal to offlinee data collection appproach, wheree they get com mplicated wheen population n is getting bigger. The objective of this paper is to show hoow we can use u social network based on online co onversation too ork/market suuch as the inffluential actorr in the netw work, market segmentationn, understand thhe dynamics of the netwo how informaation flow in the netw work, and soome others. These informations aree important for businesss organisations to react aggile to the dynamics d of the market. We conduct the experim ment using so ocial networkk conversation in social meedia Twitter. Those conveersations are modeled as social netwoork models baased on graphh y, diameter, trees, connecctivity, shortest-path, node theory. Graph theory proovides some properties suuch as density p cann be expandeed to measu ure networkk topology, which w will be degree and ssome others [5]. Those properties explained in nnext chapter.
2. Sociial Networks Models for Complex Reelationship To uunderstand paattern and beh havior of soccial networkin ng, they are modeled m baseed on graph theory. Graph ph theory is a bbranch of maathematics coombinatorics where we reepresent entitiies as verticees and relationship amongg the entities aas edges [6]. Once we hav ve network, w which consistss of vertices and edges, w we will have the propertiees such as the density of global g netwo ork or partiall network, network diameter, the gian ant componen nts, clusteringg a other useeful informattion. Those properties p aree important as a metrics andd coefficient, nnumber of coommunities and quantitative measures of the social network. n Com mplex relatio onship is bassed on Comp mplex Networrk [7], whichh opological feeatures that do d not occur in simple nnetwork, but often o occur inn defined as nnetwork with non-trivial to real-world neetwork. Sociaal network is one examplee of complex networks. Complex C relatiionship descrribe real-worldd social relationnship, which rarely simplee and straighttforward to predict, p involv ving human eemotion and the influencedd by human cloose-ties.
figure 1. Network N mod del of interacti tion between employees e in knowledge sh sharing contex xt The basic of soocial network k analysis deescribe as th he case study from know wledge transfer inside ann ng IT subject in figure 1 [8]. The vertices represennt individual and a the edges organization of 34 employyees regardin b indiv vidual. The rredder the co olour signifies represent inteeraction, in thiis case, it is the transfer knowledge between the more inteeraction an inndividual has.. From this kknowledge nettwork we fou und key relattionship such as [8]: a. IIt is very impoortant to know w what someoone knows; th his is related to o the ability tto analyze knowledge k andd
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skills of organization members and also evaluate the overall cohesion of the network. b. We can gain fast access to certain people in the network; this is related to the ability to identify the most central/influential members of the organization. c. We can create workable knowledge through cognitive engagement; this is related to assess those who are not well connected in the network, these people are probably representing the underutilized assets d. There are learning processes in trust relationship; this is related to analyzing the network by highlight ties between people who we will trust in knowledge sharing information. From the case study above we learn that we can better understand the dynamics of network formation and hopefully be able to intervene at the times of knowledge creation and sharing. The four keys relationship can be viewed separately as different aspect of knowledge management inside organizational network and also can be view accumulatively. In short, we have the answer of the question on who should we turn to ask for knowledge or information among our co-worker regarding IT subject. From the figure 1, we see that employee number 1, 33 and 34 are the most connected peoples, which means that they are the most likely peoples turn for advice. We also found a subgroup contains of six employees on the right side of the network, this subgroup will disconnect from the network if employee number 1 is not present to the network. The existence of this subgroup signifies inefficiency in knowledge utilization where member of the subgroup are not maximizing expertise utilization from the network. The strategy of strengthening out ties between individuals is important solution to broader the information access to the rest of the network. The study of complex social relationship described above is called Social Network Analysis (SNA). SNA provides network quantification based on graph theory. Some often-used metrics in SNA are centrality, community detection, homophile, reciprocity, structural holes, bridge, overlapping communities, component, and connectivity [6] [9] [10]. The metrics are important indications on how good or bad our network is and it can be used to as comparison tools between several different social networks. From the description above, it is clear that our research depends on network formation or topology and it does not depend on the content of communication. The workaround strategy for this approach is by defining context of conversation in the first place and then analyzes network topology formed by specific context.
3. Customer Relationship Management In General, Customer Relationship Management (CRM) is a strategy to oversee the c u s t o m e r activities [11]. It has been the strategic approach that most companies had taken in trying to figure out how to supervise their customer behavior. The methodology and technology used in CRM are destined to increase customer repeat purchase. Gathering data about the customer and tracking all customer activities were the way that CRM was used to find out individual customer’s thinking. The positive customer experiences are mostly based on operational response. The feedbacks from customer are processed into CRM system to create better customer strategy. The objectives of CRM are to ma x imiz e customer value, to increase company profitability and shareholder value [12]. Traditionally, there are three main parts of CRM: Operational CRM for customer automation process, Collaborative CRM for providing customer communication channels, Analytical CRM for producing customer behavior i n f o r m a t i o n b a s e d o n d a t a mining algorithm and process. In SCRM, those functions are taking advantage of communities in social network and become social sales and social marketing. The difference between the two approaches is shown at figure 2.
The exponential growth of social media / Web 2.0 and the shifted of social communications to more on customer controls are leading to the birth of new strategy called Social Customer Relationship Management (SCRM) [13]. SCRM designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in trusted and transparent business environment. It is the company response to the customer’s ownership of the conversation. One of SCRM strategies that we propose in this paper employs Social Computing approaches [14], which capture online conversation to understand users actions, user preferences, users behaviors and also the overall implications for the network. By using SCRM, the conventional CRM have developing broader than just a media to retain current customer. The presence in social network services has positive recognition from potential customers. One of the advantages of this system is considered important for brand awareness effort.
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figuree 2. The differrence approacch between CRM CR (left) and d SCRM (righht) [11] The SNA and User U Generateed Content (U UGC) togetheer with data and user proofiles are fou ur factors thaat h gaining access to cusstomer insigh ht. SCRM too ols provide thhe means to capture dataa, need to be ccaptured to help the profiles, and to creatte the experieence maps w which in turn help develop p the real innsight into customers c thaat mers. Thosee actions were provide whatt is a genuinnely personalized and delinneable experiience for indiividual custom not supportedd by traditionnal CRM. Oveerall, the com mparative feattures or functtions betweenn CRM and SCRM S methodd shown in tablle 1. [11]
Table 1 thhe comparativ ve features orr functions bettween CRM and a SCRM m method [11] CRM Definition: D C CRM is a ph hilosophy and a businesss strategy, supp ported by a system s and a technology, designed to improve human h interaactions in a business b env vironment.
SCRM n: Social CR RM is a phhilosophy and a businesss Definition strategy, supported s by a system annd a technolo ogy, designed d to engagee the custom mer in a collaaborative in nteraction thaat provides mutually m beneficial value in a trusted & transparen nt business environment. e
Tactical and o operational: Customer C straategy is part of corporate sstrategy.
Strategic: Customer strrategy is corpoorate strategy y.
Relationship R between the t compan ny and thee customer w was seen as a enterprisee managingg customer - p parent to chilld to a large extent. e
Relationsh hip between the companny and the customer arre seen as a collaborativ ve effort. Annd yet, the company c musst still be an enterprise in all other aspeects.
Focus F on com mpany not on customer relationship
Focus on all iterations of the relatioonships (amo ong company y, ustomers) annd specificallly focus on n business partners, cu g, engaging and enablingg the 'influential' nodes identifying
The compan ny seeks to lead l and shaape customerr opinions ab bout produccts, servicess, and thee company- cu ustomer relatiionship.
The customer is seen as a a partner ffrom the beg ginning in th he developmeent and imp provement off products, services, and d the compaany-customer relationship.
Business B foccus on produ ucts and serv vices that satisfy customers
Business focus on environments & experiences that engagee customer.
Customer faccing features: sales, marketing and support.
Customer facing both features f and tthe people wh ho is in d an nd deliveringg those featurees. charge of developing
Marketing M focused on n processes that sentt improved, ttargeted, hiighly specifi fic corporatee messages m to customer.
Marketing g focused on building relaationship witth customer engaging customer in n activity aand discussio on, observing g directing co onversations and activ vities among g and re-d customerss.
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Learning Organ anization using Co onversational Soccial Network for Social S Customer Relationship Man anagement Effort
Intellectual I p property proteected with alll legal might m availaable.
Intellectuaal property crreated and ow wned togetheer with the customer, partner, supp plier, and probblem solver.
Insights I an nd effectiveeness weree optimallyy achieved by y the single view of th he customerr (data) acrosss all channelss by those wh ho needed too know. k Based d on 'compllete' customeer record andd data integratiion.
Insights arre a considera ably more dyynamic issue and a are based d on custom mer data, cusstomer persoonal profiles on the web b and the social cha aracteristics associated with them m, n in the actiivity acquisittion of those customer participation insights.
Resided R in a ccustomer-foccused business ecosystem.
Resides in n a customer ecosystem e
Tools are asssociated with automating Functions. F
Integrates social media a tools such ass blogs, wikiss, podcasts, working toolss, content shaaring tools, usser social netw communitties into apps//services
4. Experiment and Analysis To sshow SCRM implementatiion, we condu duct an experriment using conversatioon data from social media Twitter. We crawl the conversation c through t Twittter Applicatiion Programm ming Interfacce (API). Thiis API offerrs p uniiform format.. Twitter AP PI is much m more efficien nt than usingg simpler way of gatheringg data by providing m which h proved diff fficult regardin ng variety fo ormats and ddata types available on the technique succh as web mining, web. Anotheer reason is the t practicalitty of Twitterr as open platform servicces and one of the mostt active sociaal network services for onlinne conversatio on in Indonessia. Our research workflow w is shown at figure 3.
figure 3. T The research workflow
figure 4. The complexx social netwo ork conversati tion model
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ommunication n company inn Indonesia, which is PT T. For the experimeentation, we choose one of big teleco ypotheses andd observatio ons, Indonesian telecomm munication su ubscribers haas XL Axiata Tbk. Based on our hy plain about unsatisfactory y service th hey have reeceived on social mediaa, tendency to ppost their opiinion or comp including Tw witter. The Twitter T data crawling is set for perriod July 1-3tth, 2013 for all tweets that mentionn keyword andd hashtag “XL XL”, “XLCaree”, “XL123”. We get unddirected netwo ork with 141 3 peoples in nvolved in the conversation and 1026 coonversation between thosee peoples. Th hus, we get 1413 nodes annd 1026 edg ges. The resullt n figure 4. of the whole network grapph model is in o find the moost influentiaal actors in th he network. IIn this paper, we focus onn We apply centrallity metrics to d betweeenness and clooseness. The degree centraality (DC) is tto measure to otal number of o three centralities metric: degree, c acto or in the netw work. Once we w know DC value, we caan identify which w actors inn connections oor the most connected the conversattion network that actively y connected tto many otheer actors, prob bably they ar are the one who w respond too many questioons from the crowd. c The betweenness cenntrality (BC) is to measure the importannce of actor location l in the network. BC value will shhow which actors a are the hub or bridg ge between different d part of communitties / group inn ny structural hole h in the network, their presence are strengtheningg the network. The hub actoors is important to fill any C) is to measu ure how fast an actor reacches all otherr actors in the the network sstructure. Thee closeness ceentrality (CC whole networrk. By knowiing the CC value, v we cann assign set of o actors who will spread thhe information n fastest to the whole networrk. Our centraality metric measurement m rrank and valu ue is shown att table 2.
Ta Table. 2. Degre ree centrality, betweennesss centrality an nd closeness centrality c metr tric value and rank
From m the table 2.., we see thatt @XLCare iss consistently y at the top off all centralityy measurement. Since thiis account is thhe official acccount of the company, c thee result is nott surprising us. In order to better understand u the community / social / crowd contrib bution, we rremove the official acco ount from thhe end resullt. We foundd @PejuangKuuis is non-offficial account, while its im mportant acto or, it does no ot sufficientlyy generate and a involve inn the conversattion. This is a warning for f the compaany that theirr network do oes not form closed- tiess, the role of o crowd are m minimal, and they rely heavily on offiicial account. In the futurre, they needd to implem ment a strategyy to maximize the role of the t crowd in support brannd or customeer relationship p managemennt activity. Wheen we look innto content of o the converssation, we go ot 745 conveersation (52.722%) contain ns of negative sentiment, whhich mainly bad b opinion and a complainnts to customeer services. We W got only 1102 conversaations (7.22% %) positive sentiiment. Whenn we look at this compossition, the ten ndency in tod day online ssocial media people speakk up when theey have bad experience e orr they are acctually having g trouble with h the servicees. Our ability y to implemennt RM strategy is i important iin controlling the content or o the structurre of the netw work. Using the effective and efficient SCR a will certainly help p us with the effort to form m the network k as we intendd knowledge off SNA and all the metrics available to.
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5. Conclusion This paper has shown a workflow of a SCRM effort though Twitter. The SCRM effort can be modeled using complex social network. To guarantee the effectiveness of SCRM effort we need to implement a strategy with objective to increase closed-ties between actors in network, which lead to self- healing management network. The key of our preferred network found on positive sentiment. From our observations, the strategies such as thematic effort, contextual storytelling, and appreciation to customer can lead to positive vibes in the network. For the future research, there is a need to find the academic connection between network with positive sentiment with willingness of the crowd to help the communities or willingness to defend the brand / organization. This study can be enhancing, by extending the length of observations to get larger data set / conversation for more accurate result. Another path that might be interesting to follow is to combine several social network services crawling data for more complete insight about what actually happen in the market. The metric combinations will also certainly useful to identify individual behavior in the network. SCRM implementation is one way to apply smart learning in business organization facing the more interconnected world. Data and tools are widely available, and it is up to the top management whether they are going to adapt the new way to get closer to the customer. Most of organizations will have trouble to embrace this approach because of the lack of sufficient people who understand working with stream and large quantity of data. Acknowledgement: NoLimitID who provide us with Indonesian Twitter data conversations to supports this work.
References: [1]. Senge. P.M. The Art and Practice of The Learning Organization: The New Paradigm in Business: Emerging Strategies for Leadership and nd Edition. London; McGraw-Hill. 1990 [2]. MacAfee. A, Brynjolfsson. E. “Big Data: The Management Revolution”. Harvard Business Review Magazine. October 2012 [3]. Hislop. D. “Knowledge Management in Organizations”. Oxford University Press. 2005 [4]. Alamsyah. A. “Role of Social Network Analysis in Knowledge Management”. Jurnal Manajemen Indonesia Vol 12 No 4. Pp 309-314. 2013 [5]. Diestel. R. “Graph Theory: Electronic Edition 2005”. Springer-Verlag Heidelberg, New York, 1997, 2000, 2005 [6]. Scott. J. “Social Network Analysis Theiry and Applications”. Sage Publications. 2000 [7]. Cohen. R, Havlin. S. Complex Network : Structure, Robustness and Function. Cambridge University Press. 2010 [8]. Alamsyah. A, Peranginangin. Y. “Effective Knowledge Management using Big Data and Social Network Analysis”. International Journal of Learning Organization: Management and Business Vol 1 No 1. 2013 [9]. Newman.M.J. “Network: An Introduction”. University of Michigan and Santa Fe Institute. Oxford University Press. 2010 th [10]. Alamsyah. A, Rahardjo. B, Kuspriyanto. “Social Network Analysis Taxonomy Based on Graph Representation”. Proceeding of The 5 Indonesian International Conference on Innovation, Entrepreneurship, and Small Business. 2013 [11]. Mosadegh. M.J., Behboudi. M. “Using Social Network Paradigm for Developing a Conceptual Framework in CRM”. Australian Journal of Business and Management Research. Vol 1, No 4, pp 63-71. 2011 [12]. Payne.A, Holt. S, Frow.P. “Integrating Employee Customer and Shareholder Value Through an Enterprise Performance Model: an Opportunity for Financial Services”. International Journal of Bank Marketing. 18(6), pp 258-273. 2000
Organizational Change. 2
[13]. Greenberg. P. “The Impact of CRM 2.0 on Customer Insight”. Journal of Business and Industrial Marketing. Vol. 25 Issue 6. pp 410-419. 2010 [14]. Wang. F, Zeng. D. “Social Computing From Social Informatics to Social Intelligence”. Journal of Intelligent System IEEE. 2007
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L Lecturerrs Appreciation L Languag ge Throu ugh Sociial Mediaa Asstadi Pangaarso Faculty F of Econom mic & Business, Telkom T Univerissty Jl. Telekom munikasi no. 1 Teerusan Buah Batuu, Bandung, 40257 57, Indonesia
Abstract A This paper disccussed about using u the idea of social meddia to convey lecturer appreciation languagge in order to o fulfill Busineess Administration A P Program of Stuudy (Adbis) pu urposes. Adbiss lecturers mottivational hygieene factor probblem caused jo ob dissatisfactiion sp pecifically in innterpersonal reelationship aspeect. The use o f appreciation language affecct lecturers inteerpersonal relaationship also job saatisfaction that ultimately affe fects to the fulffillment of Addbis purposes. Social media as a a form of innternet-based communication c is ex xpected to be uused to conveyy appreciation language amongg Adbis lectureers. The method used in this paper is the usse of a secondaary an nalysis of data. This paper proovides a possiblle view of the rrole of social media m for organiizational effectitiveness. Furtheer research can be do one more detail further on finnding the empirrical connectionn between apprreciation languaage, interpersonnal relationship p, motivation, job saatisfaction and organizational purpose fulfilllment; knowingg primary apprreciation languaage for each leecturer both perrsonally and ass a whole; w finding thhe finding the type t of social media m most suiteed to convey th he appreciation language; findi ding the type of social media thhat iss most convenieent and commoonly used by Adbis lecturers aand the way to o convey the ap ppreciation langguage between lecturers throuugh th he suitable sociaal media.
© 2014 The Auuthors. Publishhed by Telkom m Pub. Ltd. Selection and ppeer-review unnder responsib bility of The IISCLO, Deparrtment of Com mmunication, U University off Telkom, 203442 Bandung, B Indonesia.
Keywords K : Orgaanizational Effectiveness; Apprreciation Languuange; Social Media M
1.. Introduction n Organnization may be b defined as a group of inndividuals, laarge or small, that is coopeerating under the direction of ex xecutive leadeership in accoomplishment of o certain com mmon object [20]. Anotherr definition off organization n is social uniity (eentity) that coonsciously coordinated, with a limitationn that can bee identified, which w works oon the basis of o continuoussly reelative to fulfiill a common goal and or grroup of goals [31] [35]. Go oal fulfillment organization indicates the extent to which an n organizationn realize its gooals, it is the effectiveness e oof the organizaation [12] [31] [35] . Prograam of study (prodi) Business Adminisstration (Adb bis) is part of Communicaation and Bu usiness Facultty. n and Businesss Faculty is part Communicatio C p of the Tellkom University (Tel-U). Adbis A has purppose through the t combined of
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vision, goals and mission becoming be top of mind prodi in Indonesia (2017), and it is known in Asia (in 2021) that produces an output of business administration undergraduate through a transparent and accountable world class academic education management. There is still time range to be able to fulfill the Adbis full purpose, particularly in terms of fulfilling the vision. Vision can be fulfilled through the implementation of the mission. As a result of the implementation of the mission will result in the fulfillment of objectives and goals, the fulfillment of objectives and goals to fulfill the vision. So the purpose Adbis fulfilled. Using Indonesian Education Minister Prof. Muhammad Nuh statement, the key to success of education is teachers or lecturers [39]. Lecturer is an important element in the higher education institution of to produce graduates who play a direct role as one of the important goals of higher education institutions. In the previous research that aimed to know how well the work motivation of Adbis lecturers found problems in interpersonal relationships between Adbis lecturers [30]. The research was aimed to determine how well Adbis lecturer work motivation. Motivation is a set of energetic forces that originate to give behavior purpose and direction [24]. Two dimensional Herzberg's work motivation variable that consists of 10 indicators, the interpersonal relationship assessment has categorized as dissatisfied. Therefore it is necessary efforts to improve interpersonal relationships between Adbis lecturers as part of efforts in order to fulfill Adbis purposes.
2. Literature Review
2.1. Motivation If it is associated with the effectiveness of the organization, then there is a relationship between motivation and organizational effectiveness. There are positive relationship between employee motivation and orgnizational effectiveness [24] [27]. This paper discussed the motivation is based on research conducted by Herzberg. What is interesting from motivation studied by Herzberg is because the focus of motivation in Herzberg theory is job satisfaction. Job satisfaction as the extent to which one’s job is perceived as fulfilling important values [24]. Job satisfaction is one of the main variables for the level of employee commitment to work [40]. Greater job satisfaction can translate into higher productivity levels [25]. There is a positive relationship between employee satisfaction and productivity [33]. Motivation and roductivity is part of the criteria of organizational effectiveness [4]. There are two main factors of motivation from Herzberg theory, namely factor motivators and hygiene factors. Motivators factor is factors which consist of things that can allow workers to achieve the very high level of job satisfaction (satisfied / highly motivated / positive). Hygiene factor is a factor which consists of things that can allow workers to achieve the very low level of job satisfaction (dissatisfied / lowest motivated / negative). Between motivators and hygiene factors, there is a limit which is a condition in which a worker does not feel job satisfaction (no satisfaction / zero / neutral).
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Leecturers Appreciat ation Language Through Th Social Meedia
Figure F 1. Frede derick Herzberg rg Motivation--Hygiene Theoory (http://kellas.wordpress.com/2008/10/ 0/18/organisasi si-industri-6/) From the figure aboove shows thee things of thee hygiene facttors that can cause a workerr became disssatisfied. One of th he hygiene facctors, which becomes b a problem in Adbi s is interperso onal relationsh hips. Be a prob oblem becausee the assessmeent reesults of inteerpersonal rellationships between Adbiis lecturers in n the dissatisfied categorry. Dissatisfieed category of in nterpersonal rrelationship may m cause Ad dbis lecturer become disssatisfied. Disssatisfied indiccate that lectu urers don’t get g in nvolved in theeir job or put forth the extra effort to do a good job. It I is expected that the entiree parts in hyg giene factor inn a go ood category that allows Adbis lectureers preventedd from dissatiisfied. The saatisfaction off hygiene neeeds can preveent diissatisfaction and poor perfformance, butt only the satiisfaction of th he motivation factors will bbring the type of productiviity im mprovement ssought by coompanies [14]]. Dissatisfiedd lecturers co onditions also o would hindder the fulfilllment of Adbbis pu urpose. Eachh lecturer inddividually sho ould prevent him/her enteering the disssatisfied categgory with, pay attention to in nterpersonal reelationships. By B preventing g entry dissattisfied categorry will increase the chancees of Adbis leecturer fulfillinng saatisfaction. Thhus to prevennt entry dissattisfied categorry is the first step to fulfill the purposee of Adbis. Due to fulfill thhe pu urpose of Adbbis each lecturrer should be satisfied, so too be satisfied d lecturer are not n categorizeed as dissatisfiied. So from thhe po oint of view oof hygiene facctors (which has h the potenttial to lead to dissatisfied th hat is interperrsonal relation nship) should be b minimized. m
2.2. 2 Interpersonnal Relationshhip Overaall interpersonnal relationships take placee in a great variety of co ontexts, such as family, friends, marriage accquaintances, work, and neighborhoodss [23]. Basedd on Herzberg g’s theory, in nterpersonal reelationship is the interactioon beetween indiviidual and supeeriors, peers and a subordinattes, these relaations can incllude either woorking relation nships or pureely so ocial relationsships on the joob [15]. Positiive (good) inteerpersonal rellationship, succh as friendshhips at work caan improve joob sa atisfaction, jjob commitm ment, engageement and pperceived org ganizational support [6][[11][17][29][3 33][36][38][411]. Organizational O performancee is influenced d by the conddition of how w interpersonal relationshhip plays a ro ole in managinng em motional reguulation, commuunication, and d appreciatio n of the work k environment [37]. To fullfill Adbis purrpose be donee jointly by thhe lecturers ass a team. Team m is an energeetic group of people who are a co ommitted to aachieving com mmon objectiv ves, who worrk well togeth her and enjoy y doing so, annd who produ uce high qualiity reesults' [9]. “H Healthy team relationships are characterristic of unusu ually successfful teams”[21 ]. Cohesion is i the degree of atttraction mem mbers feel tow ward one anoth her and the teeam; 'it is a feeling fe of deep p loyalty, of eesprit de corp ps, the degree to
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which w each inddividual has made m the team m's goal his or her own, a seense of belong ging, and a feeeling of moraale'[1]. Figuree 2 beelow show inn order to builld team cohesion will be prresented, inclu uding: apprecciation, incenntive, relevancce, performannce measurement m aand interpersoonal relationsships.
Figure 22. Team Coheesiveness (http://en.wiki ( kibooks.org/wiiki/Managing__Groups_and_ d_Teams/Whicch_attributes_aare_fundamenntal_to_team__cohesion%3F F) 2.3. 2 Appreciatiion Language The ggreatest need of a human being is psycchological susstainability, to o be understoood, to be reccognized, to be b ap pproved, to bee appreciated [7]. Appreciattion is an impportant part off the motivatio on, the things tthat can be ap pplied to, amonng otthers, held m motivate sociaal interaction and teamwoork; giving th he challenge;; and organizzed employee appreciatioon prrograms [19]. A major facttor in job satissfaction is wheether people feel f appreciateed for the worrk they do or do not. The onne th hat causes a person to leavee their work because b is nott appreciated [5]. [ Small perrcentage of em mployees leav ve a job in ordder to o get higher w wages [3]. Subm mission of app preciation in tthe workplacee has a positive impact [21].. The T advantage of using apprreciation langu uage [5]: 
Reducction in emplooyee turnover;;

The leevel of attendaance and prod ductivity increeases;

Greateer consumer satisfaction; s

More positive relaationships beetween superiiors, subordiinates and co o-workers; thhis is proof th hat the language
contribute to the appreciiation of interrpersonal relattionship. 
Overaall more positiive corporate culture c and woork environm ment.
There T are five appreciation language [5]: 
Wordss of Affirmatiion Wordss, both oral annd written, caan be used to affirm and en ncourage those around us. Some people prefer personnal one-onn-one commuunication, whiile others valuue being praised in front of o others (but it is importan nt to know thhat relativvely few people like to receive public afffirmation in front of a large group).

Qualitty Time
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Personal, focused time and attention with their supervisor is highly affirming for some. But others enjoy different types of time — “hanging out” with their coworkers, working together as a team on a project, or just having someone take the time to listen to them. And the type of time desired can differ significantly depending on whether it is with colleagues or with their supervisor. 
Act of Service Assisting in getting a task done can be extremely encouraging to a colleague. Helping a teammate “dig out” from being behind, working collaboratively on a project that would be difficult to do alone, or just working alongside with them on a task, are all ways to demonstrate appreciation for their efforts.

Tangible Gift The key to an effective gift in the workplace is the “thought,” not the amount of money spent. Taking time to notice what your colleagues enjoy (chocolate, coffee, cashews), observing their hobbies and interests (sports, books, crafts) and buying them a small related gift shows that you are getting to know them as a person and understand what is important to them.

Appropriate Physical Touch While we acknowledge that physical touch is less important in work-based relationships, and the potential for abuse exists, we still find that appropriate physical touch is meaningful. Usually, it occurs spontaneously and in the context of celebration — a “high five,” fist bump, slap on the back, or congratulatory handshake. To not touch one another at all often leads to a cold, impersonal environment.
2.4. Social Media Internet has emerged as the outstanding innovation in the field of communication in the history of humankind [2]. Internet is an essential communication medium in professional as well as personal life [10]. The internet offers a wide variety of communication tools like search engines, web pages, e-mails, e-books, e-journals, e- newspapers, internet banking, internet telephony, conferencing, multi-media sharing, online newsrooms, gaming, shopping, blogging, and importantly, social networking [25]. One of the important role the Internet is representative of the physical with the virtual in terms of identities, attributes and personalities; minimize the limitations of space and time to participate; interacting; communicate; share, exchange information. Social media depend on mobile and web-based technologies to create highly interactive platforms through which individuals and communities share, co-create, discuss, and modify user-generated content. Social media introduce substantial and pervasive changes to communication between organizations, communities, and individuals [13]. The picture below shows the functions of social media.
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Figure 3. S Social technollogies includee a broad rangge of applicatio ions that can be b used both bby consumerss and enterprisses (hhttp://orgeffecctiveness.ca/po post/305982900 0018/1-3-t-reas asons-social-m media-affects-eemployee) In the otherr term social media is a gro oup of Interneet-based applications that build b on the iideological an nd technologiccal fo oundations off Web 2.0, andd that allow th he creation annd exchange of o user-generaated content [ 18]. Andreas Kaplan, devide seeven differennt types of social s media: Collaborativve projects (for (f example, Wikipedia); Blogs and microblogs m (ffor
example, ex Twitt tter); Social news, n networrking sites (fo for example, Digg and
Leakernet)); Content coommunities (ffor
example, ex YouT Tube and Daily lyMotion); Soocial networki king sites (for example, Faccebook); Virtuual game-worrlds (e.g., Worrld of Warcraft); V Virtual social worlds w (e.g. Second S Life).
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Figure re 4. Social Media Me Landscappe (http://www w.fredcavazzaa.net/2008/06/0 /09/social-meddia-landscape/ e/)
Figure re5.
Sociaal
Media
Landscap ape
Categgorizing
The T
sociaal
Media
Landscap ape
(https://www.deloittte.com/assets/DcomCanadda/Local%20A Assets/Docum ments/ERS/ca__en_ers_enterp prise_20_050611.pdf.) Most organization look social media m to incrrease productiivity through communicatiion, foster co ollaboration annd en nhance stakehholder relationnships [8]. So ocial media iss very possiblle to use linkeed with interppersonal relationships. Usinng so ocial media heelps to get peeople working together, andd by doing thiis, they can offten develop m more and bettter relationshiips [1 17]. Gambar ddibawah ini menunjukkan m bahwa b social m media dapat diigunakan untu uk internal colllaboration.
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Figure 6. Business Area Ar for whicch professionnal worldwidde use sociall media augu gust 2009, (% % respondent nts) (hhttp://techtoexxecs.com/) 3.. The Conclu usion The possibiility the use of o social mediaa to convey apppreciation laanguage amon ng Adbis lectuurers in order to make a goood in nterpersonal reelationship. Emergence E of relationships between variiables, that is: Appreciationn Language  Interpersonnal Relationship R  Motivation  Satisfaction  Organizaational Effectiiveness. There are ssome limitatioons to the usee of social m media to conveey appreciatio on language ssuch as for taangible gift annd ap ppropriate phyysical touch. this t is becausee due to the innvolvement of social mediaa to bring the physical hum man presence for f diirect contact. So the five tyypes of the ap ppreciation off language thaat may be dellivered througgh social med dia are words of afffirmation, quuality time andd act of servicces. The opportuunity of furtheer research can n be done moore detail furth her on:  A deepeer research aboout the motivaation of lecturrers Prodi Adb bis use various versions of tthe theories of motivation.  A deepeer research on organizationaal effectivenesss criteria for Prodi Adbis.  Findingg the contextuaal empirical co onnection withh possibility framework: f Appreciiation Languaage  Interperrsonal Relatioonship  Mottivation  Sattisfaction  O Organizationaal Effectivenesss  Related with interperrsonal relation nships, open oopportunities to investigatee more deeplyy about team, leadership annd stewarddship in Prodi Adbis  Knowinng primary apppreciation lang guage for lectturers (both geeneral and perrsonally).  Closer sstudy of the relationship r words w of affirm rmation and or o quality timee and or act oof services to o organizationnal effectiveeness.  Findingg the type of soocial media most m suited to convey the words w of affirm mation qualityy time and act of services as appreciaation languagee.
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 Finding the type of social media that is most convenient and commonly used by Adbis lecturers.  The detail way to convey the words of affirmation quality time and act of services as appreciation language through the suitable social media. So from all five things above are expected to know the accuracy of the type of social media that is used to convey the appropriate appreciation language for Adbis’s lecturers.
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MOOCs as a Trusted Recruiting Tool for Corporate Learning J. Zulikha School of Computing, Universiti Utara Malaysia, 06010, Sintok, Kedah, Malaysia
Abstract Massive Open On-line Courses or MOOCs is characterised by its on-line feature which can be accessed freely and massively. It adopts an important principle called flipped classroom. Although new, MOOCs has become prominent now due to wide acceptance by well-known universities. Issues that lingers with regards to MOOCs are (1) the methods or strategies that best work for different platform such as corporate universities, (2) overcoming the skeptics on MOOCs, (3) providing acceptable quality of the courses and the user interface offered as MOOCs, and (4) the lacking of adoptable recruiting model. This paper aims to address those issues by proposing a recruiting model for corporate learning where MOOCs serves as a dominant tool. Strategies implemented by giant MOOCs providers such as Coursera, Udemy and edX is being reviewed with supportive data and evidence. These data, although secondary, are significant to show the growth of MOOCs adoption throughout the world, regardless of the skeptics. A sample case of the model being adopted in Malaysia’s institution of higher learning (IHL) is presented to prove that MOOCs really works, at least in the malaysiamoocs environment.
© 2014 Zulikha Jamaludin. Published by Telkom Pub. Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia. Keywords: Massive open online courses (MOOCs), flipped classroom, corporate learning, precision-build courseware.
1. Introduction – MOOCs? What is thing called MOOCs? MOOCs –massive open on-line courses-- is a concept gaining popularity in the corporate sector, companies as well as learning organisations. They are starting to employ it for the purpose of training, recruiting, and even marketing. It entered the learning sphere in 2008 and become prominent in 2012 due to the adoption of this teachinglearning (T&L) model by Stanford University. An important principle in MOOC is flipped classroom, where learning happens not by giving lectures, but by giving students/staff access to the course materials for them to discuss and debate with the course mates and well as the professor teaching the course. This would mean, the lecture hall is no longer the centre of T&L, it is now just a node in the social interaction network.
1.1. The seven characteristics of MOOCs MOOCs is characterised by (1) on-line courses, (2) can be accessed free of charge, (3) contains short video lectures combined with quizzes, (4) each course is complete from topic 1 to n, (5) it is a repository of all sorts of courses, sometimes with exams, peer and self-assessment, (6) online forum for peer support and other discussion, and (7) can be accessed ‘massively’. MOOCs is considered ‘massive’ due to its seventh characteristic, where a huge number of learners can enroll in a course. The number of students for a course, sometimes, can reach tens of thousands. * Corresponding author. Tel.: +60125044201; fax: +6049284753. E-mail address: [email protected]
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1.2. MOOCs – a billion dollars industry in corporate learning As an entity designed to support its parent organisation, a corporate university (CU) is indeed in a dire need for a tool that can foster organisational learning, specifically for training and supporting change in an organisation. As CU is characterised by a return on their investment (unlike traditional government universities), most CUs adopt MOOCs as the tool in its ‘blended’ T&L because MOOCs can provide evidence that each and every training is delivering results, specifically in applying the knowledge gained to the work environment. Mahidhar [1] and Bersin [2] reported that MOOCs is playing bigger role now in corporate learning (USD70 billion market) and recruiting (USD70 billion market) by being able to overcome the skill shortages in companies and to gain deeper insights about customers. Both corporate learning and recruiting are USD140 billion market worth of industry. Another important segment, i.e. marketing via MOOCs is another USD50 billion market. 2. Strategising MOOCs for corporate learning In the beginning, MOOCs are targeting at higher education institutions, but now more corporations are starting to use MOOCs. The corporate sectors find MOOCs useful for the purpose of lowering the cost for employee training, building talent pipelines, identifying candidates for certain jobs and skills, and winning the hearts of more customers. The giant MOOCs providers, specifically Coursera, Udemy, EdX (see Fig.1), and Udacity, have taken substantial actions in supporting the needs and demands by the corporate sectors. Among others, they established alliances with corporate members to create courses on technology skills desired by employers, they develop an offering to match students seeking jobs with employers [3], and they licensed their academic courses to corporations.
Fig. 1. An example of the edX MOOCs (www.edx.org).
With various strategies, MOOCs is seen to expand the corporate training options as seen in the alliance of Yahoo and Coursera, as well as Teneris and edX [4],[5]. Table 1 picks 3 different examples of strategies employed by Coursera, edX and Udemy with their respective alliances.
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Table 1. Strategies applied by the leading MOOCs providers
Adidas adopts a slightly different strategy by developing its own adidas Group Corporate University (aGCU) which serves as an incubator to enable its employees to achieve their personal best. Adidas is seen to act drastically by transforming the company into a learning organisation. They are working towards an environment in which all employees equally teach and learn, and acquire knowledge/skills in a variety of ways to best suit both personal and organisational needs. 3. Data and evidence on MOOCs as a trusted recruiting tool Table 2 summarises five recent studies on MOOCs. The studies show evidence that there is a significant growth in MOOCs registration in the recent years. Institutions with online offerings remain as positive as ever about MOOCs, but there has been a retreat among leaders at institutions that do not have any online offerings. Study conducted by Future Workplace [6] Cisco connected world technology report [6], [7]
Table 2. Recent studies on MOOCs Background Results completed by 195 corporate 70% - saw opportunities to integrate MOOCs into their own company’s learning and HR professionals learning programs. 91% is Gen Y (as opposed to 8% of Gen X ) needs changes and new Surveyed 1,388 Gen Y (born expectation in workplace. between 1977 - 1997) and 1,524 Gen X (born between Gen Y 1964 - 1976) professionals believe that Internet is as important as air, water, food, and shelter. and 827 Human Resource would accept a lower-paying job that had more flexibility with regard to professionals. device choice, social media access, and mobility than a higher-paying job with less flexibility. (The result of the study has led to the establishment of MOOCs as an integrated solutions between Cisco and Vyopta--a company that provides supports for Video Customer Engagement)
International council for open and distance education [8]
Study the growth in online enrolments, in the USA:
6.1% growth rate, i.e. more than 400,000 additional students taking at least one online course. 33% of higher education students take at least one course online 90% of academic leaders believe that it is very likely that a majority of all higher education students will be taking at least one online course in five years’ time.
Study on the proportion of academic leaders rating the learning outcomes in online education as the same or superior to learning outcomes in face-to-face education:
2003 – 57.2% 2012 –77.5% 2013 - 74.1%
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Study the demographics of 400,000+ MOOCs’ registered students. (in courses offered by the university through Coursera).
Students who registered for MOOCs are educated, employed, and male (56%). 68% registered are from Brazil, Russia, India, China, and South Africa (BRICS countries), 62% - other developing countries.
Received nearly 35,000 responses.
In BRICS countries, 36% gap between male and female participation (male is far greater for MOOCs than in traditional education). (The United States is one exception, where males and females participate in equal numbers in both)
3.1. Skeptics on MOOCs There is also an issue with regards to the doubts on the capability of MOOCs, that researchers found in their study. One of it is the study by Jaschnik [10] on Gallup surveys of college presidents. The study is also supported by Inside Higher Ed (www.insidehighered.com). Table 3 summarises the findings. Study conducted by Gallup survey of college presidents [10]
Background Surveyed 889 presidents
Table 3. The summary of Gallup survey Results Ambivalence – mixed feeling. Majority believe that MOOCS can ONLY Foster creative pedagogical strategies (43%) Increase collaboration among colleges (36%) Majority are skeptical that MOOCs can Improve the learning of all students (13%) Solving colleges' financial challenges (11%)
Only 13% of the presidents believe that MOOCs can improve the students’ learning. In line with Gallup survey [10], another study [8] also found increasing skepticism about the future role of MOOCs. Major concern is related to students’ learning and the credentials for MOOCs. I may be bias but as a researcher who believe in a theory that there are many ways to reach a destination, I believe that MOOCs are merely a tool. As a tool, it needs to be used by someone who knows the power and capability of the tool. The potential benefit can only be realized by organisations that know how to use the tool and adapt their process to it. One issue that is always considered as a drive for the education engine is money. The cost of attending colleges and universities is sometimes out of control. Thus MOOCs is one of the solutions. Students can attend great lectures from great universities like Harvard and MIT (or other top-ranked universities) for free. Thus, if students can get such a quality education (from a GOOD MOOCs, of course!) is it worth going into a debt (such as PTPTN in Malaysia) for a traditional brick and mortar universities, which are not even in the list of the world ranking? It is thus clear, if the choice is based on the economic factor, then MOOCs is a better choice. However, MOOCs is just a tool that can complement traditional education model. It is not a replacement like some people understands it. A study reveals that some faculty members thought MOOCs have the potential to put them out of job. The misunderstanding leads people to imagine that the universities/colleges will go bankrupt if everybody goes for MOOCs. Maybe it is one of the reasons why universities presidents are skeptical? Maybe they are not disinterested in the value of MOOCs? Let just leave this as another gap for further research. Worth mention although the results shows that they are skeptical, but it does not necessarily mean that they oppose MOOCs. As a tool, MOOCs should not be confused with educational process. Some (it may include the presidents of companies) are yet to figure out how to use this powerful tool effectively. They may also downplay MOOCs because in order to have access it is compulsory for one to have a laptop (or any other devices/gadgets) and an X dollars a month Internet connection. But in today’s reality, who does not have those?
3.2. The quality of MOOCs MOOCs must be made elite and reputable. I since it is free, everybody will choose the best free MOOCs. High ranking and reputable universities should feel obliged to provide MOOCs. However the quality of the courses must be improved, specifically in Science, Technology, Engineering, and Mathematics (STEM) areas. It has to be rich, interactive, and provide user controls. The user interface, look and feel as well as the usability should be tested and experimented prior to the release of the course as a MOOC. Good MOOCs will solve many educational problems.
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For MOOCs that is well-suited for corporate learning, other than the user interface for each and every course, they should also apply these defining features of MOOCs: 1) world-class course content in context; 2) flipped classroom course design; 3) provide college credits of certificate of completion as credentials; 4) build employer brand (similar to Khan Academy & Bank of America partnership which resulted BetterMoneyHabits.com); and 5) use data analytics to improve learning programs – because with MOOCs one can have a real-time analytics that reveal learners’ progress and achievement and which format works best for the learners. Table 4 shows some course credential keys (CCK) produced by a few MOOCs providers. The CCKs are not university credit, they are meant for providing the status of achievement with regards to courses taken online. Table 4. The MOOCs CCK (Source: http://www.openculture.com/free_certificate_courses) CCK Meaning CC Certificate of completion CA Certificate of accomplishment HCC Honor code certificate *VC Verified certificate *VCA Verified certificate of accomplishment SA Statement of accomplishment *SP Statement of participation CM Certificate of mastery NI No information about certificate available NC No certificate The * symbolizes the course is free but the credentials cost some money.
Meister [11] suggested that, to gain greater traction in corporate learning MOOCs should be adapted to 1) workplacetype offerings (71%); 2) courses that are shorter in duration (69%); 3) leadership development content focus (57%); and 4) apps that go along with online courses (49%).
3.3. MOOCs offers a new recruiting model The simplest MOOCs model is a video on a certain course, being posted in a blog in a forum, then we have one MOOC produced. But a slightly different model should be adopted for corporate training of a learning organisation. The new recruiting model under MOOCs initiative specifically for corporate training can be shown in the context diagram as in Fig. 2. In specific, the components are 1) corporate learning with two entities namely corporate education and corporate training; 2) the corporate university as an entity under the parent organisation; 3) the host or the MOOCs provider; and 4) the learning content.
Fig. 2. MOOCs in the context of a learning organisation.
The learning content is MOOCs, which are precision-built courseware and the approach can be in the form of blended learning. The figure simplifies how MOOCs is situated in the context of corporate learning within a learning organisation.
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MOOCs utilises the concept of e-learning, using the blended learning approach and most of the time adopting the flipped classroom principle. An example of the implementation of the model can be seen in Google and AT&T (as parent organisations) which are currently working with Udacity (the host). Another examples are Facebook and Twitter which are working with Coursera [3]. French Ministry of higher education and consortium of Chinese universities are working with edX [12], [13]. The ultimate aim of the organisation-host partnership is to develop the said courseware to teach students and graduates the skill demanded by clients and build a pipeline of qualified talent. There is now Facebook U offering paid courses. It will not be long when there will also be ‘Facebook University’ and ‘Twitter University’ as learning organisations, providing courses to potential students all over the word via MOOCs. The MOOC business model is yet to be witnessed on how it will evolve. But one thing for sure is that MOOCs will continue to fulfil the organisations’ and learners’ need and thus will stay as an important element in the landscape of the corporate learning and recruiting. 4. The impact of MOOCs Is MOOCs effective? Is it comparable to face-to-face learning? Thus far, based on studies there is no reason to believe that it is not effective, in fact in certain aspects MOOCs works better in improving the course learning outcome [14]. An exclusive example is from McAfee which utilised MOOCs for training their sales staff. Using the skill they learned through the MOOCs, McAfee manage to increase sales by 20% a year [15]. There are a lot more success stories of a corporate-sponsored MOOCs program associated with a brand-name educational institution can be tabled in this paper. The investments are in billions of dollars which would make us believe that one day MOOCs training program is listed, ranked and respected.
4.1. The many uses of MOOCs When shopping for MOOCs the employer should have knowledge on the type of courses offered, the workload, prerequisite, levels as well as accreditation. An informed choice is important because it will affect the employee time. On top training and educating, employers are also looking at MOOCs as a tool for research, specifically on training analytics – the way people learn, the course design, and the way people interact-- in order to predict future design and models for adoptable MOOCs. Recruiting too, has become easier with MOOCs. When a company is looking for a rare and uncommon skill, it will create a MOOC and use it as a way to find the candidate in the pool of those who complete the course. Such a method is not only cheaper, but also innovative. Other than that, obviously MOOCs is also useful as a marketing tool. 5. Malaysia takes the lead in offering MOOCs for public universities It has been highlighted earlier in this paper that leading MOOCs providers are Coursera, Udacity, edX. The first two are for-profit providers, whereas edX is a non-profit provider ventured by Harvard University and Massachusetts Institute of Technology with USD60 million investment. With regards to universities, Princeton University, Georgia Institute of Technology and Stanford University, among others, are actively promoting MOOCs. This section of the paper is to highlight an initiative by Malaysia, the first country worldwide to offer MOOCs for public universities. Four core university courses are offered via the MOOCs portal, https://www.openlearning.com/malaysiamoocs, can be accessed globally. The first session of 2014 commencing September 2014 have witnessed 16,000 students having enrolled in the MOOCs for those core courses namely the Islamic Civilization and Asian Civilizations, Ethnic Relations, Entrepreneurship and ICT Competency. The Ministry aims to increase the percentage of learning in the IPTAs via the MOOCs to 15% in 2015 and to 30% by 2020. Fig. 3 offers a snippet of the portal.
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Fig. 3. The homepage of the Malaysia’s public universities’ MOOCs.
Malaysia started with open educational resources (OER) at their universities. In late 2011, 10 universities began to offer topics of courses in their OER repositories. It has developed since then and for now they have had enough contents to be offered as courses via MOOCs. Malaysia’s MOOCs is adopting a different model since it is a top-down approach. The government (via the national e-learning council) decided on the course and the amount of the courses to be put up as MOOCs. All public universities are given responsibilities to come out with a number of courses to be MOOCed. 6. Conclusion and the challenges ahead In essence, MOOCs is a tool and it is a new tool in that the numbers of learners that can have access to the learning material is unlimited, the contents can be accessed 24-7, and the students have control on their pace of learning. Being a billion dollar industry in corporate learning and recruiting, as evidenced from the given data in this paper, MOOCs has win the heart of many learning organisations. The organisations have taken substantial actions in supporting their needs and demands using at least four strategies namely reimbursing the employees, providing custom-developed courses, establishing corporate universities, and getting the licenced for certain academic courses from the MOOCs providers. The many uses of MOOCs as oppose to the skeptics on MOOCs, and the absent of its established model making MOOCs remains relevant as well as interesting. Being skeptics or not, it cannot be denied that the nature of learning organisations (also the higher education as in the case of Malaysian Higher Education highlighted in this paper) have changed and will continue to change as a result of adopting MOOCs. The huge challenge is to maintain relevant. Does MOOCs really matters? Will it continue to be relevant? The answer relies on the quality of the content provided in MOOCs. But what about the cost in preparing the precision-built courseware for the MOOCs portals? As competition with MOOCs increases, learners will begin to compare and they will definitely choose the best because there is no cost incurred of choosing the best. Then another dilemma occurred – should the learning organisations compete while having similar courses to offer? Then, how to structure the learning? By brand? By business lines? By crowd? Another questions that need further planning, should the employees be given incentive upon completion of a course?
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What about the criticisms on MOOCs as to never being able to equate for face–to–face discussion? And that the learners who complete the course are never recognised as being as skilful as those completed the same course via traditional learning institutions? With regards to instructors, just how much of an online presence should they maintain? Will the instructor be the talking head and lose his/her function as an intervener, motivator and friend? What sort of support that need to be provided when the role of the instructor shifted towards more on preparatory work with less direct participation? Via MOOCs, how can we embed soft skills (analytical, communication, leadership,…) in students? Bottom line, successful outcome will not just happen by accident. Thus careful planning and well-defined framework for the whole process of knowledge construction must be crafted.
References [1] Mahidhar, V. (2014). MOOCs teach corporations about new opportunities. CFO Journal (of The Wall Street Journal). Delliot Press. Also available from http://mobile.deloitte.wsj.com/cfo/2014/03/07/moocs-teach-corporations-about-new-opportunities-weekend-reading/ [2] Bersin, J. (2013). Corporate recruiting explodes: A new breed of service providers. Forbes. May 23. [3] Jones-Bey, L. (2012). Coursera and your career, Coursera blog, December 4, 2012. [4] Press release, BloomNet® selects Udemy to launch a world-class online education platform, Wall Street Journal, October 30, 2013, http://online.wsj.com/article/PR-CO-20131030-912463.html?dsk=y#!. [5] Cavallario P. (2013). Global steel manufacturer Tenaris adopts edX platform for employee training, edX, Tuesday, November 12, 2013, https://www.edx.org/blog/global-steel-manufacturer-tenaris-adopts, accessed December 16, 2013. [6] Meister, J. (2013). Cognizant Academy: Lessons from a 2020 learning organization. Available from http://www.forbes.com/sites/jeannemeister/2014/09/10/cognizant-academy-lessons-from-a-2020-learning-organization/, accessed 10 August, 2014. [7] Williams, J. (2014). Vyopta Launches WebRTC Support for Video Customer Engagement Solutions. PRWeb. Vyopta Incorporated. 16 June, 2014. [8] ICDE, (2014). 2013 US survey of online learning. The Sloan consortium and Babson Survey Research Group. International council for open and distance education. 16 Janueary, 2014. [9] Christensen, G. & Alcorn, B. (2014). The revolution is not being MOOC-ized. NewScientist. Global initiatives at the University of Pennsylvania. 16 March, 2014. [10] Jaschnik, S. (2013). MOOC skeptics at the top. Inside Higher Ed. Available from https://www.insidehighered.com/news/2013/05/02/survey-findspresidents-are-skeptical-moocs. Accessed 15 September, 2013. [11] Meister, J. & Willyerd, K. (2010). The 2020 Workplace: How Innovative Companies Attract, Develop, and Keep Tomorrow's Employees Today. New York: Harper-Collins Publisher. [12] edX. (2013a). edX to work with French Ministry of Higher education to create online learning portal. Available https://www.edx.org/alert/edx-workfrench-ministry-higher/1179, accessed 15August, 2014. [13] edX. (2013b). edX open source platform chosen to power China’s new online education portal. Available https://www.edx.org/alert/edx-work-frenchministry-higher/1179, accessed 15August, 2014. [14] Glance, G. D., Forsey, M. & Riley, M. (2013). The pedagogical foundations of massive open online courses, First Monday, Volume 18, Number 5 - 6 May 2013. doi:10.5210/fm.v18i5.4350 [15] Ardent Learning Inc. (2013). MOOCs can augment custom training programs. Available http://www.ardentlearning.com/blog/index.php/moocs-canaugment-custom-training-programs/#sthash.YzfT1OU0.dpbs. Accessed 15 August, 2013.
[1] Sikes, C.V., Lai, L.P., Schreiber, M., Mont, M.A., Jinnah, R.H., Seyler, T.M., 2008. Instability After Total Hip Arthroplasty Treatment with Large Femoral Heads vs Constrained Liners, the Journal of Arthroplasty, Vol. 23, No.7, pp. 59-63. [2] Cuckler, J.M., 2011. The Dislocated Total Hip: The Dreaded 3 AM Phone Call, Seminars in Arthroplasty 22, pp. 98-99. [3] Hummel, M.T., Malkani, A.L., Yakkanti, M.R., Baker, D.L., 2009. Decreased Dislocation After Revision Total Hip Arthroplasty Using Larger Femoral Head Size and Posterior Capsular Repair, the Journal of Arthroplasty, Vol. 24, No. 6, pp. 73-76. [4] Sugano, N., Tsuda, K., Miki, H., Takao, M., Suzuki, N., Nakamuro, N., 2012. Dynamic Measurements of Hip Movement in Deep Bending Activities After Total Hip Arthroplasty Using a 4-Dimensional Motion Analysis System, the Journal of Arthroplasty, Vol. 27, No. 8, pp. 1562-1568. [5] Kluess, D., Martin, H., Mittelmeier, W., Schmitz, K.P., Bader, R., 2007. Influence of Femoral Head Size on Impingement, Dislocation and Stress Distribution in Total Hip Replacement, Medical Engineering & Physics 29, pp. 465-471. [6] Eichmiller, F.C., Tesk, J.A., Croarkin, C.M., 2001, Mechanical Properties of Ultra High Molecular Weight Polyethylene NIST Reference Material RM 8456, In: ‘Transactions of the Society for Biomaterials, 27th Annual Meeting’, p. 472. [7] Fregly, B.J., Bei, Y., Sylvester, M.E., 2003. Experimental Evaluation of An Elastic Foundation Model to Predict Contact Pressures in Knee Replacements, Journal of Biomechanics 36, pp. 1659-1668. [8] Bergmann, G., Graichen, F., Rohlmann, A., 1993. Hip Joint Loading During Walking and Running, Measured in Two Patients, Journal of Biomechanics 26, pp. 969- 990.
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Telkom University’s Readiness for Global Competitiveness through Its Use of Global Virtual Team (GVT) Among Communication Lecturers in Increasing Their Organizational Performance: A Review D.A. Esfandari, A.B. Mahadian Faculty of Communication and Business, Telkom University, Jl. Telekomunikasi, Terusan Buah Batu, Bandun 40257, West Java, Indonesia
Abstract
Nowadays, it is no longer essential for people to have a meeting face-to-face, or be at the same location. The global network and revolution that we are experiencing make ‘long-distance’ meetings possible and easy to access. It no longer matters if some big companies’ product designers are in some part of the world, while their product development engineers are in, for example, India or China. As such, it is now exceedingly common for big companies in creating Global Virtual Team (GVT) inside their organization since it spans across boundaries of time, geography, nationality, and culture. Unlike the traditional team, GVT normally works on project basis. It is also (generally) self-managed teams which distribute expertise of complementary value that bring different core-competencies together. Unfortunately, aside from GVT’s many advantages there are also disadvantages (i.e. misunderstanding) that come from little opportunities of direct exchanges which are crucial for strong relationships, cohesiveness, and trust. As a newly born university, Telkom University aims to become a world class university by 2017 where it will compete with other universities from around the world. Thus, Tel-U needs to assess its own readiness immediately prior its announcement in 2017 in the area of Global Virtual Communication so that its organization performance can be measured and if needs be improved. Based on the result of the interview, it is shown that GVT is still an unknown and relatively new concept to Tel-U’s communication lecturers. © 2014 D.A. Esfandari, A.B. Mahadian. Published by Telkom Pub. Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia. Keywords: Global Competitiveness, Global Network, Global Virtual Team, Organizational Performance
1. Introduction Telkom University is a brand new university that was established based on the unification of four education institutions, under Telkom Foundation. Those four institutions were: Telkom Institute of Technology, Telkom Institute of Management, Telkom Indonesian School of Arts and Design, and Telkom Polytechnic. Launched on August 31st, 2013 the University has since developed and expanded. It has now seven schools which are: school of electrical engineer, school of industrial engineering, school of economics and business, school of computing, school communication and business, school of applied science and school of creative industry. With various targets and plans that each school wants to achieve, they nevertheless have the same vision which is to build a stronger and wider collaboration with other institutions (worldwide) as well as achieve academic accomplishments (through its students and/or academicians’ involvement). By the year 2017, Telkom University aims to become a World Class University by means of: cooperation with foreign universities, recruitment of international students, publication and/or research supports, and human resource improvements. Aside from aiming to become a World Class University, Telkom University also wants to expand its influence throughout the nation by creating ‘National Campus’ in several regions such as Makassar, Balikpapan, Medan, Purwokerto, Jakarta, Batam, and Manado. According to Johni Girsang, Head of Telkom Foundation, “The reason for the expansion is to give the opportunity for other Indonesians to gain access and knowledge under the tutelage of Telkom University [1]” Thus, it can
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be concluded that in less than five years, Telkom University needs to establish a strong groundwork before expanding its influence nationally and world-widely. In other words, it is only logical for Telkom University to prepare all of its resources toward the goal mentioned above. One of the resources that needs immediate attention is the human resources (i.e. lecturers). The reason it is important is because they are the medium through which the knowledge can be spread out nationally and internationally. Without them, it would be impossible for the university to succeed in its endeavours. Consequently, it is essential to know (from the earliest) whether Telkom University lecturers are ready to support the university or not and whether they are ready to use any means, or technological tools, that would enable them to communicate and/or collaborate with colleagues and students from great distance. As the world changes, so does the way we communicate and use technology. Nowadays, it is no longer essential for people to have a meeting face-to-face, or be at the same location. The global network and revolution that we are experiencing make ‘long-distance’ meetings possible and easy to access. Big companies such as Microsoft, GE and Daimler-Chrysler, just to name a few, are able to access to markets, localizations of products, access to scientific talent and human resources, and exploitation of diverse capabilities of people from across around the globe [2]. It no longer matters if some of its product designers in some part of the world, while its product development engineers are in for example, India or China. Thus, organizational and geographical boundaries that usually prevent employees from working on complex projects can be avoided due to today’s digital electronic communication availability. From a simple e-mailing to a more sophisticated audio and video-conferencing, they help people to overcome the barrier of distance and time, significantly. Unlike the traditional teams, Global Virtual Teams (GVT) normally works on project basis [3]. As such, GVT will likely play a vital role in uniting different areas of research or collaboration between lecturers and campuses. They will also influence the success of various projects since GVT are also generally self-managed teams which distribute expertise of complementary value that bring different core-competencies together. In accordance with their cross-boundaries accessibilities, GVT bring cultural diversities which more specifically consist of regional, national and organizational cultures [4]. In other words, GVT span across boundaries of time, geography, nationality, and culture. They address a very specific organizational goal with very little face-to-face interactions but more on computer mediated and electronic communication. Therefore, the fast-growing and ever-developing technology needs to be acknowledged and understood by academicians, specifically, Telkom University’s communication lecturers as they are “experts” on human interactions and technology development. They are the ones whom people can rely upon when a phenomenon or problem occurs due to the technology development that affects the way the society communicates. One of those problems is the existence of little opportunity for formal and informal exchanges that are crucial for strong relationships, cohesiveness, and even trust. In 1997, Lipnack and Stamps [5] has revealed that the success of a virtual team is through its clarity of purpose. It means that the success of the team depends on how clear the goal they have to achieve is. It is the best indicator in knowing whether that particular virtual team has succeeded or not. In other words, “The clarity purpose and participatory process by which the group achieves it is the ‘best predictor’ of a virtual team’s success.” Hence, the purpose of this paper is to find out (the level of) readiness of Telkom University’s communication lecturers in anticipating ‘World Class University’ in 2017 through their understanding of Global Virtual Teams’ existence. Unfortunately, the uses of in-depth interview to 19 Tel-U Communication lecturers indicate that none of the Tel-U Communication lecturers is aware of GVT’s existence. Though they are able to decipher the acronym of GVT, they are nonetheless not sure of its significance or its implication. Thus, it can be assumed that up until now Tel-U Communication lecturers are still not ready for global competitiveness if the level of readiness is through the understanding and use of GVT. Additionally, it also indicates that their organizational performance needs to be improved prior to Tel-U announcement for becoming a ‘World Class University’.
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2. Global Virtual Team
2.1. An overview According to Prasard and Akhilesh [7] Global Virtual Team Performance model is as the following:
Strategic Objectives 1. Leverage competencies and skills 2. Innovations 3. Flexibility 4. Cost Savings The ofAspirations global virtual 5. structure Employee Work Characteristic 1. Workflow and task uncertainty 2. Task complexity and difficulty
team indicates that ‘virtual’- ness is the essential part Global Virtual Team Structure 1. Degree of Virtual-ness 2. Team Processes 3. Alternate/Socializing mechanisms 4. Attitudinal Aspects
Global Virtual Team Performance 1. Traditional Measures 2. Knowledge Creation 3. Employee Satisfaction
Situational Constraints 1. Tolerance of Variance 2. Tolerance of errors 3. Tolerance of schedule variance 4. Tolerance of increased effort
Figure 1. Global Virtual Team Performance Model The structure of global virtual team indicates that ‘virtual’- ness is the essential part of the team that differs from its counterpart which is the traditional team. Instead of emphasizing on face-to-face meetings, employees rely on information technology (i.e. email or teleconference meeting) as their communication’s medium which helps them to contact one another without time and/or location’s constraints. As such, the team’s decision-making-process whether it is centralized or de-centralized will depend solely on the agreement between the employees beforehand. Whether the information sharing or socializing mechanism is formal or informal, and whether they decide the time and location during communication, varied completely from the traditional norms. In a traditional team, the decision-making process is usually immediate and centralized. Employers meet, discuss and decide with their employees in an appointed time and place where the process can either be long or short. In the information sharing or socializing mechanism areas, the traditional team usually can do them anytime and anywhere they want during office hour. From taking lunch-together to standing near a water cooler, employees can share certain information as well as socialize to strengthen their bond and trust between one another. The formalities and informalities that a traditional team use during socializing time can immediately be recognized and understood as employees experience at the same time and location zones. It is unfortunate that such experiences and atmosphere are more difficult to achieve by the Global Virtual Team. In addition, based on the model above, the formation of a Global Virtual Team begins after three important components come together. They are: strategic objectives, work characteristics and situational constraints which create the team’s distinctiveness and effectiveness. In its strategic objectives, Global Virtual Team focuses on using the employees’ competencies and skills to maximize productivity and solve complex problems with the lowest possible costs. Hence, it requires a wide-space for innovation and flexibility so that employees can achieve their goals or aspirations. The second component is situational constraints that companies and employees should be aware of because unlike a traditional team, it has constraints that are greatly influenced by the digital technology dependency. One of the constraints is the variation of quality since the teams (or companies’ sub-divisions) are spread all around the world and are inclined to have different perspectives of the word ‘quality’. Even though a standardized quality work or product is created, different time and location zones as well as culture can distort it. Consequently, a tolerance of schedule variance, errors and increased effort needs to be anticipated.
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The last component that affects the shape of Global Virtual Team is employee’s work characteristics where workflow and task uncertainty, as well as task complexity and difficulty, contribute significantly. Since it has its own tasks and process of transformation, the degree to accomplish the job becomes uncertain when a lack of knowledge exists in getting the work done. Moreover, the lack of appropriate inputs of technology and time adds to the task’s complexity and difficulty. All of the three components become the ‘personality’ of the Global Virtual Team. Their inter-reliance’s link forms the Global Virtual Team’s performance and outcome. Similar to the traditional team, its performance and/or outcome will be measured by the team’s cost-control, on-time delivery, and product-service quality. It will also be expected to execute knowledge creation and employee’s satisfaction, at the end. According to Robey et al., [8] the rapid growth of the internet and related communication technologies has afforded organizations limitless opportunities to adopt virtual teams that transcend time, space, national culture and organizations.
2.2. Advantages and disadvantages Below is the summary of advantages and disadvantages that the authors have gathered from various resources: Table 1. Advantages and disadvantages of GVT No.
Global Virtual Team Advantage(s)
Global Virtual Team Disadvantage(s)
1.
Lower normative pressure because the virtual communication environment reduces the exchange of social cues. These cues implicitly pressurize the minority to conform to the shared view of the majority [9].
Inequality of work/product contributions
2.
Large pool of knowledge
Hinders trans-active memory [10].
3.
Anonymity : less risk of embarrassment when expressing ideas
Their ability to handle non-verbal information is very limited [11].
4.
Ideas are valued on the merit instead of who has presented it.
Diversity in culture
5.
More heterogeneous
The deficits experienced by virtual teams in the interaction and examination stages of information processing
6.
Equal participation of every member of the team
Stereotyping [12].
7.
Effective in brainstorming [13].
Take longer in decision-making because of less information exchanged [13].
8.
No biases
Satisfaction team member is low
9.
Virtual teams offer the promise of flexibility, responsiveness, lower costs and the improved resource utilization necessary to meet the everchanging task requirements of companies operating in highly turbulent and dynamic global business environments [14].
Development of trust and team identity more difficult [6]
10.
High levels of trust. Clear communication, Strong leadership. Appropriate levels of technology [12].
Multiple time zones, Language, Different approaches to conflict resolution [12].
Several scholars (Mowshowitz [14], Prasad and Akhilesh [15], and Bergiel and Balsmeier [16]) have mentioned that virtual team considerably cut time and travel expenses. They have all agreed that the significant expenses associated with accommodation, travel and various daily allowances may be reduced and even eliminated as virtual team communicate via technology. In addition to that, virtual team eliminates biases or stereotypes because its members are more heterogeneous and chosen based on their expertise. One interesting aspect that Bergiel and Balsmeier [16] mentioned on their paper is that, “physical disadvantaged-employees gain easier access to the virtual workplace than to a physical office.” This indicates that
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every employee has the same opportunity and access that enable them to work professionally and proficiently without any constrain of physical disadvantages.
3.
Summary
Based on personal correspondence up until now, there are 32 communication lecturers at Telkom University. They are from various cities and are between the ages of 24-39 years old. Most of them are new recruits and have different interests ranging from marketing communication, broadcasting, journalistic, politics, technology development and cultural studies. Each one of them understands the university’s mission and goals, to a great extent. The reason is because prior to their being formally recruited, they had to undergo a one-week (semi-military) training where trainees were made aware of TelU’s vision, mission and goals practically every day. As a result, after the one-week training, trainees or new employees are not only familiar with Tel-U’s culture but also triggered to achieve its objectives. Thus, in order to assess Tel-U’s readiness prior becoming a ‘world-class university’ by the year 2017, it is essential to know its lecturers’ abilities in facing global competitiveness. By using in-depth interview, 32 communication lecturers were asked whether they have heard of Global Virtual Team (GVT) and are aware of its value. Accordingly, the answers will lead to understanding the level of organization performance of each one of them. Unfortunately, the result shows that only one of Tel-U’s communication lecturers has heard about GVT and only one person gets it right. This indicates that the significance of GVT is still unknown and relatively new to Tel-U’s communication lecturers. Even though five of them could decipher the GVT abbreviation, none of them is sure of its implication or existence. Therefore, it can be concluded that Tel-U’s communication lecturers are still in need of improving and developing their knowledge as well as organizational skills. Although there is always the assumption (that in actuality) Tel-U’s communication lecturers have practiced GVT ‘unconsciously’ through their collaborative research with colleagues from other universities or other regions, for example. Though the theory of GVT’s existence has existed since 1997, but it is still a new entity for Tel-U’s communication lecturers. It is unfortunate since Tel-U aims to spread its curriculum nationally and internationally, in the near future. Although most of the lecturers have heard of GVT, the author is convinced that they have actually done GVT’s activities without ‘labelling’ or ‘knowing’ it as GVT. A further study or research need to be done, in order to prepare and facilitate the campus’s objective prior to its ‘world class university’ announcement.
References [1] Grand Meeting held in the Hall of the Faculty of Applied Science, Thursday-Friday (3-4 April 2014). [2] Prasad, K. and K.B. Akhilesh., 2002. Global Virtual Teams: What Impacts Their Design and Performance? Team Performance Management, Vol. 8 ISS: 5, p. 102-112. [3] Bultje, R. and Wilk, J. Von., 1998. Taxonomy of Virtual Organizations: Based on Definitions, Characteristics and Typology, VoNet: The Newsletter, Vol. 2 No.3, Available at: virtual-organization.net. [4] However, Lipnack and Stamps, 1997, has also emphasized on the importance of leadership and team member roles, communication, and trust. [5] Lipnack, J. and Stamps, J., 1997. Virtual Teams: Reaching Across Space, Time, and Organizations with Technology, John Wiley & Sons, New York. [6] Jarvenpaa, S. and Shaw, T.R., 1998. Global Virtual Teams: Integrating Models of Trust, Organizational Virtualness, Preceedings of virtualorganization.networkshop, 27-28 April, p. 65-76. [7] Prasad, K. and K.B. Akhilesh., 2002. Global Virtual Teams: What Impacts Their Design and Performance?, Team Performance Management, Vol. 8 ISS: 5, p. 102-112. [8] Robey, D., Khoo, H., and Powers, C., 2000. Situated Learning in Cross-Functional Virtual Teams, Technical Communication, Vol. 47 No. 1, p. 51-66. [9] Hollingshead, A.B. (1996). Information Suppression and Status Persistence in Group Decision Making”, Human Communication Research. Vol. 23, p. 193-219. [10] Alavi, M. and Tiwana, A. (2002). “Knowledge Integration in Virtual Team: The Potential Role of KMS”, Journal of the American Society for Information Science and Technology Vol. 53, p. 1029-37. [11] Curseu, P.L, Schalk, P., and Wessel. I.(2008). “How Do Virtual Team Process Information? A Literature Review and Implications for Management”, Journal of Managerial Psychology, Vol. 23 Iss:6, P.626-652 [12] Van Knippenberg, D., De Dreu, D., and Joman, A.C.(2004). “Work Group Diversity and Group Performance : An Intergrative Model and Research Agenda. “Journal of Applied Psychology, Vol. 89, p.1008-22 [13] Hollingshead, A.B., and J.E. McGrath. (1995). “The Computer-Assisted Group; A Critical Review of the Empirical Research””, in Guzzo, R.A. and Salas. E. (Eds) Team Effectiveness and Decision Making in Organzations, Jossey-Bass, San Franscisco, CA. P.146-78. [14] Mowshowitz, A., 1997. Virtual Organization, Communications of the ACM, Vol. 40 No. 9, p. 30-37. [15] Prasad, K. and K.B. Akhilesh., 2002. Global Virtual Teams: What Impacts Their Design and Performance?, Team Performance Management, Vol. 8 ISS: 5, p. 102-112. [16] Bergiel, B.J., Bergiel, B., and Balsmeier, P., 2008. Nature of Virtual Teams: A Summary of Their Advantages and Disadvantages, Management Research News, Vol. 31 ISS: 2 p.99-110.
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The Cyber Politic: Transformation of Marketing Politic in Cyber Age Dedi Kurnia Syah Putra*, Lucy Pujasari Supratman* Communication Department, Faculty of Communication and Business, Telkom University Jl. Telekomunikasi no.1 Terusan Buah Batu Bandung 40257, Indonesia
Abstract: As the oldest study after philosophy, communication studies are currently listed as the forefront of the development of the global media environment. The emergence of new media presents a conventional media convergence phenomenon, starting with the appearance of the internet and mobile communications access with highly speed of the system. By having the speed of access, new media is able to build a new community that is encapsulated in virtual communities. This development is considered as a radical challenge (extreme) by conventional theory, because it is dominated by new media communications approach to international communication (interaction of global/transnational). It includes political discourses. With the purpose of understanding the dynamics of contemporary media seriously, it requires the researchers to leave the meta-theoretical frame work of modernization, dependency theory, and globalization; and to focus sharply on a study that yields insight into the context of the communication process, with a focus on the analysis of cyber theory, including the social and political implications. Media, through communication studies across all reality always meshes among social, economic and political. By having the initial assumption, media become something interesting to be researched. Moreover, a brief study bringing new awareness to a new theory called Cyberpolitics has been developed. With a qualitative approach the researchers will face the reality in a critical way. This research is also focused on providing an explanation about the transformation of political marketing in the era of Cyber Media.
© 2014 Dedi Kurnia Syah Putra, Lucy Pujasari Supratman. Published by Telkom University. Selection and peer-review under responsibility of The ISCLO, Faculty of Economic & Business, Telkom University, 20342 Bandung, Indonesia. Keywords: CyberPolitics, Global Communication, Cybermedia Space
1.
Introduction
According to the previous researches, the content of communication science has not been able to follow the changes and developments of global media environment. The emergence of new media presents a conventional convergence phenomenon. The historical record begins with the advent of the internet and mobile communication access with the speed of the system. These conditions affect the existence of a new theory, namely Cyber Media. This situation brings the new media with new communities. It is encapsulated with a name called virtual communities.1 The development of these situations becomes a radical challenge for conventional theorists because it is dominated by new media communications that is acknowledged as global communication. By having this reason, this study participates to build what we call cyber politics. It is a new study about political actions taking the main theme related to Political Marketing. Basically, in the era of conventional political marketing was done manually, and the design of political campaigns was also still in the form of conventional texts. Nowadays, we understand that many parties subsequently use the cyber area to build political awareness of the community. In this brief study, the researchers will explain some of the theoretical implications of the emergence of digital culture as part of the study in political communication. By having this reason, the researchers applied the media study to official political parties in Indonesia, namely Great Indonesian Movement Party (Gerindra) and National Demokrat Party that actively participate in the social networking media.
*Corresponding Author : Email address : [email protected] and [email protected]
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Referring to this reason, the purpose of this study has led to the discussion about the concept of comparative issue based on the principal relevance between global communication studies and political communication. It is also related to communication technology. The framework explains about the understanding of Cyber Media and political marketing in the cyber era. The discussion started with moving forward to see the role of space in the Cyber Media political upheaval in Indonesia in 2014, and is finally closed by conclusions about the broader implications of the case Before analyzing this research, the researchers will explain about what Cyber media is in theoretical review. THEORITICAL REVIEW The Understanding of Cyber media The term of cyber media is inspired by hypermedia. Basically, it has been used for a long time before the internet appearance. It was used to mention the conventional media such as television and radio. Along with the change in communication technology and the emergence of new media, the term of cyber media refers to the internet utilization. Ronald Delbert (1997), a scientist in the field of International Relations gives his opinion on Cyber Media or hypermedia:
… Not only captures the convergence of discrete technologies, it also suggests the massive penetration and ubiquity of electronic media characteristic of the new communications environment … the prefix “hyper” (meaning “over” or “above”) emphasizes two central characteristics of that environment: the speed by which communications currently take place, and the intertextuality or interoperability of once-discrete media” (pp. 114115). Although the ideas about Cyber Media stated by Deibert were formulated before the advent of YouTube, Facebook and Twitter, it can be seen clearly that the new development reinforces the ease of movement and flexibility of digital information with convergence concepts. Mobile phones, tweets, email, social networking, text messaging, digital cameras, video online, electronic newspapers, and satellite television, thereby have formed a communicative environment (read: cyber media space).1 This explanation is considered as criticism to the previous theorists in the formulation of the mass media before the digital world appearance and the mass media is still grouped in one area, namely television, radio, newspapers and movies. But now, when digital communication technology dominates the situation, the past era was s no longer relevant to be used in the convergence era. This presentation will focus on the main theme as mentioned above. It explains the related implications towards Social and Political Communication. The emergence of cyber space is a qualitative leap in terms of how each person searches, accesses, produces, and reacts to information. It is important to know that cyber space is expanding through communication technology. Today, people are easier to 'produce” messages in the era of mobile devices and blog. The conclusions of this paragraph assume that the new media space give contributions. Consequently, there are many people who are theoretically able to convey messages, and then we can expect the number of discourse arise in culture through the flow of communication in several directions and roles of producer and receiver of information that has been encrypted. Communication and Political Marketing Political communication has become a part of science discipline for a long time and is listed in the social sciences curriculum. It is admitted to both in the study of communication sciences and in the study of political science. Not only were students to be enthusiasts but also were the political figures involved in the political communication as members of the House of Representative, political observers, and other political activists. In Indonesia, many moments of political activity occur and involve a lot of community such as: the direct election of parliament members (General election), President (Presidential Election), and regional heads (Regional Elections). The
1 The description explicitly states that television is separated into two distinct areas of communication between conventional television using transmitter manual and the era of digital television using satellite. A satellite television in the order of the one agreed upon by the framers of the global communications as part of CyberMedia , though it is same in context but different network acceptance and global. View: Greedy Alexa, Utopia Virtual Community in Singapore. (Singapore: FEST Publishing, 2010), p. 119
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political activities create various forms of political communication. Therefore, the study of political communication will continue to evolve with the passage of maturation process in Indonesian politics.
'Political Communication as a political activity is the delivery of messages politics characterized by political actors to others' (Maswadi Rauf, 1993: 32) If we discuss the term of 'communication', it will lead to a variety of meanings. It could be a set of hypotheses about the process or intuition exchange of ideas, messages and also information from the sender (sender/source) to the receiver (receiver/respondent) in order to elicit a response. Many books are written by the experts of communication and none of them dare to give a single illustration of the definition of communication, because communication was born on the basis need to explain what was happening in reality. Etymologically, the word ”communication or communications” is derived from a Latin word 'communis' meaning 'equal', or 'communicare' which means 'making the same' (to make-common). In a simple way the definition of communication refers to the transfer of information from the source to the recipient to receive a response or share information, ideas, and attitudes. At first, communication was the study of the problem in conveying messages. Along with time, the progress of science has very significant impacts for the development of communication. Communication Studies (Communicology) is the interdisciplinary science having a background study of the various fields of science, especially in social sciences. Harold Lasswell; the father of Political Science, conducted some research by taking samples of propaganda in World War II (WW II). The results of these studies have become a major contribution to the development of communication science today. In addition, Kurt Lewin is known in the field of Social Psychology, Paul Felix Lazarfeld is a Doctorate in Applied Mathematics from the University of Vienna, and the last of the four fathers of communication was Carl Hovland whose background was Psychology from Yale.2 Meanwhile, the word “politic” originated from the word “politicus”. It comes from Greece “politicos” meaning relating to citizen or something that has relationship with audience interest. Both of them originally come from the word “polis” that has meaning as city state.3 Politics has been considered as a pioneer of political science since more than 2500 years ago. It affects political concern and almost influences the scholars from all era. Politics is also consider as the Master of Science.4 There is no scientific and human civilization regardless of the political review. For examples, there were St. Augustine, Maimonides, St. Thomas Aquinas and Calvin. There were also philosophers such as Plato, Aristotle, Kant, Hegel and Maritain. The poets included Dante and Coleridge. The famous novelists were like Dostoevsky, Hawthorne, and Orwell. Other scientists were like Priestley and Huxley. There were also Einstein, the mathematician, and statesman par Einstein Cicero, Burke, Calhoun, and Wilson.5 They all were a bit of thinkers who were affected by the enjoyment of political studies. In political marketing, there are at least three basic things that will be discussed. The first is the political motive itself. It consists of the conversation of related questions why somebody should go into politics and the way of reflecting the political life. The second is the media, or it also is considered as the image industry. This discussion for now will focus on the issues of cyberpolitics. The third is with regard to the constituents who will receive political messages. Referring to the formula of Lasswell, politics is often defined as a 'who gets what and when'. Thus, Lasswell provides an overview that is an effort to achieve political power. The instrument to used as the access to' the power' in Indonesia and also in democracies is through the general election. Nowdays, the reality of the political has been demanding individual politicians or parties to have access to the widest possible as mechanism of image industry. It is called the communication and information industrial based which will market an idea, ideas, thoughts and political actions. Politics in the perspective image of the industry is an attempt to influence others to change or defence a certain power through the packaging image and popularity. The more a politican can show a good image, the more of opportunity to have greater power he can get.
2
Antony, Riuhnya Persimpangan Itu: Seri Komunikasi. (Solo: Tiga Serangkai, 2004), h. 99, 81, 103 dan 47. Ramlan Surbakti, Memahami Ilmu Politik. (Understanding Political Science. Jakarta: Grasindo, 2010) 4 H. Victor Wiseman, Politics: Master of Science. (London: Routledge and Kegan Paul, 1969). 5 Henry J. Schmandt, A History of Political Philosophy, (United of America:the Bruce Publishing Company, 1960), h. 3. 3
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Almost no component of political system can create a symbiosis mutalism relationship between politicians and political image industry. There are components such as political socialization, political recruitment, interest articulation, interest aggregation, the rule-making process, and the establishment of enforcement and the implementation through access to the industry's image. Among the most prominent images of the industry today is the mass media industry. The main strength of the media cannot be denied in today's information age. The power of constructing reality means the strength in packaging the issues. So, it stands out to the surface and eventually becomes a public discourse which is interesting today. There are many people, or social and political institutions showing their interest in the media. They seek to have access to enter and influence the media, with the assumption that controlling over the media will be the entrance in packaging and controlling public opinion. Furthermore, by controlling the public opinion it is expected to be easier to direct preferences as expected by candidates. An opinion in communication perpective is seen as an active response that is constructed through personal interpretation that develops from the image. Because the opinion itself is considered as a response which is constructed, it will be a strategic situation from the politicians that are in fighting periods to give attention to the packaging of opinion for political purposes. Firstly, Credibility or it is about something to believe or not to believe.. By having a good marketing strategy, the audience will be directed to believe the concept that has been arranged by the candidates. More people will trust the candidate, the more positive public. Secondly, in the opinion it self contains the welfare value dan deference value such as the searching of welfare, prosperity, skill and enlightement. Meanwhile the deference value are the respective building, moral rectitude reputation, attention dan the power of popularity. By understanding the component of the value, it will be better for the candidates to understand that public opinion can not freely flow but it must be constucted by elegant ways. Thirdly, the opinion is built from components of expectation. It is related to a conative component. It comes form the aspect of personal image and interpetation . Psychologists consider it as impuls, volition and striving. The awareness of packaging the public opinion is also the the way to reach ideal achievements as expected by public. The more spacious shaded area between the expectations of candidates with voters is created, then the greater the chances of a candidate will get to win the battle of image perception. CASE STUDIES Y 1. Cyberpolitics Campaign of Partai Nasional Demokrat National Democrat Party (Nasdem), is a new party that for first time will participate in 2014 general election. Having interest to observe the activities undertaken by the Nasdem cyberpolitics, and seeing the enthusiasm of cyber communities and social media, the researchers realize that it is not only as a socialization purpose, but it is also considered as online marketing tools for political campaign. Internationally, the way of this campaign has brought Barrack Obama to be elected as the president of the United States in two periods. His victory was assisted by social networks like twitter, blogs, and Facebook. According to that situation it proves that social media campaign is effective, and it brings advantages. In Indonesia, it has been used but limited to being the complement of the campaign. According to MarkPlus insight, the number of the internet users in Indonesia by the end of 2012 ha reached 61.08 million people. The figure increased by about 10 percent than in 2011. To dominate the communication with the public becoming one of the key success to win the competition in politics and social media is an effective channel. The political movement or activities by using social media is commonly used in Indonesia. Nowadays, politicians are aware of using social media. Moreover, while facing legislative and president election in 2014 Patrice Rio Capella, General Secretary of Nasdem party, is demanded to be able to make relationship with the citizens through social media. It is expected to become one of the key successes to win Nasdem Party leading by Surya Paloh to socialize their programs by using Facebook, blog or website. It becomes the thesis of cybermedia. Cyberpolitics Campaign of Partai Gerakan Indonesia Raya (Gerindra) The first general election in 2014 has passed in Indonesia, but the politicians have not stopped working yet. The general election to choose president needs a tight strategy. Gerindra still needs supports collected from social media. Besides using the line advertising through mass media such as TVC, the social media is also considered as integrated marketing communication tools as the medium between the leader of political party and the society.
2.
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Conversations in social media such as Facebook and Twitter are now able to break through the wall of bureaucracy which has been a barrier between the public and political elite. Egalitarian, responsive and cozy styles are the hallmark of the users of Facebook and Twitter. Low budget becomes one of the reasons to use social media. Some of the political parties recruit media online teams to make them as a tracking conversation among social media users. Gerindra seriously handles this part by hiring 13 (thirteen) people to manage website, Facebook and twitter for this party. Team members take turns giving status updates, reply comments and friends on Facebook mentioned by the 'follower' or followers on twitter every minute. Citing news at Antara News, the Gerindra chairman, Suhardi, said that social media was an effective medium to interact with the community. His statement was delivered with a single 'click', and it could immediately be accepted by thousands of people in a short time. Then, people can directly comment on the statement. Regarding this phenomenon, Gerindra leaders often consider input from Facebook and twitter to arrange party’s internal policies. For example, in the nomination of Deputy Governor of Basuki Purnama Tjahaya, Gerindra got a lot of feedback from the Facebook and twitter. Suhardi said, Gerindra would maximize the use of social media in winning legislative candidates and presidential candidate in the 2014 election. This is a “ground war' strategy of Gerindra. Gerindra has 18 043 followers with twitter account @ Gerindra and 1.236 million friends on Facebook with the same name. Meanwhile, the presidential candidate, Prabowo Gerindra, has 151 059 followers on the account @ prabowo08 and 1.2 million friends on Facebook with the name Prabowo. CONCLUSION Cyberpolitics: The Transformation of Marketing Politics The case studies described in the paragraphs above have raised several related issues between Cyber Media and political space. It is important to build the Cyber Media space in ways that combine mobility, interactivity, and visibility. Now we can see the theory in which the activists of Cyber Media enable to configure interactively inter-connected media between old media and new media. A Cyber Media space theory is an important part of the emergence of media-YouTube, Facebook, Twitter, and so on. Meanwhile, the term 'old media' such as television and newspapers are important links that exist in the space CyberMedia. 'New' and 'Old' media are locked in a relationship, and they cannot be separated because they are a single entity in the historical development of communication technology. They are interdependent, reinforce each other, and complete each other well. For Nasdem and Gerindra, the text messages and digital interaction have functional benefits as devices delivering the importance information to develop visibility news in television. The combination among mobile phone, computer and television should be connected in an integrated way through social media in order to be shared widely. Meanwhile, the future study of political communication related to cyber depends on systematic research about problems, and explores issues connected with the theory as the way to discuss “old “and “new” in integrated ways. Social media is not resilient enough to build propaganda without television support. In contrast, television is still pretty tough to stand on its own without the help of Cyber Media. The important point is not the time to celebrate or lament the advent of new media, old media, in fact, is still capable of being themselves. However, we must be careful not to adore the new technology. Otherwise, we stay to focus on people who are politically motivated when they use the technology in a social and political context in each of their actions, both nationally and globally. Cyber Media space is one of the social networking sites as stated by Bolter and Grusin opinion: 'Media has the right, but the right agent ... limited ... he is an agent of cultural change agents through formal material interaction, and economic logic that creep in and out of the reach of individuals and social groups '. To follow the general line of thoughts is to avoid media determinism. In this regard, we propose a theory of media dependency and imperialism that find an agent exclusively in the structure of the political economy; media technology; and culture, and a theory of active users who think about the meaning of media messages. Referring to this case, the relationship between communication practices and situations in areas requires further exploration and requires a lot of theories. One way to begin with in the study is to distinguish between information and
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mobilization. 'Twitter Revolution' is developing considerably among countries such as Indonesia. Cyber facilitates crossborder exchange of information, but how effective the cyber space in organizing the masses is still under investigation. It could be argued that the nature of the media 'public' and the high visibility they have make them perfect to combine mass diffusion, while information at the same time makes them ineffective in carrying out operations in the context of volatile clandestine. Cyber Media space provides an alternative space for social activity control (Kraidy, 2006). Process of technology enables to take place, where other actors are ignored after another actor who plays another role. Social Construction of Reality at Cyber Media Peter L. Berger and Thomas Luckman provide an overview of social construction. The social construction of reality occurs simultaneously in a procession through three stages. The first is the externalization. The second is objectification, and the third is internalization. The three of such processes occur and fuse among individuals in society. Actually, it is all right to manipulate the reality of Cyber Media, but it still needs a companion from conventional media like
television, radio and newspapers. Substance theory and social construction of reality approach assumed by Berger and Luckman are simultaneous processes that occur naturally in the language through daily life in a community of semi-primary and secondary. An important note in this discussion is that the realm of the mass media has not been much discussed when the initial research is done. The social basis of this approach is that the theory and the transition-modern society in America in about 1960, in the era of mass media, was still an unpopular thing t and had not been an interesting phenomenon to be discussed. Thus, propaganda at the time still used manual media away from today’s technology. Thus, the theory of social construction of reality delivered by Peter L. Berger and Thomas Luckman had not included the mass media as a variable or phenomena that influenced the social construction of reality at that time. Now a change has occurred with maximum speed and no one has been able to stop, especially the advancement of communication technology-based mass. Without the existence of mass media, the message distribution in the social construction of reality will improve slowly. It needs more time to build opinion for creating reality of the media. It can be spatial (discontinuous), and takes place in a hierarchy-vertical structure, in which the social construction begins from leaders to subordinates, leaders to their masses, clerics to its students, teachers to students, parents to their children, and so on. In this context, the social construction of the building requires more gate keepers.6.
6
Onong Uchjana Effendy. Ilmu, Teori dan Praktek Komunikasi. (Bandung: Aditya Bhakti, 2003), h. 65
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The Cyber Politic: Transformation of Marketing Politic in Cyber Age REFERENCES 1. Allen, V.L. Power in Trade Union. London: Longman, 1995. 2. Bigogiari, D. The Political Ideas of St. Thomas Aquinas. New York: Hafner, 1953. 3. Castells, Manuel. The Rise of The Network Society. Oxford: Blackwell, 2001. 4. Geertz, Clifford. Politik Kebudayaan. Yogyakarta: Kanisius, 1992. 5. Hidayat,Taufik. Ilmu Komunikasi dan Sistem Politik. Jakarta: Qisthi Press, 2007. 6. Ishak, Otto Syamsuddin. Dari Maaf ke Panik Aceh. Jakarta: LSPP, 2011. 7. Kraydi, Marwan M. Hipermedia Space and Global Communication, Annenberg: the Universtity of Pennsylvania Press, 2011. 8. Marbun, B.N. Kamus Politik. Jakarta: Pustaka Sinar Harapan, 2007. 9. Nimo, Dan. Komunikasi Politik: Komunikator, Pesan dan Media. Bandung: Remaja Rosdakarya, 1993. 10. Reade, H.M. Political Theory. London: Sage Publishing, 1982. 11. The World Classic Edition. Second Treatise of Civil Government. Oxford: Oxford University Press, 1947. 12. Schmandt, Henry J. A History of Political Philosophy. New York: The Bruce Publishing, 2002. 13. Suryadinata, L. Political Thinking of the Indonesian Chinese. Singapore: Singapore University Press, 1995. 14. Bolter, J. D. & Grusin. Remediation: Understanding new media, Cambridge, MA: MIT Press. 1999 15. Kraidy, M. M. Reality Television and Arab Politics: Contention in Public Life. Cambridge, UK and New York: Cambridge University Press. 2009 16. Sreberny-Mohammadi, A. & Mohammadi, A. Small Media, Big Revolution: Communication, Culture, and the Iranian Revolution. Minneapolis: University of Minnesota Press. 1994 17. Onong Uchjana Effendy. Ilmu, Teori dan Praktek Komunikasi. (Bandung: Aditya Bhakti, 2003), h.65 communications as part of CyberMedia , though it is same in context but different network acceptance and global. View: Greedy Alexa, Utopia Virtual Community in Singapore. (Singapore: FEST Publishing, 2010) 1 Antony, Riuhnya Persimpangan Itu: Seri Komunikasi. (Solo: Tiga Serangkai, 2004), h. 99, 81, 103 dan 47. 1 Ramlan Surbakti, Memahami Ilmu Politik. (Understanding Political Science. Jakarta: Grasindo, 2010) 1 H. Victor Wiseman, Politics: Master of Science. (London: Routledge and Kegan Paul, 1969). 1 Henry J. Schmandt, A History of Political Philosophy, (United of America:the Bruce Publishing Company, 1960), h. 3. 18. , p. 119
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DEV VELOPIING SO OCIAL M MEDIA STRATE S EGIES IIN FACIING GLO OBAL CO OMPET TITIVEN NESS F FOR MA ARKETIING CO OMMUN NICATIO ON ACT TIVITIES (C Case Studyy at Air Asia Airlinees) Marrtha Tri Lestari and Inndra Noviaanto Adibaayu Pamunggkas Telkom Un University,Bandung ng-Indonesia [email protected] m gmail.com; [email protected] m
ABSTRACT A Today, using intternet activities as a tools for developing d som mething in our daily d life especiially in some coompanies is on ne of an importaant th hings. Using intternet becomes something thatt very importannt for peoples both b for personaal and business activities. By using u internet, we w caan get a lots off information annd doing comm munication speeddily. The intern net utilization also support mar arketing commu unication prograam in n global compettitiveness especcially in sharing g companies meessages to its market. m Air A Asia Airlines is the one of the t biggest low w cost airlines inn the world which most of their marketing acctivities using in nternet and soccial media. m In journaal with title “Atttracting user so ocial media enggagement : a sttudy of three bu udget airlines ffacebook, we can found that Air A Asia, A Southwestt Airlines as low west cost airlin nes using internnet to doing theeir marketing communication c activities, diffferent from Ryyan Air, A their still ussing traditional media to do marketing m comm munication activ vities. Since 20 001, Air Asia A Airlines has directly changed the t no orm of aviationn in the worldd as innovativee solution of trravelling, efficiient process an nd some new aapproaches thaat created by thhis co ompany. One of them is in thee part of promottion purposes, tthis company iss able to cut in promotion budg dget through cyb ber activities. The T ussing of social media activitiees is the one of o the way thaat company ussed to engage with the custoomers and supp port relationshiips marketing. m The objectives oof this research is researchers want w to know tthe way of Air Asia Airlines strategies s in usiing social mediia to support thhey marketing m comm munication activvities, and in thee end of this ressearch is about social change behavior. b In thiss research, reseearchers used caase sttudy method annd qualitative research using literature l review w with related theories in ord der that to know w in-depth abou ut the developiing sttrategies. The reesults of this sttudy will show the steps of soocial media straategy that used by this companny as marketin ng communicatiion sttrategies.
© 2014 Marthha Tri Lestarri and Indra Novianto N Addibayu Pamun ngkas. Published by Telkkom Pub. Ltd d. Selection andd peer-review w under respo onsibility of T The ISCLO, Department of o Communiccation, Univeersity of Telkom, T 203422 Bandung, Indonesia I . Keywords K : Com mmunication strategies, s Glob bal competitivveness, Social Media M
n 1 Introduction Sociall media technology can be said as a “givven” in this era. It has been considered ass a “must hav ve” as a mediuum o build comm munities and coommunicating g the brand. Itt must be reallized that peop ple lived larggely in “offline” situation annd to made m the interaaction limitedd from one peerson to anothher person by face to face communicatioon, in front of television annd using headphonne. Today, thhe way of com mmunication hhas changed through the enhancement e oof internet an nd social media. People are enjoy making innteractive com mmunication tthrough media. This situation is also uused by many y organizationnsin ncluding businness, nonprofi fits and govern nment agencyy with the purp pose of markeeting, public rrelation in ord der to get direect co onnection to customer annd stakeholderr whereas to day most of them use sm mart phone oor gadget in daily life. The
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Engagement with the customer through social web means customer or stakeholders become participant rather that viewer. They can easily give the feedback to the promotion. Air Asia airlines is the one of the airlines company which uses social media engagement with the purposes of promoting. This company can be said as the trendsetter in Asia that used internet connection to engage with the audience. This company used social media to inform their marketing communications program. In the moment people read the message, they can easily give the company feedback. For instance while this company inform about their sales promotion program “free seat” on Facebook and twitter. Mostly customer give them feedback through the comment such as the great feeling while they happy because of having the free seat or expressing sad while they don’t get it. In directly, it become word of mouth building through online medium. It means that engagement in social context implies that customer has taken personal interest in what the company bringing into the market. Ultimately, it become social business for Air Asia airlines because there is participation with and by its customer and stakeholder in pursuit of an organization that is strongly connected to the company through the participative ad collaborative process. As a result social business is often better able to respond to market place dynamic and competitive opportunities that traditionally organized and manage the firm. Today, there are many low cost airlines (LCA) model born after Air Asia airlines and also follow what this company do in running the business such as , online reservation , print own ticket , no food on flight but sale it until using social media as a medium to communicate with their audience. The followers of the LCA even give more strategy to make different value from the “gorilla” in LCA as a Unique Selling Preposition (USP). As a trendsetter, Air Asia has succeeded making collaboration between community members, employees or firm and its representative comes about both parties in the transaction see a value in completing the transaction, often repeatedly. It is proven by the output of collaborative process – the number of jointly developed solution advance in expert community. As the most basic level, while a company use online interaction with Air Asia airlines, the activity itself can be tracked. For instance; while audience buy the ticket, they put their email to fill in reservation process and indirectly it becomes a data base for the company to inform further promotion. This company has done the process of customer relationship management (CRM) whereas the sales cycle, CRM form da data driven understructure that power an overall customer life cycle. Based on historical transaction, the insight into what customer may need next, or when a particular customer may be ready for an upsell, offer generated based on past transactional data and the larger purchase or use patterns that exist across the entire customer base. 2 Research Background The biggest opportunity in marketing communication has been the shift from “push marketing” to more of a conversation with customers. In the past, companies were limited to communicating directly with people through radio and television commercials, print advertising, billboards, and other “old media” ways of marketing. But somewhere along the way, people got cynical. It turned to realized that friends and colleagues were probably more honest about products and services than the self-interested companies that marketed to us. So it started listening to our friends and social networks more and traditional advertising less. As in figure 2.1 below ( Treadway and Smith,2010), it shows that the product or service experience creates a conversation, one that is often directed or intended for a specific audience and which often exposes or suggests an opportunity for innovation. This is the new role of the customer, expressed through its impact via the traditional CRM process, integrated now with a social component.
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DEVELOPING D SO SOCIAL MEDIA STRATEGIES IN FACING GLO OBAL COMPETIITIVENESS FOR R MARKETING GC COMMUNICAT TION ACTIVITIE IES (Case SStudy at Air Asia Airlines)
According A to (T Treadway andd Smith, 2010:39) the way should framee our thinking when setting the stage for marketing m plaans to oday? Five yyears from noow? and how w should longg-term strateg gy be structu ured to give social mediaa a competitiive ad dvantage? alloow me to sugggest five broad d themes that I think will deefine social media m and markketing for yeaars to come: 1.
2.
3.
4.
5.
The n need to share information.. If thee rise of mainsstream social media m has prooved one thing g, it is that a lo ot of people hhave an intrinssic need to shaare thingss about themseelves. Maybe it’s self-impoortance, mayb be everyone needs to feel liike a celebrity y. I don’t know. But soocial media tooday captures a lot of munddane informattion about useers. Word-of-m mouth marketting has becom me both a threat and ann opportunity to t modern bussinesses—soccial media provides the louddspeaker. Immeediacy is heree to stay. All off the tools proovided in sociial media givee people an opportunity o to o respond imm mediately to th hings and shaare those reactions withh friends in reeal time. It couuld be a greatt experience with w a restauraant, a terrible interaction wiith an airlline at the airpport, you name it. With imm mediacy comees human emotion power. Everyyone is a sourrce of informa ation, and evveryone is bia ased. In thiis era, peoplee don’t just hear h about neews, events, and so on frrom the local al tV news brroadcast and//or newsppaper. Peoplee (not to mention your ccustomers) heear about things from bloogs, twitter, articles, casuual conveersation Noise level Everyyone is now a publisher and d a celebrity inn their own world. w So it takes a lot of efffort to keep up u with it all, if you chhoose to do so. this can wo ork two ways for marketers—some peop ple will respoond to direct engagement e thhat cuts thhrough the cllutter. Others will instead ignore your noise alongsiide everyone else marketin ng a product or servicce. Meldiing of worldss. If som meone will likke it or not, th he openness oof social med dia means thatt it is almost impossible fo or users to keep differeent parts of thheir lives disttinct. things ddone offline in nvariably find d their way onnline and it may m not even be your ddoing. and all those things are a available ffor your personal and business contacts too enjoy
According A to ( Treadway and a Smith,201 10:33) , Sociaal media todaay becomes th he truth netwoork, here are seven truths of so ocial networks that can relly upon. If y going g to bookm mark one pag ge of this book k, bookmark tthis page becaause these trutths sh hould guide yoour thinking regardless r of what w you do w with social meedia: 1. social mediaa is the prefeerred way for people in yoounger demog graphics to communicate w with each otheer. Nothing ellse co omes close. 2. social mediaa is based on the t concept off friends, but tthat term todaay is very loossely applied. ssimilarly, profiles are looseely deefined and cann be used in a variety of waays by people, companies, brands, b and so o on.
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3. the more active a consumer is on the Internet, the more likely they participate in multiple social networks. oftentimes, these people are influencers within a circle of friends and have a tremendous impact on the opinions of others. 4. once information is shared on a social network, it is out there and can’t easily be contained. everything is out in the open and largely visible for other people to see. 5. social media is best applied in addition to existing Internet marketing programs and alongside other Web assets. When building a strategy, you must think comprehensively. 6. the rules are still being made. social media “etiquette” is still relatively immature. tread carefully.
Social Media Social media is online media that users can easier to participate, sharing and make some blog, social media, wiki, forum and virtual world. Blog, social media and wiki are one of a common things of social media that used by users in the whole world. Based on Andreas Kaplan and Michael Haenlein, said that social media as “a group of application based on ideology and internet that build by technology web 2.0, and it can be create some “user-generated content”. Kaplan and Haenlein created clasification scheme for many kinds of social media in the article of Business Horizons that published in a year 2010. They’re said there’re 6 (six) kinds of social media, such as : 1. Collaborative Projects Some of social media that can make some content and can access by users globally. There’re 2 (two) sub-chategory of this social media, there’re : i) Wiki is a site that users can make something new, to adding something, deleting something or change the content based on text. Examples : wikipedia, wikiubuntu-ID, wakakapedia, etc ii) Bookmark Social Application is an application that can create some group ideas based on internet link or media content. Examples : Social Bookmark : Del.ici.ous,StumbleUpon, Digg, reddit, Lintas Berita Writting : cerpenista, kemudian.com Reviews : Amazon, GoodReads, Yelp 2. Blog and MikroBlog Is an application that can helped users to posting all about things to make peoples understood that things. Blog is some website that can sharing something about author or group of author even about some opinion, sharing experineces, or daily rutines. Examples :  Blog : Blogspot, Wordpress, multiply, Live Journal, etc  Microblog : Twitter, Tumblr, etc  Forum : Kaskus, forum detik, etc  Q/A (Question/Answer) : Yahoo! Tanya Linux, etx 3. Content Is an application that used to sharing to peoples in a long distances or short distances, sharing something like videos, e-book, pictures, etc. Examples :  Image and Photo Sharing : Flickr, Photobucket, Devianart,etc  Video Sharing : Youtube, Vimeo, Mediafire, etc  Audio and Music Sharing : Imeem, Lastfm, multiply, etc  Design : Threadless, Ganti baju, etc
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4. Social Networking Sites Is a sites that can help someone to make some profiles and connected to anothers users. This site is an application that can make users to connected with others by using private profiles or private accounts. Examples : Facebook, My Space, Foursquare, etc. Prof J.A. Barnes (1954) said that : “ social media is social structure that build by some individual or groups elements. It show that in this site users connected with others because many kinds of reasons such as a same sociality life segment”. (wibawaadiputra.wordpress.com).
Examples : 
Facebook Is a website that had a social networking theme, published 4th of February 2004 with Mark Zuckerberg as a founder.  Twitter Is social media that focused on blogging micro and RSS services to spraid some information. It usually called “ Internet Short Message Services”. Twitter published on 15th of July 2006 with Jack Dorsey, Noah Glass, Evan Williams, and Biz Stone as a founders.  LinkedIn Is social media that focused on profesional relations. Builded by Reid Hoffman and friends in ayear 2003 As a site that played in a proffesional segment, it can make users to find some relations and working advertisement.  My Space Is a popular social networking site that offering social activities between friends, private profiles, blogs, groups, pictures, musics, and videos for adults teenangers in a whole world.
In a The Media in your life an introduction to mass communication book / Jean Folkerts, Stephen Lacy, Ann Larabee., 4th ed, said that “While many social networking sites are available, MySpace has proven the most successful.
According to Nielsen/NetRatings, MySpace had over 49 million visitors in August 2006, ranking seventh of the most popular websites. It was`also the fastest growing : Between June 2005 and June 2006 it experienced a 183 percent increase in audience”. 5. Virtual Game Worlds Virtual world that included replica environment about 3D, user can see in custom avatar figure and having interaction with others like in a real life. Example : Online Game 6. Virtual Social Worlds This is an application that stimulated a real life using internet media. VSW is a site that can make user to interacting in 3D platform using avatar figure and look a like a real life. Example : Map : wikimapia, googleearth e-Commerce : ebay, alibaba 3 Methodology According to journal with title “Attracting user social media engagement : a study of three budget airlines facebook pages said that “airline sector is not very well covered in terms of analyzing the application of social media,this is
interesting because on one hand, airlines were probably the early adopters on internet-based technologies within their marketing mix”. In This paper, researcher used many kinds of journal about Air Asia marketing communication activities using social media and based on related theories. This paper used descriptive qualitative method to describe marketing communication strategies in Air Asia Company using social media. In this literature review research, author compared between many kinds of related journal to looking for marketing communication activities using social media.
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4 Findings and Discussion In this section we can said that based on journal with title “Attracting user social media engagement : a study of three budget airlines facebook, it said that social media cannot full covering marketing communication activities in airlines industries but different in AirAsia airlines, their using Facebook account, more than one Facebook account to doing marketing activities. “Facebook wallpost which were publishes from 15 June to 31 July 2012 were captured an excel worksheet said that this is the most popular wall posts with a dramatic increase in “people talking about this”. The data focused on the four steps to engage customers : users connection, users engagement, influential power, and integration function. Resulted from this research are colaboration between four steps to engage customers and based on Treadway and Smith theory. They suggest five broad themes that they think will define social media and marketing for years to come:
1.
The need to share information. Air Asia company is a big airways company and it had a familiar tagline such as “Everyone can Fly”. From it tagline we can said that Air sia company is an airways company who want to sell something with lowest cost, so many peoples in many kind of segment can join with Air Asia airways to get their way to going home to their village. According to that reasons, this company think that they must share a lots of informations that related with many kinds of promotions things that happened in Air Asia promo programs, and how do they will do that way? In this technology era, we also know about social media era. Air Asia doing lots of promotion programs and spread all kinds of promotion program of Air Asia using a social media, they had official website, facebook, twitter to spread all promotion program messages. Why that they do it using social media? Because they think many peoples using social media right now, everyday they’re doing activities by using social media, at work, at spare time, at home, even at school. Its social media era, so Air Asia do the same way! Beside that, in official website of Air Asia, when customers booked a airflight, they will put their data on it, and the data will be kept safely landed in customers bank data in Air Asia. When they need to spread promotional program informations, especially to customers Air Asia they’ll spread all the ways, such as to their email or to their social media accounts that already landed safely in Air Asia customers bank data. Facebook fan page helped this airlines to promoted their message content, ini Southwest Airlines too, but different way that we found in Ryan Air, they’re using traditional tools even they didn’t have media social account for doing their promotion activities.
2. Immediacy is here to stay. In this section, Air Asia used it to looking forward to all kinds of feedback from their customers. When customers choose Air Asia as their airways flight to going home to their hometown, we thought that they want an exelence services, right time on a right place services, it means delay minimalizer, friendly airways staff and fly attendant and many more. If they get it all from Air Asia and they will say to their friends, familiies and colegues, and it will build some positive word of mouth spreading and actually will be a great feedback from Air Asia company, it will make and get a new customers like multilevel marketing do. But, if customers get an opposite with what they hoping from Air Asia so it will make something terrible and negative for Air Asia company, because customers will spreading negative messages with word of mouth activities and it one of effective way of communication and can make some companies collapse. In their Facebook fanpage all customers feel free to say something positive or negative about Air Asia’s services, if feedback from customers positive there will be some advantages for this Airlines using word of mouth activities, otherwise if there’re negative feedback spread in the Facebook wall there will be disadvantages word of mouth from customers to Air Asia potential customers.
3.
Everyone is a source of information, and everyone is biased.
According from this section we can said that every customers of Air Asia company are a source of information, they can be an angel customers or the devil one’s depend on what they’d get from this company. Many peoples as Air Asia customers had many kinds of social media account, so when they feel happy with all services elements from Air Asia they’ll spread it out and it will become advantages for Air Asia off course but when it goes in opposite ways it will
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become something terrible for Air Asia. In This research author found 2 kinds of feedback from customers, whiches positive and negative one’s. In Facebook Air Asia fanpage every customers is being a source information, neither is good or bad information. 4. Noise level Noise level is something that companies must be able to make it none from marketing communication strategies. Noise level can make something negative from some companies. In Air Asia company, noise level is related to negative customers feedback. When customers spread negative messages with their own world it means their own message, writing down in mass media, in their social media accounts, in their timelines, in their messanger status, many kinds of potentialy customers Air Asia can read it and spontanious can make they go away from potential customers become unpotential customers, and in this section we can called noise level. If noise level happened in some Facebook Fanpage Air Asia, this airlines must find some way to re-building new image from customers, with many kinds of things, such as : using Marketing Public Relations activities internal and external, Corporate Social Responsibility (CSR), etc. 5. Melding of worlds. In this social media part, everyone, everypeoples can join with social media accounts of Air Asia customers (inconditionally) especially Facebook Fanpage account.. When peoples do not know eachother but they linked by something, they can saw all of kinds of timelines, messages, repost and anykinds of messages that related with Air Asia cutomers satisfaction. For example : “A” is Air Asia customer and she’s feel satisfied with Air Asia services and she put some satisfaction messages in her all social media account. When “B” such as potential customers of Air Asia saw messages from A’s social media account and “B” choose Air Asia such as her airways to go home, so it such a advantage melding of worlds for Air Asia, and opposite of that case if “A” put something negative spreading messages in her social media account and “B” saw that messages, and “B” did’nt choose Air Asia for airways to get her going back home, so it such a disadvantage melding of worlds for Air Asia. We can said that in this part, communication chain network will be build in Air Asia Facebook wall, there so many peoples in different countries will make some communication chain network that will build some word of mouth either bad or good one. Based on this literature research in some journal, we can compare with 3 (three) lowest cost Air Lines (Air Asia, Southwest Airlines and Ryan Airlines), Air Asia is one of company that already totally used social media as their marketing communication strategies. Based on 5 (five) elements Theadway and Smith theories, it said that Air Asia had messages from positively customers satisfaction and negatively from customers unsatisfied. So, this company mostly to be aware to do their services to their customers, because we did’nt know how many Air Asia’s customers whiches use social media account to spread their satisfaction message about Air Asia services. Air Asia using Facebook and Twitter such their tools four steps to engage customers : users connection, users engagement, influential power, and integration function.
5 Conclusions Conclusion of this research are to anticipating either bad or good satisfication from Air Asia customers, Air Asia company must be able to give some best services exellence to those who choosing Air Asia such a airways to them to get ticket for going home. So, when Air Asia can minimalize unsatisfaction customers, Air Asia no worries about customers who will spreading negatively messages in their social media account. Beside that, Air Asia company make some evaluation program whiches looking forward for their feedback, maybe Air Asia company invited them to some annual event that related to looking for feedback Air Asia customers and in that event Air Asia company invited loyal customers that had satisfied with Air Asia and customers that had bad experience when their flight with Air Asia. So, if both customers invited Air Asia can get some balance feedback (good or bad experiences customers) flight with Air Asia and it will become evaluation for that company to do something better day by day. To minimalize some negative feedback from customers, Air Asia can rebuilding image with doing some activities such as : External and Internal Marketing Public Relations, Corporate Social Responsibility program, and so on.
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6. Limitations and Implications on Future Research For future research, i hope that next researcher in the similiar topic can using many more of literature journal and compare more indepth about lowest cost airlines, not just only 3 (three) lowest cost Airlines in Asia but maybe in Europe or America. 7. References
Books Chris Treadway, Mary Smith. (2010) Facebook Marketing, an hour a day. Wiley Publishing,inc,Indianapolis,Indiana. Jean Folkerts, Stephen Lacy, Ann Larabee. (2008) The Media in your life an introduction to mass communication (fourth edition)
Journals Rossana Leung, Markus Schukert, Emmy Yeung. Attracting user social media engagement : a study of three budget airlines facebook. Department of Business Administration Charitas Institute of Higher Education, Hongkong; School of Hotel and Tourism Management The Hongkong Polytechnic University, Hongkong; HKU Space Po Leung Kuk Community College. Business Horizons. Volume 53,Issue 1, January-February. (2010) Social Media marketing e-book, Communicate Better With Social Media Marketing, USA. The Marketing Strategy of Air Asia Tourism Essay. Ukessays.com.
Thesis Philip Dietlin. (2004). The potential for Lowcost Airlines in Asia. Massachusetts Institute of Technology.
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How To Improve IT People Capabilities in Stated Owned Enterprise (BUMN) Through IT Forum (FORTI) Judi Achmadi, ST, MBA a
PT. Sigma Cipta Caraka, Menara Dea, 7 Floor, Kawasan Mega Kuningan, Jl. Mega Kuningan Barat IX, Kav E.4.3 No 1 th
Abstract FORTI BUMN is an Information Technology Forum for State Owned Enterprises (IT Forum for SOEs). This forum was established on 29 November 2010. The purpose of FORTI BUMN establishment are to provide a place for learning IT management and development knowledge for BUMN. Since 2010, FORTI BUMN has already had a lot of activities such as: IT Workshop, Member coordination meeting, IT Governance award and publishing IT magazine. Based on a simple survey held by FORTI among IT people in BUMNs on March 2014, it was found that the main handicap for IT development in BUMNs was IT people. Hence, IT competence standard is very important for BUMN so they can standardize and utilize their IT employee. With IT people standards defining by FORTI, the BUMN enterprise can develop IT Master Plan that is requested by government's regulation and help to improve their enterprise strategy and objectives.
©2014 Judi Achmadi. Published by Telkom Pub. Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia. Keywords: State Owned Enterprise, BUMN, IT Forum, FORTI
1. Introduction Indonesia BUMN (Badan Usaha Milik Negara) or SOE (State Owned Enterprise) based on Republic Indonesia law no 19 of 2003 is an enterprise which fully or majority owned by Indonesia government. BUMN can be a non-profit enterprise that has objective to provide products or services for public. Since 2001, BUMN ministries that lead by Minister of BUMN, coordinate all BUMN managements and strategies. BUMN have two objectives as follows: - Social objective: focus on public benefit through non-profit business - Commercial objective: focus on profit through commercial business for government income FORTI BUMN is an Information Technology Forum for State Owned Enterprises (IT Forum for SOEs). This forum was established on 29 November 2010. The purposes of FORTI BUMN establishment are: - Providing a place to develop IT capabilities including human resource and IT strategy for BUMN. - Aligning and integrating IT at BUMN with its business strategy. - Providing IT strategic thinking and policies, in the form of advice, assessment, feedback, opinions and recommendations to the Ministry of BUMN and FORTI Members. Based on a simple survey held by FORTI among IT people in BUMNs on 28 March 2014, it was found that the main handicap for IT development in BUMNs was IT people as shown below :
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Fig. 1. Handicaps of IT development in BUMNs
Hence, one of working program from FORTI BUMN is developing competency database for IT managements and staffs. The main purpose of this program is to synergize the Human Resources (HR) capabilities among BUMNs. In many State Owned Enterprises in Indonesia, there are wide ranges IT people competence such as programmers, system analysts, web designers, data center specialists, ERP specialists, etc. that need to be standardized to achieve a better results. 2. Approach and Model
2.1. General Approach The general approach model for improving IT people capabilities through FORTI can be describe as follows:
Fig. 2. General approach model for improving IT Capabilities through FORTI
Based on the model on Fig 1, FORTI BUMN needs some supports from the Government as the regulator and the enterprises as a user. The collaboration between the three parties will give better output for improving the capability of the IT people of State Owned Enterprises.
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2.2. Collaboration Phase Collaboration is a mutually beneficial relationship between parties or different organizations that work toward common goals by sharing responsibility, authority and accountability for achieving results. In Indonesia the collaboration is reflected on Gotong Royong or mutual aid tradition that is focused on a common result without thinking about personal interest.
Fig. 3. Collaborative Model [1]
The collaboration for formulating the standard of IT people’s capabilities is adopting the collaborative model defined at on Fig. 3 and that can be detailed as follows:  The role of alliances & standardization bodies is played by the Government using their responsibilities as the regulator. The government defines IT people capabilities compliance through an Indonesian law as a main reference for FORTI.  Environment scanning role is played by all BUMN as the FORTI member. They contribute by sharing their ideas, experiences and problems that specifically happen in their companies related to the IT people capabilities.  Project experience role is played by BUMN member that has major task in IT business such as Telkomsigma. They shared their experience on developing IT people capabilities and how to utilize the capabilities and capitalize them to their company business.
2.3. Standardization Phase The output from the collaboration phase will be formulated by FORTI and used as an input at the standardization phase. Standardization is the process of developing and implementing technical standards. It is usually a formal document that establishes uniform engineering or technical criteria, methods, processes and practices. Standardization can help to maximize compatibility, interoperability, safety, repeatability, or quality, in addition; it facilitates the commoditization of formerly custom processes as well.
Fig. 4. Standardization Phase
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The standard formulation process as described at Fig. 4 can be detailed as follows:  Collaboration Input is the stage when all the relevance information gathered at collaboration phase are filtered and formulated by FORTI Team.  IT Capabilities Needs is the stage when FORTI Team gathered information of real IT capability that needed for running IT at the enterprise level based on professional reference.  Gap Analysis is the stage when FORTI Team compares the actual conditions with potential conditions. At this stage the data from collaboration input will be compared with the IT industry condition.  Expert Judgment is the stage when expert forum from FORTI member take a decision which standard criteria will be adopted by FORTI.  Standardization is the stage when FORTI members formalize the decision that already decided by FORTI expert and distributed to all FORTI member. Output from standardization phase is define as “HR Core Competence for IT” and divided into seventeen groups capabilities as follows: Table 1. HR Core Competence for IT [2] No 1
Core Competence Computer Operator
Definition Responsible for operating basic standard application Responsible for developing certain application using specific programming language Responsible for daily operation of IT equipment
2
Computer Programmer
3
IT Operation Management
4
Computer Scientist
Responsible for researching new product innovation, designing new technology and leveraging existing technology
5
Business Analyst
6
System Analyst
7
Database Management
8
Network and System Engineer
Responsible for analyzing business and organization needs, designing appropriate system, assessing business model and IT integration Responsible for analyzing IT problems, develop action plan, recommending hardware and software for computing, coordinating development for business needs Responsible for storing, organizing, managing access level and securing database Responsible for daily operation of communication system, computer system and network
9
Network and System Architect
10
Web Designer
Responsible for designing efficient and effective network, communication and computer system Responsible for visual web design
11
Business Intelligence & Analytics Specialist
Responsible for providing information and data analytics for decision maker
12
Data Center Specialist
Responsible for managing data center including various resources: power, cooling system, fire suppression, server, network and storage, data backup maintenance and access management
13
ERP Specialist
14
IT Architecture Specialist
Responsible for implementing and daily maintenance the Enterprise Resource Planning Responsible for integrating business need with IT, developing business architecture, infrastructure architecture, application architecture and information
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Competence Needed Basic PC knowledge, office application, internet use General programming, data base programming, web/internet programming, multimedia programming Hardware knowledge, various PC OS, various PC application over various communication device Algorithm and programming, data structure design and basis data theory, numeric analysis, computer graphic and computer vision capability Company business knowledge, communication skill, project management, general IT and business model development Programming, OS, computer hardware, good communication skill, technical specification writing skill, project management Administration capability, various data base system, various OS and back up mechanism Various network and communication software, various network and communication hardware, OS, electrical concept Network design concept, virtualization, cloud computing, unified communication Visual graphic concept, animation tools (flash), programming script (JavaScript, php, asp) Data warehouse concept, various ETL application (extract, transfer, loading) dashboard and analytics application, company business knowledge Data center design including power, cooling system, fire suppression, cabling. Server, network equipment, and storage equipment capabilities. Backup and recovery mechanism. Capacity and configuration management ERP data structure, ERP function process flow IT Architecture Body of Knowledge (ITABOK), knowing various architecture of leading product technology (IBM, Microsoft, cisco,
How To Improve IT People Capabilities in Stated Owned Enterprise (BUMN) Through IT Forum (FORTI) No
Core Competence
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IT Strategy and Planning Specialist
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IT Security & Risk Management Specialist
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IT Quality Assurance Specialist
Definition architecture Responsible for matching business unit needs with available technology, formulating technology direction, system architect and implementation strategy Responsible for securing company data and information from unauthorized parties and comply with regulation Responsible for checking, testing and measuring suitability technology with design and standard. Developing testing scenario to ensure technology quality performance
Competence Needed oracle, java, .net) IT governance framework, IT finance framework, latest information technology IT security framework, IT risk management framework Testing principal and methodology based on agreed design, standard and scenario. Understanding various OS, application and data base
2.4. Implementation Phase After having been formalized by FORTI, the HR core competence for IT would become a reference for all BUMNs and should be implemented to IT personnel from each enterprise. There are 142 (one hundred and forty two) state owned enterprises in Indonesia divided into 13 sectors with hundreds thousands of employees. No 1 2 3 4 5 6 7 8 9 10 11 12 13
Table 2 BUMN Sectors BUMN Sectors Water Supply, Waste Management and Recycling Sectors Agriculture, Forestry, Fisheries Sectors Wholesale and Retail Trade Sectors Mining and Excavating Sectors Manufacturing Sectors Professional, Scientific and Technical Services Sectors Gas, Steam and Cold Air Sectors Information and Telecommunication Sectors Transportation and Storage Sectors Construction Sectors Financial Services and Insurance Sectors Accommodation, Food and Beverages Sectors Real Estate Sectors
Number of Company 2 25 4 5 31 10 2 3 24 11 22 1 2
The government through FORTI will under supervise the implementation process for BUMN employees with the assistance from BUMN whose main business is on IT sectors. The process includes the assessment, training, coaching and certification process for IT personnel at each enterprise. Today’s FORTI organization structure is representing of government and BUMN with structure as follows: Position Chairman Vice Chairman Secretary Treasury
Table 3 FORTI Organization Name Imam Bustomi Judi Achmadi F. Hasiholan Tamba Alip Priyono
Company Ministry of BUMN TelkomSigma PPA Telkom Indonesia
3. Results of Approach After implementing the IT people capabilities improvement approach, each BUMN will receive a significant benefit from improvement of their IT employee capabilities. They can utilize their IT employee to develop MPTI (Information Technology Master Plan) for the company. Based on the Law no. PER-02/MBU/2013 [3] about Guideline of IT Development and Management for BUMN, each enterprise should have its own MPTI in 2015 at the latest. MPTI is a long-term enterprise planning for three to five years and related to IT development at BUMN to support enterprise strategy and objectives. MPTI document should contain:  Enterprise business context  IT assessment
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 Project portfolio  IT roadmap  IT governance The stage for implementing MPTI can be described on following diagram:
Fig. 5. MPTI Developing Methods
There are three stages for developing MPTI:  Assessment Stage: company should assess all internal and external factors related to IT that can gives effect to corporate business.  Business & IT Strategy Alignment Stage: company should align company IT strategy with company business strategic direction and then defining the IT goals.  Plan Development Stage: company should formulate MPTI strategy based on gap analaysis between existing condition and future targeted condition. MPTI will become reference for all IT person at BUMN to understand how importance IT strategy to support corporate business growth. MPTI development for each BUMN will differ based on scale of business for each company.
4. Conclusion This paper explained the IT people’s capabilities improvement approach that is implemented by FORTI to help Indonesian state owned enterprises to upgrade and improve their IT resources. FORTI approach is based on the collaboration within BUMN members, and each member contributes his/her experiences and capabilities to help other members to achieve the FORTI standards. IT resource standardization will give benefits to BUMN for improving the enterprise’s IT strategy and finally can support their enterprise strategy and objectives for its business growth. From legal point of view, IT people capability improvement will help enterprise to comply with the government’s regulation for developing the MPTI.
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References [1] GlobeIT Solution, 2014, Collaborative Model, http://globeit.in/globeit_pages/research_arm.htm. [2] FORTI BUMN, 2013, Kompetensi Inti SDM Teknologi Informasi. [3] Menteri Negara Badan Usaha Milik Negara Republik Indonesia, 2013, Peraturan Menteri Badan Usaha Milik Negara Nomor : PER-02/MBU/2013 Tentang Panduan Penyusunan Pengelolaan Teknologi Informasi Badan Usaha Milik Negara, Lampiran II : Panduan Penyusunan Master Plan Teknologi Informasi Badan Usaha Milik Negara.
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Impact of Organizational Culture on The Information Security Triad Puspita Kencana Sari, Rully Satriawan Deniharza Faculty of Economic and Business, Telkom University, Bandung, Indonesia
Abstract In many organizations, the implementation of information security management faces some barriers. Some of them are related to the employees who are resistant and lack of awareness to do the information of security policies and procedures. Those things can be influenced by their organizational culture. Therefore, this paper explores the impact of organizational culture on three aspects of information security, i.e. confidentiality, integrity, and availability. In this paper, the characteristics of organizational culture consist of four constructions; cooperativeness, innovativeness, consistency, and effectiveness. This study used quantitative method with multiple linier regression analysis. Data were taken using questionnaire to all employees of a telecommunication provider’s customer service office. It showed that all dimension of organizational culture significantly had effects on the implementation of information security triad simultaneously. Partially, the organizational culture had significant impact upon the confidentiality and integrity, but not on the availability.
© 2014 Puspita Kencana Sari, Rully Satriawan Deniharza. Published by Telkom Pub. Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia. Keyword: Organizational Culture, Confidentiality, Integrity, Availability, Information Security
1.
Introduction
Information as one of important assets of an organization needs to be protected like any other assets. Information security is intended to protect not only organizations’ valuable information, but also organization’s hardware and software to process the information [1]. Information security management (ISM) is more than computer security. ISM also includes policies, process, procedures, organization structure, hardware and software function, and needs to be implemented [2]. Therefore, discussions about ISM do not merely examine the technical things of security. Many factors can affect the implementation of information security in an organization. A research on several organizations in Taiwan found the relation between organizational culture and information security management. It showed that organizations that had flexibility cultures would have more inhibitors in implementing their information security management [3]. Some organizational factors also had significant impact on the effectiveness of ISM implementation, including IT competence of business managers, environment uncertainty, industry type, and organization size [4]. Another research also revealed that information security in some global financial service institutions also had significant correlations with some dimensions of national culture [5]. In this paper, the researchers discuss about the relationship of ISM with the organizational culture. It is similar to a previous research done by Chang & Lin [3]. However, this research took different organization from different country as the source of case study, specifically in Indonesia. Organizational culture consists of some basic patterns that are accepted and adopted in an organization. It underlies the way of thinking, feeling, reacting, and acting of its members in resolving the problem [6] [7] [8]. Many researches have been done to learn the organizational culture. A study of some organizations in Singapore showed that the cultural strength of organizations was related to the organizational performance that was measured by some financial indicators [9]. Organizational culture also has influence to some processes of information system (IS) development and implementation in organization [10]. Information security management is related to the use of information in an organization along with the process using information system. Therefore, this study needs to explore more about the relationship between organizational culture and ISM.
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The organizational culture can be described in some different dimensions among the experts. Lee & Yu divided the organizational culture in their research into five dimensions, consisting of innovation, support, team, humanistic, and task [9]. Chang & Lin concluded four characteristics of organizational culture that was divided in two dimensions; i.e. internal or external orientation, and flexibility or control orientation, as below [3]. a. Cooperativeness This culture is built based on internal-flexibility orientation characterized by cooperation among organization members, information sharing, trust, empowerment of employees, and team work. b. Innovativeness This culture is built based on external-flexibility orientation characterized by creativity, entrepreneurship, adaptability, and dynamism. c. Consistency This culture is built based on internal-control orientation characterized by order, rules and regulation, uniformity, and efficiency. d. Effectiveness This culture is built based on external-control orientation characterized by competitiveness, goal achievement, production, effectiveness, and benefit-oriented measures. Information security consists of three key aspects that are also called as information security triad, which comprises confidentiality, integrity, and availability [1]. Beside those aspects, information security can also include authenticity and non-repudiation [11]. Chang & Lin also added accountability to be another information security aspect [3]. Confidentiality of information means that an organization should protect its important, and its secret data and information from being accessed by unauthorized people. Availability aims to provide data and information for authorized people whenever needed by them. Integrity means that the data and information provided by organization should represent the real fact and condition. According to a research on Indonesian smartphone users in 2013, around 80% of respondents had information security breach experiences, such as SMS Spam, Call Spam, data lost, malware, etc. [12]. It showed that consumers of telecommunication provider also became targets of security threats. One way to get access to customer’s data is from customer service offices. The office gives many services to their customer like payment, complaint, or change of their service type. They have access to many data of the customers, such as personal data and billing. Therefore, information security in that office should be well considered, not only to protect company’s data but also to protect their consumers’. If there is any security breach caused by lack of security in that office, it can damage the reputation of the telecommunication provider. This research tried to find out the impact of organizational culture to the implementation of information security management by taking a case study in a customer service office of a telecommunication provider in Indonesia.
2.
Conceptual Framework
This research framework adapted Chang & Lin model [3] that investigated the relationship between the organizational culture, which is represented by its four characteristics, and information security management, which is represented by four dimensions. However, this research only inspected the relationship with three dimensions of information security called as information security triad. Not only researched the impact of organizational culture simultaneously to information security management, it also reviewed the relationship of the organizational culture dimension’s partially to each aspect of the information security triad. The research framework can be shown by Figure 1 below. Information Security Management
Organizational Culture
Cooperativeness
Confidentiality
Innovativeness
Integrity Consistency
Availability
Effectiveness
Figure 1. The Research Framework
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Impact of Organizational Culture on The Information Security Triad
From the framework, it can be defined four hypothesis: H1. Organizational culture significantly affect the information security management H2. Organizational culture significantly affect the confidentiality aspect H3. Organizational culture significantly affect the integrity aspect H4. Organizational culture significantly affect the availability aspect
3.
Research Methods and Data
This paper used a quantitative method to measure the effects of the organizational culture on the information security triad simultaneously and partially. It also used a descriptive approach to describe the organizational culture and information security management in the customer service office as a population to be observed. To prove four hypothesis above, the researchers used some variables that can be classified as independent variables and dependent variables. Independent variables are variables that can affect and explain other variables (dependent variable) [13]. In this research, independent variables were the organizational culture that consists of cooperativeness, innovativeness, consistency, and effectiveness. Meanwhile, dependent variables are variables that are affected, and can be explained by independent variables [13]. The information security management with its information security triad (confidentiality, integrity, availability) became dependent variables. Details of variable and sub variable of this research can be seen in Table 1. Those indicators were used as basic for composing the questionnaire. For measurement, the researchers used likert scale to define attitudes, opinions, and perceptions of a person or a group of people about social phenomena [14]. Variance of answers in questionnaire had four range, i.e. very agree, agree, disagree, and very disagree. All members of the office, as the place for the case study, became the samples of this research (census technique) because total of the population was less than 30 persons.
Table 1 Variable Operational Variable Organizational Culture
Information Security Management
Sub variable
Indicators
Number of Items
Cooperativeness
Cooperation, team work, trust, empowerment
5
Innovativeness
Dynamism and creativity
5
Consistency
Order, rules and regulation, efficiency
6
Effectiveness
Goal achievement, effectiveness
4
Confidentiality
Access right, secrecy, safety
5
Integrity
Back-up, database maintenance
3
Availability
Availability, control, resistance
2
TOTAL ITEMS IN QUESTIONNAIRE
30
Content validity describes the fitness of research instrument with what will be measured [13]. All items in the questionnaire had passed the validity test using SPSS 21 with the significant rate of 10% (r = 0.317). The questionnaire had also passed the reliability test that showed its consistency in measuring the same symptoms [15]. For this research, it would pass the test if Alpha Cronbach coefficient is more than 0.6. Using SPSS 21, this instrument had Alpha Cronbach coefficient of 0.88. It means that this questionnaire is reliable to be used for data collection. This research used two approaches in data analysis: a descriptive approach, and a statistical approach. A descriptive approach is used to describe respondents’ characteristics, the organizational culture, and the information security management implementation in the customer service office. Meanwhile, a statistical approach uses multiple linier regression
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analysis to measure the impact of the organizational culture on the information security management. The approaches were used because the model in this research had more than one independent variable, including of cooperativeness (X1), innovativeness (X2), consistency (X3), and effectiveness (X4). It can be shown in a mathematical model below. Y = a + b1X1 + b2 X2 +b3X3 +b4X4
+e
(1)
Y = Information security management showed by Confidentiality, Integrity, Availability a = constanta b1 = Regression coefficient for cooperativeness b2 = Regression coefficient for innovativeness b3 = Regression coefficient for concistency b4 = Regression coefficeint for effectiveness X1 = Cooperativeness variable X2 = Innovativeness variable X3 = Concistency variable X4 = Effectiveness variable e = error disturbances In this research, constanta will not be analysed because all variables use the same scale for the measurement (ordinal scale). 4.
Results and Discussion
The number of employees of the customer service office was 28 people. All of them became the respondents of this research. The characteristics of the respondents were described by gender, education background, and age. By gender, 43% were men and 57% were women. By education background, 11% were graduated from senior high schools, 36% were graduated from diplomas, and the rest of them (54%) were from graduate and under graduate schools. By age, most of them (50%) were in range of 26-35 years old, 36% were under 26 years old, and 14% were more than 35 years old. Each item of the questionnaire was grouped by its sub variables. To describe the answers from each sub variable, some categories based on continuum line were defined. Total of respondents were 28 people with the highest scale was four and the smallest scale was one. Then, it can be calculated that the highest cumulative score is 112 or 100%, and the smallest is 28 or 25% with the interval value for four group is 18.75%. Therefore we can get the category classification as shown in Table 2 below. Table 2. Category Classification No 1 2 3 4
Percentage 25 % - 43.75 % >43.75 % - 62.5 % >62.5 % - 81.25 % >81.25 % - 100 %
Category Very Weak Weak Strong Very Strong
4.1. Descriptive Analysis For the first step, all answers from the questionnaire were recapitulated based on its sub variables. Then, each sub variable was accumulated to get its total average and the percentage to define its category as shown in Table 2 above. The recapitulation of calculation for each sub variable can be seen in Table 3. From the results we can conclude that among those four type of culture, none of them were dominant in that customer service office. All of them were in “strong” category. The biggest value refers to cooperativeness (80%), which means that the office strongly implemented cooperation, team work, trust, and empowerment manners in their daily operation. Meanwhile the smallest value refers to effectiveness (78.8%), although it’s not too much different with other culture.
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Table 3. Descriptive for Each Sub variable Variable Organizational Culture
Information Security Management
Sub variable Cooperativeness Innovativeness Consistency Effectiveness Confidentiality Integrity Availability
Total Average 89.6 89.2 89 88.3 91.8 87.7 87.5
% 80 79.6 79.46 78.8 82 78.3 78.1
Category Strong Strong Strong Strong Very Strong Strong Strong
The information security management analysis gave different results. Confidentiality had the biggest value (82%) and “very strong” category. It means that the implementation of information security management in the customer service office strongly emphasized on the confidentiality aspect including management of access right, secrecy, and safety of information. The integrity and availability aspect of information were also strongly implemented by that office, although it was not as strong as the confidentiality aspect. It can be accepted, because generally the understanding of the most company about the information security is more dominant to protect confidential information of organization.
4.2. Multiple Linear Regression Analysis Before doing the regression analysis, some statistical assumption testing or well known as a classical assumption test need to be made. It consists of normality test, multicollinearity test, and heteroskidastity test. The normality test was performed using Kolmogorov-Smirnov test to observe whether or not the residual data were normally distributed. The result of normality test for all dependent variables had value more than 0.05 that was the level of significance for passing the test. It means that all data were normally distributed. To test the multicollinearity in this model, it was referred to the value of Variance Inflation Factor (VIF) and the value of tolerance for each independent variable. The results showed that the tolerance value were more than 0.1 and the VIF value were less than 10. It means that there was not any multicollinearity between the independent variables in the regression model. And the last, the heteroskidastity test used rank spearman test with a significance rate of 0.05. The result of that test showed that all variables had rank spearman values more than 0.05. It means there was not any heteroskidastity for the model. From the hypothesis, this paper would have four multiple linear regression models to explore the relationship between the organizational culture construction and the information security management in the customer service office. The model would be shown by the mathematical model number (2). H1 describes the regression model of the organizational culture on the information security management that can be seen in Table 4 below.
Table 4. Multiple Linear Regression for H1 Model
Unstandardized Coefficients
B (Constant) coop 1
inno conc effec
Standardized Coefficients
5.649
Std. Error 2.597
1.101
.340
.562
t
Sig.
Beta 2.175
.040
.640
3.239
.004
.391
.339
1.436
.164
.187
.280
.132
.667
.511
-.700
.489
-.339
-1.431
.166
Source: calculation results of SPSS 21 It can be shown in the mathematical equation below.
Y= 5.649+1.101X1+0.562X2+0.187X3+ (-0.700) X4+e
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H2 describes the regression model of the organizational culture on the confidentiality aspect that can be seen in Table 5 below. Table 5. Multiple Linear Regression for H2 Model
Unstandardized Coefficients B
1
Standardized Coefficients
(Constant)
-.357
Std. Error 1.391
coop inno conc effec
.575 .286 .135 -.322
.182 .209 .150 .262
t
Sig.
Beta .610 .315 .173 -.284
-.257
.800
3.158 1.364 .897 -1.228
.004 .186 .379 .232
Source: calculation results of SPSS 21 It can be shown in the mathematical equation below.
Y1 = -0.357+0.575X1+0.286X2+0.145X3+ (-0.322) X4+e
(3)
H3 describes the regression model of the organizational culture on the integrity aspect that can be seen in Table 6 below.
Table 6. Multiple Linear Regression for H3 Model
Unstandardized Coefficients
B -.054
Std. Error .430
coope
.361
.221
innov
.252
consis effecti
(Constant)
1
Standardized Coefficients
t
Sig.
Beta -.126
.901
.349
1.634
.116
.233
.269
1.081
.291
.309
.202
.314
1.529
.140
-.191
.222
-.204
-.861
.398
Source: calculation results of SPSS 21 It can be shown in the mathematical equation below.
Y2 = -0.054+0.361X1+0.252X2+0.309X3+ (-0.191) X4+e
(4)
H4 describes the regression model of the organizational culture on the availability aspect that can be seen in Table 7 below.
Table 7. Multiple Linear Regression for H4 Model
Unstandardized Coefficients
B
1
Standardized Coefficients
(Constant)
4.266
Std. Error 1.055
coop Inno Conc Effec
.300 .139 -.101 -.175
.138 .159 .114 .199
Sig.
Beta
.590 .284 -.241 -.286
Source: calculation results of SPSS 21
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t
4.045
.001
2.173 .874 -.889 -.879
.040 .391 .383 .388
Impact of Organizational Culture on The Information Security Triad
It can be shown in the mathematical equation below.
Y3 = 4.266+0.300X1+0.139X2+ (-0.101) X3+ (-0.175) X4+e
(5)
F-Test was conducted to explain whether sub variables of organizational culture (i.e. cooperativeness, innovativeness, consistency, and effectiveness) as independent variables simultaneously affect each sub variables from dependent variables. The result of F-Test using SPSS21 is shown in Table 8 below.
Table 8. Result of F-Test Regression Model Y Confidentiality Integrity Availability
F counting for each F Table P-value model 8.742 2.80 0.000 9.434 2.80 0.000 4.571 2.80 0.007 1.931 2.80 0.139 Source: calculation results of SPSS 21
Sig 0.05 0.05 0.05 0.05
Hypothesis is accepted if Fcounting > Ftable and p-value < Significance rate (5%). Therefore, for each model we will get result of hypothesis testing as below. The multiple linear regression model of the information security management variables (Y) had resulted Fcounting = 8.742 (more than 2.80) and p-value = 0.000 (less than 0.05). It can be concluded that H1 is accepted, which means that the organizational culture significantly affected the information security management implementation in that office. b) The multiple linear regression model of the confidentiality (Y1) had resulted Fcounting = 9.434 (more than 2.80) and p-value = 0.008 (less than 0.05). It can be concluded that H2 is accepted, which means that the organizational culture significantly affected the confidentiality aspect of the information security in that office. c) The multiple linear regression model of the integrity (Y2) had resulted Fcounting = 4.509 (more than 2.80) and pvalue = 0.008 (less than 0.05). It can be concluded that H3 is accepted, which means that the organizational culture significantly affected the integrity aspect of the information security in that office. d) The multiple linear regression model of the availability (Y3) had resulted in Fcounting = 1.931 (less than 2.80) and p-value = 0.139 (more than 0.05). It can be concluded that H4 is rejected, which means that the organizational culture did not significantly affect the availability aspect of the information security in that office.
a)
Determinant Coefficient (R2) measures how good all independent variables can explain variants of its dependent variables. The value of R2 from all regression model in this research can be showed in Table 9 below.
Table 9. Determinant Correlation Coefficient Analysis (R2)
R2
Information Security Management 0.603
Confidentiality
Integrity
0.621 0.443 Source: calculation results of SPSS 21
Availability 0.251
From Table 9, it can be explained that the information security management in the customer service office can be affected by 60% of its organizational culture. The rest of it (40%) consists of other variables that are not included in this research. Partially, the culture also has contribution of 62% to affect the confidentiality, 44% to affect the integrity, and 25% to affect the availability of the information security in that office. However, based on the F-Test result, the contribution of 25% did not significantly affect the availability aspect. The multiple regression model of this research can also be described in Figure 2 below.
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Information Security Management
Organizational Culture
Figure 2. The Multiple Linear Regression Model
5.
Conclusions
From the descriptive analysis above, we can conclude that the customer service office of the telecommunication provider, as a case study in this research, was not dominated by any of four types of those organizational culture. Nevertheless, the cooperativeness had the highest score among the other types, which meant that the cooperativeness was the strongest culture adapted in that office. Meanwhile, for the information security triad, the confidentiality was the most dominating aspect in the implementation of the information security management in the office. From the statistical analysis, all hypotheses in this research re accepted, except H4 that defined the relationship between the organizational culture and the availability as part of the information security management. It showed that only the availability aspect that was not significantly affected by the organizational culture, although simultaneously the culture significantly affected the information security management. For further research, a similar study can be conducted in other customer service offices in the same telecommunication provider to compare the result whether or not it will give the same relationship. Furthermore, it can also be done in the customer service office of different providers to observe the organizational culture and its impact on the information security triad. References [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] [15] [16]
Peltier, T. R., Information Security Fundamentals, Second Edition, Boca Raton: Taylor & Francis Group, LLC, 2014. Fan, I.S. and Alwi, N.H.N., “E-Learning and Information Security Management,” International Journal of Digital Society (IJDS), vol. 1, no. 2, pp. 148-156, June 2010. Chang, S. E. and Lin, C.-S., “Exploring Organizational Culture for Information Security Management,” Industrial Management & Data System, vol. 107, no. 3, pp. 438-458, 2007. Chang, S. E. and Ho, C. B., “Organizational Factors to The Effectiveness of Implementing Information Security Management,” Industrial Management & Data System, vol. 106, no. 3, pp. 345-361, 2006. Ifinedo, P., “Information Technology Security Management Concerns in Global Financial Services Institutions; Is National Culture a Differentiator?,” Information Management & Computer Security, vol. 17, no. 5, pp. 372-387, 2009. Schein, E. H., Organizational Culture and Leadership, San Francisco: Jossey Bass, 1992. Cushway, B., et.al, Perilaku dan Desain Organisasi (terjemahan), Jakarta: Elex Media Komputindo, 2000. Munandar, A. S., Buku Psikologi Industri dan Organisasi. Penerbit universitas indonesia (UI. Press), Jakarta, Jakarta: UI Press, 2008. Lee, S. k. J. and Yu, K., “Corporate Culture and Organizational Performance,” Journal of Managerial Psychology, vol. 19, no. 4, pp. 340 - 359, 2004. Claver, E., et.al, “The Performance of Information Systems Through Organizational Culture,” Information Technology & People, vol. 14, no. 3, pp. 247-260, 2001. Gordon, L. A. and Loeb, M. P., “The Economics of Information Security Investment,” ACM Transactions on Information & System Security, vol. 5, no. 4, pp. 438-457, November 2002. Sari, P. K. and Candiwan, “Measuring Information Security Awareness of Indonesian Smartphone Users,” TELKOMNIKA, vol. 12, no. 2, pp. 493-500, June 2014. Ferdinand, A. T., Metode Penelitian Manajemen: Pedoman Penelitian untuk Penulisan Skripsi, Tesis dan Disertasi, Semarang: BP Undip, 2006. Sugiyono, Metode Penelitian Kuantitatif Kualitatif dan R&D, Bandung: Alfabeta, 2012. Sekaran, U. and Bougie, R., Research Methods for Business: A Skill Buildin Approach, John Wiley & Sons, 2010. Mani, D., Choo, K.K.R., and Mubarak, S., “Information Security in the South Australian Real Estate Industry,” Information Management & Computer Security, vol. 22, no. 1, pp. 24-41, 2014.
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Learning Methodology: Sustainable City Development Strategy through Triple Helix Collaboration Muhammad Awaluddin Doctorate Program of Management and Business, Padjadjaran University Jl. Dipati Ukur No. 46, Bandung, Indonesia
Abstract Purpose: This paper explored the role of business and government in developing a sustainable city through Indonesia Digital Society (INDISO) program implementation in TELKOM. INDISO is a TELKOM initiative to enhance and optimize IDN capacity and capability for society interest and prosperity as the result of learning from problems faced by society (problem-based learning). INDISO covers multi programs of digital inclusion in optimizing broadband infrastructure for government, public, and private sector and the programs are also done by accommodating local initiatives in line with implementation of digital city concept. Design/Methodology/Approach: The research done by measuring and mapping the use and utilization of ICT was based on 4 aspects (initiative, leadership, usage and benefits) for 5 parties in each city/county (government, educational institutions, healthcare, SMEs and the public). The four aspects consisted of initiative: short and long term planning of the ICT of every city/county; leadership: implementation of the ICT planning of the city/county; usage: connectivity, ICT penetration, content application, usage of application/ software, and behavior of the usage of the ICT by related parties; and results: benefits entrusted as by related parties. Survey was divided into two groups in each category of government and society overalls, namely city and county groups. Survey to local governments which consisted of 226 local governments including 70 cities and 156 counties was conducted based on questionnaire. Respondents from public sectors in 110 cities surveyed were elected through Computer Aided Telephony Interview (CATI). Overall society categories were judged by charging questionnaire survey coupled with CATI and conducted in four parties (educational institutions, healthcare institutions, private SMEs, and communities) in 110 cities and counties. The survey involved 19,000 respondents. Findings: The development of ICT infrastructure; including the internet and applications had significant impact on the improvement of quality of life, on the improvement of science and economic growth, on the operations of government, and on the improvement of access to public information. © 2014 Muhammad Awaluddin. Published by Telkom Pub. Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia. Keywords: ICT, sustainable city, problem-based learning, Indonesia Digital Network, Indonesia Digital Society, digital inclusion.
1. Challenges Faced by The Cities A city can be defined as one form of the most complete society node, which spans from home, neighborhood up to district. It comprises people, infrastructure and process. Currently, cities have become the focal point of economic strategies and development policies triggered by the global trend of increasing urbanization. Cities drive wealth creation more in the future (Hafedh Chourabi, 2012) [1]. Some cities like Jakarta and Seoul account for more than 50% of the country’s GDP. This situation implies and provides opportunities for the cities to have high economic power in hub and spoke business model. Some of major challenges faced by the cities are (Michael Batty, 2012) [2]: • Unemployment that leads to increase crime, so that economic growth and building a resilience becomes a priority for the city authorities;
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• The rise of urban populations that put pressure on housing and transport facilities; • Incremental traffic, fuel usage and air pollution that warn the city to improve energy efficiency, reduce carbon emissions, and promote energy resilience; • The way to maintain service levels for back office and front line using online service delivery by enabling new services and helping citizens to decide their activities by using information provided, e.g. providing real-time information on traffic to assist citizens in planning their journeys;
Fig. 1. Smarter, more Competitive Cities, IBM (2013) [3]
The complexity and the pace of change combined with the need for integrated solutions present a major challenge to local authorities that traditionally have developed responses in a “silo-ed” fashion. For Indonesia, the challenge also comes from United Nations e-Government Survey 2012 [4] as a factor for digital city implementation. Indonesia is ranked at the position of 97, which is considered lagging behind other ASEAN countries except Myanmar, Timor Leste, and Cambodia.
2. Benchmark on Digital City Ecosystem Development European Countries have responded to the city challenge by aiming strategies to boost EU economy through sustainable growth with five ambitious targets: the enhancement of employment, innovation, education, social inclusion, and climate/energy. To support the concept of “digital cities”, the European Commission has developed programs to support projects in European cities with ad hoc funding, credit lines, and even adoption of a bottom-up approach. Some leading cities in the world have also applied various approaches in reaching the digital city status (Department for Business Innovation and Skills-UK, 2013) [5]. Some of initiatives are:
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Learning Methodology: Sustainable City Development Strategy through Triple Helix Collaboration Table 1. Leading Digital City Rio de Jainero Stockholm
Impact
Select Project
Investment
Overview
Hongkong
Boston
Significant digital city investments through ICT strategy
Public private Partnerships used to fund infrastructure projects and stimulate private sector growth
€70 Mn investment in digital city technology projects across city departments to support novel projects
Collaboration with innovative companies, SMEs and city departments to improve city services
Focuses on economic development through facilitating the digital economy, which aim to create world-class e-governance services EIM E-government Gov Wifi Open Data
Creates center of operations supports for city’s response to natural disasters, and facilitate cross-disciplinary working across agencies
Uses public databases and individual departments, and creates digital city proposals, which are funded based on a costbenefit analysis
Adopts a top-down and bottom-up models for innovation, with particular attention on good communication internally and with other cities
Center of Operations Open Data
E-government Stokab Fibre Network Kista Science City
Participatory Urbanism Clicks and Bricks 21st century learning
Implements various digitization initiatives for government processes and application
Facilitates economy by providing private sector with information about the city
Recoups returns from costreduction through efficiency that the project is created
Highly engages in interactions within the communities both inside and outside the organization
3. Some Concepts of Digital City Frost & Sullivan (2012) have defined digital cities as cities built on “intelligent” technology solutions that lead to the adoption of at least 5 out of the 8 digital parameters i.e.: Smart Energy, Smart Building, Smart Citizen, Smart Technology, Smart Healthcare, Smart Mobility, Smart Infrastructure and Smart Governance [6]. On the other hand, a sustainable city is defined as the city that is built on eco-friendly bases. These may not necessarily include “intelligent” systems, but the city is built more on an energy-efficient or environment-friendly objectives.
Digital Energy Digital Grid, Digital Meter, Intelligent Energy Storage Digital Technology Broadband penetrasion over 80% Location based service Digital Government e-Government e-education Disaster recovery solution
Table 2. 8 digital parameters Digital Building Automated Intelligent Building (HVAC, Lighting) Digital Infrastructure Sensor network Water & Waste Management Digital Citizen Green mobility Lifestyle choice
Digital Mobility Low emission mobility, Mobility solution, multimodal transport Digital Healthcare E-Health and M-Health Intelligent medical device
Andrew Milroy in Frost & Sullivan (2014) also introduced some models. The first is the model of connected living, which described a world in which consumers use many different devices to experience integration of video, voice, and data services to provide access and ubiquitous connectivity anytime and anywhere [7][8]. The second is connected home that is defined as a residential environment embedded with computing and information technology which anticipates and responds to the needs of the occupants, working to promote their comfort, convenience, security and entertainment. The third is connected workplace that provides a model on how individuals work using enterprise communication, mobile working, and enterprise social networking. The last is connected city, providing typical connected work services and solutions for citizens in key segment (governance, banking, transportation, and education).
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Fig. 2. Connected living model
There are five key aspects of digital city approaches, which are information driven (Ruthbea Yesner Clarke, 2013) [9]: a) Modern digital infrastructure, combined with a secure but open access approach to public re-useable data, which enables citizens to access the information when they need it; b) A recognition that service delivery is improved to become citizen centric: this involves placing the citizen’s needs at the forefront, sharing management information to provide coherent service rather than operating in a multiplicity of service silos, and offering internet service delivery where possible compared with face to face mode; c)
Intelligent and digital physical infrastructure (Internet of Things) enable service providers to use the full range of data both to manage service delivery on a daily basis and to inform strategic investment in the city/community (for example, gathering and analyzing data on whether public transport is adequate to cope with rush hour peaks);
d) Openness to learn from others and experiment with new approaches and new business models; and e)
Transparency of outcomes/performance, for example, the provision of city service dashboards to enable citizens to compare and challenge performance.
4. The Role of Business & Government In Developing A Digital City Learning from problems faced in the past, understanding about sustainable city development has come through long and intricate ways. Problems and potential of sustainable city development has become comprehensive discussions among stakeholders, including: academia, business, and government. Problem-Based Learning (PBL) used to formulate solutions to develop a sustainable city needs a long time indeed; moreover, it habitually widens the focus of the discussions (Schmidt, Rotgans, Yew, 2011) [10]. PBL approach has advantages to formulate solutions; In addition, the approach can accommodate all points of view and opinion, and it also can grab an active role from all stakeholders whilst locking their commitment to solving problems (Hmelo-Silver, 2004) [11]. A digital city is a solution to achieve sustainable and balanced development of urban, which represents opportunities for different business and service providers. Moreover, there are high financial and cultural barriers to the development of the digital city. To overcome these barriers, business institutions and government need to encourage partnerships and develop a “framework” in order to align interests and encourage models of open collaboration between all stakeholders, including identification of appropriate financing structures to support such development. The key attribute for a digital city -the most critical criterion- is leadership. Government has to have a clear and consistent vision of what the future city offers to its people with a commitment to deliver the necessary change. A vision is developed by consulting it with citizens and creating attractive environment for business across the city, so that the quality of life is enhanced by anticipating and meeting their needs. . A digital City model should have a citizen centric approach, involving closer interaction between citizens and any service providers (AT. Kearney, 2014) [12].
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Fig. 3. Citizen Centric Approach
There are two kinds of stakeholders involved in the digital city development: direct and indirect stakeholders. Direct stakeholders consist of city authorities, business and citizens. City authorities have significant roles in planning and executing governance system to provide access to any facility and to promote the economic growth. On the other hand, indirect stakeholders such as technology and application providers and system integrator and service providers perform as enablers that create digital platform, infrastructure, interface, and operator.
Fig. 4. Stakeholder Involvement
Using this approach, every stakeholder collaborates to deliver service to others according to its function and role. TELKOM has a unique approach called “ABG Triple Helix” to collaborate with academic institutions, business players and government parties in delivering the digital city business model. The role of academic institutions is in the development of human resources, entrepreneurship, science, innovation, and results of research prototype.
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Fig. 5. ABG Triple Helix Model
Business/industry players have significant roles in creating ecosystems and sustainability of industrial development in cooperation with the university in the development of knowledge, new business, and industrial development through internal innovation capabilities, and national; and international partnerships. The government has special roles in facilitating the development of knowledge through research and innovation incentives, the development of products, and the regulation in marketing of local products. In addition, triple helix also involves community as users of the products yielded driving the development of knowledge and innovation, and creating ecosystem together with the government, university and industry. In this case, the community has a role as an accelerator.
5. INDONESIA DIGITAL NETWORK (IDN) The Coordinating Ministry for Economic Affairs of Republic of Indonesia has set a development framework formulated in The Master plan Acceleration and Expansion for Indonesia Economic Development (MP3EI), whose goal is to create an independent , progressive, just and prosperous Indonesian society by encouraging the establishment of high economic growth; and a balanced, equitable, and sustainable country that will position the country to be the top ten countries in the world in 2025 and the world’s sixth economies in 2050. As stated by President of Republic of Indonesia, Susilo Bambang Yudhoyono, the spirit behind MP3EI is breakthrough (not “business as usual”) and the key words are acceleration and expansion. Chairul Tanjung, the chairman of KEN, conveyed the Vision of Indonesia in 2030 called the Four Pillars for the Vision of Indonesia in 2030 namely: sustainable management of natural resources, encouraging Indonesia to become the Top 5 world economic power with per capita income reaching $18,000/year, embodiment of more evenly the quality of modern life and to make at least 30 Indonesian companies included in Fortune 500. The economic development is going to be successful if there is collaboration among central government, local governments, state enterprises, and private enterprises (in the spirit of Indonesia Incorporated). TELKOM as the sole nation’s flag carrier in TIMES (Telecommunication, Information, Media, Edutainment and Services) industry in Indonesia has a passion to provide the best for Indonesia and to support the success of the government's efforts to encourage the MP3EI with infrastructure development across the Indonesian region by developing Indonesia Digital Network (IDN) as a masterpiece for the nation. The availability of telecommunication infrastructure, especially broadband services infrastructure is one of economic development drivers. A World Bank study (Qiang & Rossotto, 2009) [13] showed that every increase of 10% in broadband penetration would result in economic improvement by 1.38%. Another research concluded broadband has contributed to the GDP growth along with the following parameters: 1 percentage point in broadband penetration can generate 0.0178 percentage points in GDP growth. Similarly, broadband contributes to the creation of jobs: 1 percentage point increase in the broadband penetration results in an increase of 0.18 points in the occupation rate (Raúl L. Katz, 2010) [14]. However, stakeholders have to realize, the success in broadband policies should be measured in terms of the wellbeing of society, and should not be in terms of the relative positions of raw subscription counts (T. Randolph Beard, 2009)[15].
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The economic impact varies by region indicating that broadband deployment needs to be carefully coordinated with the economic development policies (training, firm relocation, etc.) to maximize the impact. Broadband policies are critical to maximize the economic impact of technology such as: national broadband plans, competition policies, demand stimulation, alignment of taxation with development and technology objectives (Raúl L. Katz, 2010) [16]. At a low level of broadband development, broadband access should be guaranteed in the most important points in urban areas (universities, public libraries, large companies). If possible, these points should be equipped with access to the fiber-optic infrastructure, in order to remain on par with the most advanced regions of the world (Martin Fornefeld, 2008)[17]. To fulfill the needs of connectivity solutions, TELKOM has taken an active role in the development of broadband through Indonesia Digital Network 2015. IDN is a dedication coming from TELKOM to build a better life and increase national productivity. IDN 2015 is a TELKOM vision to develop true end-to-end user broadband infrastructure development (user terminal, access, transport and services) that was born from a noble intention to provide a strong foundation for the advancement of the nation especially in terms of equitable access and the improvement of the quality and capacity of broadband infrastructure throughout Indonesia. In the context of mega solution, TELKOM offers true broadband network for Indonesia on par with other nations (Australia with National Broadband Network, Malaysia with Multimedia Super Corridor). The IDN 2015 program has three major components (TELKOM, 2013) [18], namely:  

Id-Access is an access network infrastructure development in the direction of the customer via a high speed broadband optical fiber networks and Wi-Fi. Through Id-Access, Telkom is committed to supporting MP3EI by providing broadband accesses to 15 million homes pass and one million Wi-Fi___33 accesses. Id-Ring transports infrastructure networks development towards IP- Based, and 75,000 km fiber optic backbone network infrastructure to create a convergent service across the country. The initiative of Id-Ring can be seen from the contribution of Telkom to the government’s project “Palapa Ring” to connect fiber optic-based backbone networks to Eastern part of Indonesia (Papua and Maluku). Id-Convergence develops nodes service network infrastructure into an integrated, next Generation Network, NGN for multi-screen and multi-service. This is an innovation of Telkom to actualize the digital era in many sectors including Indonesia Digital Society (INDISO) and Indonesia Digital Ecosystem (INDICO). INDISO is a TELKOM initiative to provide communication services and access for communities such as government, entrepreneur, education and community through Indonesia Digital Government (INDIGOV), Indonesia Digital Entrepreneur (INDIPRENEUR), and Indonesia Digital School (INDISCHOOL) respectively. INDICO is a part of the ID Convergence which deploys the infrastructure through B2B ecosystem, managed application services, managed IT services, and value added services.
IDN is in line with the idea of MP3EI to create the acceleration of economic improvement, penetration of broadband services and educational foundations of the nation through excellent infrastructure. Furthermore it is expected to improve the image of Indonesia in the international eyes as the island nation that is capable of doing broadband penetration. The results of ICT infrastructure development program become once again a major supporter for Telkom in running a business based on present and future needs. IDN 2015 is expected to be one of the masterpieces of TELKOM. In addition to encourage innovation, improve labor productivity, and enhance regional competitiveness, the deployment of Palapa Ring Submarine Cable System also opens a variety of possibilities to accelerate development in eastern part of Indonesia. The backbone network is expected to increase the number of access to broadband networks and to provide more efficient communication for public sector and government, including military, police, meteorology, and crisis prevention (John E. Goeres, 2013)[19]. The existence of Palapa Ring Submarine Cable System can also reduce the cost of communication as well as encourage the use of broadband access. The benefits of the deployment of information and communication technology infrastructure in eastern Indonesia among others are:  Improving the welfare of the community, including eradication of poverty and inequality, and improving the quality of life in the community.  Filling the gap of the digital divide between urban and rural areas, 'the haves' and 'the have nots ', the western and eastern regions of Indonesia.  Bridging politics and culture gap, and increasing harmony among people.
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6. INDONESIA DIGITAL SOCIETY (INDISO) In the Id-Convergence program, TELKOM provides convergence services that utilize the capability of network for entire stakeholders in the nation. To accelerate the Id-Convergence, it is necessary to embrace a differentiated go-to-market to offer a broader portfolio of solutions and products, and to facilitate the adoption of new business models of funding. The objectives of INDISO can be described in mega thinking scale to support MP3EI implementation by enhancing value of national Industries and supporting better quality of life. In macro scope, INDISO is expected to enhance public services, to enable agility & productivity in business, and to improve livable city for people. With INDISO, TELKOM plays a significant role in guiding the public administration, businesses and citizens into the path of digitization, efficiency, and development of the urban context. TELKOM focuses on certain specific areas of digital city applications (TELKOM, 2014) [20]:
Sectors Government
Public
Private
Table 3. Area of Digital City Program INDIGOV Provides broadband infrastructure and cloud-based solutions in the government for the improvement of public services. In 2013 it has already surveyed 2500 of local government institution sites from 404 Cities and delivering 12.887 Gbps bandwidth connectivity. INDIHEALTH Provides broadband infrastructure and cloud-based solutions for healthcare institutions to improve services. INDISCHOOL Provides wifi internet services for students at 100K schools throughout Indonesia INDICAMPUS Provides broadband facilities at universities throughout Indonesia. INDIFINANCE Provides convenience for the community in microfinance transactions INDIPRENEUR Provides a digital platform for 100K Indonesian SMEs to be able do business online INDITOURISM Provides broadband infrastructure and cloud-based solutions for institutions to increase the potential of Indonesian tourism
7. INDONESIA DIGITAL SOCIETY AWARD (IDSA) Telkom as the biggest TIMES service provider and the prime mover of ICT implementation in the country is trying to become a business institution that stands at the forefront of digital creative development. Information and Communication Technology (ICT) can facilitate the involvement of citizens to be more selfresponsible. In contrast, it can also become a barrier if they cannot easily and effectively use it to meet their needs (M. Ianculescu, 2011) [21]. A lack of understanding of the causal factors leads digital engagement to reduce social exclusion. This study has confirmed that high quality access, digital skills and a positive disposition towards ICTs facilitate disadvantaged basic engagement with ICTs among groups. However, it is not possible to use the survey data available for this study to demonstrate that digital engagement subsequently improves an individual’s social situation. For evidence of this evaluation studies of specific interventions are required. One of the initiatives is to support TELKOM together with the Ministry of Communications and Information Technology and The Ministry of Internal Affair to become co-originators of Indonesia Digital Society Award (IDSA) IDSA is a prestigious award for cities /counties regarding the implementation and development of ICT in government, educational institutions, health, Small-Medium Enterprises (SMEs) and the public service. Digital inclusion cannot be separated from economic and social inclusion, and it will become a major factor in assisting (or losing) social and economic justice (Don Perlgut, 2011) [22]. IDSA can be utilized as a vehicle to push digital inclusion, and at the end it can improve welfare in Indonesia. Bradbrook and Fisher (2004) advocate the ‘5 Cs’ of digital inclusion: connectivity (access), capability (skill), content, confidence (self-efficacy) and continuity [23]. The latter, continuity not only is the technology widely available. It became a
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part of such an ingrained part of everyday life that is more difficult to see the ‘digital world’ separately from the ‘real world’. IDSA initiative refers to what has been done by Malaysian government. Since fourteen years ago, Malaysia has been doing a similar event with IDSA, not only at national level but also at international level. In 2001 and 2002, Malaysia was the host and originator of the APICTA (Asia Pacific Information and Communications Technology Award), a prestigious annual event for assessment and use of information and communication technology development among countries in Asia Pacific. This activity continues to take place every year. Now, Malaysia has organized more specific annual event such as the Cyber Security Malaysia Awards, Conference and Exhibition (CSM-ACE).
7.1. Objectives The IDSA event objectives are as follows:  Increase the awareness of the city/county regarding the importance of ICT in public services.  Appreciate government, educational institutions, healthcare, SMEs and the public related to the use and utilization of ICT.  Encourage the use of ICT by the government in serving the public, and improving the competitiveness of the city/county in the era of globalization, communication and information; and also encourage community to use ICT in improving their quality of life. IDSA mission is to make Indonesia better. The purpose of IDSA can be described in 3 level of thinking (Roger Kauffman, 2003) [24] as follows: Mega: From Indonesia to digital society of Southeast Asia (Region). Macro: Creating ten world class digital institutions (government, education, health, SME, community). Micro: Creating a double digit growth in terms of enablement (internet penetration), engagement (internet usage) and economy (internet transactions).
7.2. Methodology Problem-based learning was the main approach used in IDSA to formulate solutions to develop a sustainable city, particularly in an area related with ICT utilization in public service by government. IDSA activities included research that measure and map the use and the utilization of ICT based on 4 aspects (initiative, leadership, usage and benefits) for 5 parties in each city/county (government, educational institutions, healthcare, SMEs and the public). In detail the four aspects consisted of:  Initiative: short and long term planning of the ICT of every city/county.  Leadership: implementation of ICT planning of the city/county.  Usage: connectivity, ICT penetration, content application, usage of application/ software, and behavior of the usage of ICT by related parties.  Results: benefits entrusted by related parties. The awards were divided into two groups in each category of government and society overalls, namely city and county groups. Survey to local governments was done based on questionnaire that should be answered and returned to the IDSA committee. A total of 226 local governments consisted of 70 cities and 156 counties filled the questionnaire via selfassessment. Respondents from public sectors in 110 cities surveyed were elected through CATI (Computer Aided Telephony Interview). Judging process was carried out in two phases: the early stages of judging were to determine the finalists, and the second phase was to determine the order of the winners. The fundamental difference of IDSA compared to another survey of local governments was the emergence of society's overall category. In this category, the survey measured the impact felt by four parties (educational institutions, health care institutions, private SMEs, and public institution), and the implementation of the digitization initiative undertaken by the city/county. Overall society categories were judged by charging questionnaire survey coupled with CATI, and conducted on the four parties (educational institutions, healthcare institutions, private SMEs, and public institution) in 110 cities and counties. The survey involved 19,000 respondents. The finalists from each city/county groups from each category were invited to present their achievements in the area of ICT, and judged by an independent jury. There are five finalists from each city and county groups based on index of the five highest on the survey results for each category.
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7.3. Result There are 20 finalists and winners as a result for the 2014 IDSA in each category of government and overall society either at the level of the city or county. Table 4. IDSA Result City Surabaya Bogor Yogyakarta Denpasar Cimahi County Sleman Lamongan Banyumas Kutai Timur Banyu Asin
Category : Goverment Rank 1 2 3 4 5 Rank 1 2 3 4 5
Award Level Platinum Gold Gold Silver Silver Award Level Platinum Gold Gold Silver Silver
City Banda Aceh Sukabumi Blikpapan Makasar Bukittinggi County Banyuwangi Gresik Agam Bantul Badung
Category : Overall Society Rank 1 2 3 4 5 Rank 1 2 3 4 5
Award Level Platinum Gold Gold Silver Silver Award Level Platinum Gold Gold Silver Silver
7.4. Insight from IDSA Research IDSA certainly will not necessarily change the country's competitiveness instantly. It needs more real and thorough actions so that our country is getting ready to face globalization that has been in the eyelid. From the IDSA Research, TELKOM gains some remark conclusions as follows (TELKOM, 2014) [25]:  Optimal utilization of ICT depended on the leadership initiative from Regional Head.  Most applications were used following the examples from the central government policy such as: LPSE, Fiscal Management Information System (SIPKD).  Applications used by the city local government offices were still not integrated )  Most of the utilization of ICT was to simply the public services (online complaint handling system), to ease the finding of information (citizen information websites), and to increase knowledge through the internet (digital village). Some key findings resulted from the research are:  In the development of ICT in government of level II regions, from 226 cities surveyed, there were still 38, 9% of government’s authorities that did not have plans and frameworks to establish policies on ICT.  While being able to function in the planning and implementation of ICT, 70% of the cities were still incorporated in other units that have other functions in addition to ICT management. Only 30% had a permanent and separate unit for ICT development.  70% of local governments had already had the outreach of ICT programs and education as well as routine monitoring and evaluation; and those were well documented.  75% of local governments had performed the socialization of the importance and benefits of the internet to their community.  The main activities performed by employees in the office of the cities /counties when they were using the internet were browsing (90%) and communication (85%).  Most local governments (72%) had claimed to digitally manage documents and also had server ownership.  48% of the cities/counties had already had an integrated service that can monitor and control the public facilities through the sensors, CCTV cameras.  90% of the respondents believed that development of ICT infrastructure; including the internet and applications have significant impact on improving the quality of life.  92% of the respondents believed that the development of ICT infrastructure; including internet and applications had an impact on the improvement of science and economic growth.  89% of the respondents believed that ICT had a significant impact on the operations of government and the improvement of access to public information. Telkom provided some incentives for the IDSA 2014 winners by allocating its budget to be disbursed in term of:  Infrastructure development through the development of broadband access facilities for government and public facility (Wi-Fi).  Provision of content and apps to enhance the government services.  Capacity development programs through benchmark, seminar, and training  Community development programs by providing Broadband Learning Center and Creative Camp facility establishment to enhance local creative industries.
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The IDSA winners were encouraged to become the center of excellence and a role model for other cities to reduce digital divide by using Information and Communication Technology.
8. Summary This paper studied the role of the government and business in developing digital and sustainable cities in some perspectives in order to formulate solutions for the development of sustainable cities using problem-based learning approach. The study explored the implementation of INDISO (Indonesia Digital Society) that employs a model of digital city in utilizing broadband and digital technology for the government, public, and private/business sector. INDISO was also in the forefront of digital city implementation by establishing research and awarding cities that had implemented ICT successfully through Indonesia Digital Society Award (IDSA). The success of a digital and sustainable city will depend on three main elements: innovation, leadership, and collaboration. There are some recommendations for the government/city to create a special digital city consortium comprises of government bureaucrats, service providers, key decision makers, and thought-leaders to make decision for digital city initiatives. The government should encourage open collaborations by making information from public systems open and accessible to citizens and businesses to foster innovation in new services. The government should also look for creative business models to make alternatives in funding such projects to make it sustainable. Business sectors should become strategic partners for the government and choose each role specifically in the ecosystem. Shared services and big data analytics based on cloud services on digital city management should be shared between local authorities and other public sector agencies. The exploration of firm new business models could participate in the governance of cities and become a supplementary part for the government. TELKOM through Indonesia Digital Network (IDN) invests both physical and social infrastructure to support digital inclusion in Indonesia.
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Twitter Campaign and How Commercial Blogs are Useful for Community Marketing in Indonesia M. Pradanaa, A. Pangarsoa a
Faculty of Business and Communication, Telkom University Jl. Telekomunikasi Terusan Buah Batu, Bandung 40257, Indonesia
Abstracts Indonesia is currently recognized as one of the countries in the world with most social media users. The business world sees this opportunity by combining the use of both blog and social media. A lot of companies introduce their products to society by organizing campaigns of citizen journalism in order to create buzz on their products. A number of so called celeb-tweets (Twitter users and bloggers who are normal citizens but have a large number of readers or followers) is paid as endorsers to review the newly launched products and introduces them to their followers. This paper is intended to analyze social media strategies under the 4C’s principles: connection, creation, consumption, and control. These principles are the consumer’s motivations that lead to the companies’ return on investments (ROI), which is measured by active participations from the online society.
© 2014 M. Pradana A. Pangarso. Published by Telkom Pub. Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia. Keywords: online marketing, word-of-mouth, marketing mix, communication
1. Introduction Within the last decade, the popularity and the number of users of social networking platforms such as Facebook, Twitter, Youtube and Google+ are rising. Twitter itself rapidly has gained worldwide popularity with over 500 million registered users as of 2012, generating over 340 million posts everyday, which are known as tweets [1]. In the business world, the interest in social media use is also growing. Now, the tendency is that there has been a shift in consumer’s role, from being passive recipients of information to active generators of information [2]. Therefore, social media is a common marketing tool used by companies nowadays. By taking traditional forms of marketing and improving them with social networking, a successful marketing strategy can be successful if it is rightly done, which ultimately results in an increase of clientele, brand awareness, and revenue [3]. Social media efforts are developed under the 4C’s principles: connection, creation, consumption, and control. These principles are the consumer’s motivations that lead to the companies’ return on investments (ROI), which is measured by active participations such as social media comments, review, share, or recommendations [4]. As of the middle of 2012, Indonesia is recognized as the 4th country with the most social media users [5]. Looking at this potential, lots of industries in Indonesia are utilizing social media platforms in their businesses. They use social media, blogs, and other platforms in order to touch wider customers or merely to advertise their products, other than the conventional advertisements they have been doing in televisions, newspapers, and other traditional media. This paper is intended to analyze the use of these platforms and find out whether it will be effective according to some marketing literatures. Nowadays, the role of social media has been growing in significance. The social media can be said as group of Internetbased applications that build on the ideological and technological foundations of Web 2.0 allowing the creation and exchange of user-generated content [6]. Corporate decision makers try to identify ways in which firms can make profitable use of various social media applications, such as YouTube, Facebook, Instagram, Path and Twitter. Social media is preferred as powerful marketing tool because it can reach wide range of people and enable the companies to directly interact with their customers, next to a fundamental reason that social media is less costly than any traditional marketing
* Corresponding author. Tel.: +62-821-93187891 E-mail address: [email protected]
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activities [7]. It also offers better market monitoring, companies can gather information about what kinds of new product are popular among the customers, which in the end will enable the spreading of word-of-mouth (WOM). Also, with social media platforms, companies can establish relationship with other media, such as advertising agency, magazine and newspapers, because most of them also use social media platforms nowadays. However, companies cannot do much since their social network activities are dependant to the social media provider, which leads to more risks of negative feedback getting out of control [8]. Social media industry can be used in establishing trends, reporting news and opinion, and generating buzz. Through social media, publishers can monitor trends, and ‘listen’ conversations online about their products [9]. Indonesia is one of the countries with the most social media users. Facebook, for example, has not had an office in Indonesia, yet it has grown very rapidly. Nowadays there are over 30 million Facebook users in the country. The reason behind the vastly growing number of users in Indonesia, besides the country’s large population, is because people love publicity, do not fret much about privacy and gleefully follow trends [10]. Hence, it is important to see how Indonesia makes the most use of the social media platforms in business. Nowadays, companies exist on several social media platforms, for example, Twitter, company blogs, and mobile phone social media platforms. After knowing effective social media strategies of each company, it is important to know what are the opportunities and limitations of using social media platforms in publishing business. The discussion of this paper is constructed based on literature review toward the existing literatures about the same topics. Findings and further development on discussions are explained on the hindmost part of the paper. 2.
Literature Review
This is the part where we discuss social media functions, the motives along with the opportunities and risks of using social media for marketing activities based on what has been stated in the existing literatures. As a set of activities, marketing is a process for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society in general. Furthermore, according to Kotler, marketing is the set of human activities directed at facilitating and consummating exchanges [11]. Therefore, we can say that marketing is ‘the art of communicating‘ products to the customers besides seeling them. Formal approach of traditional marketing is known as 4 (four) Ps, which are the goods that become the core of the business (Product), the way of delivering information about the product (Promotion), the value concept of the product (Price), and the access to the product (Place) [12]. As time changes, the concept has been developed into a new 7P. Seven (7) Ps is an additional marketing model that refers to the already mentioned four Ps. The three additional points are ‘Physical evidence', which includes elements within the store -- the store front, the uniforms employees wear, signboards, etc., 'People', which consists of the employees of the organization with whom customers come into contact, and the last one, 'Process', which is the whole activities and systems within the organization that affects its marketing process. In the digital era like nowadays, technologies have provided all those elements online, even without direct or face-to-face contact. It has been mentioned above that technology nowadays enables us to do any marketing with the help of internet. Therefore, the world recognizes a new concept of marketing, which is online marketing. Online marketing gains advantages in using internet sources in order to get in touch with customers. Online marketing has its strength in rapid delivery of data and information between the people involved [13]. According to Schradi (2009), there are two ways of conducting online marketing: passive and active. Using passive online marketing means a company builds a website which provides the information to customers without doing any significant activities to reach out the customers. On the other hand, active online marketing does the otherwise, the company tries to reach potential buyers on the internet. Schradi argues that active online marketing is somehow more useful because there is an aspect of customer loyalty where customers need incentives to visit the web page more than once, for example with news, forum, services, blogs, raffles and many other possibilities [14]. We can add some more to those incentives, such as online games, quizzes, trivia, etc. By taking the advantages of the internet technologies, or widely known as ‘Web 2.0‘, companies are using social networking sites to promote and relay information about their brands (Kaplan & Haenlein, 2012). Therefore, online marketing is a new form of the traditional marketing mix (7Ps) that we have discussed before. Online marketing is a hybrid element of the marketing mix because in a traditional sense it enables companies to talk to their customers, while in a nontraditional sense it enables customers to talk directly to one another [15]. These days, online marketing becomes priority for companies because they can get immediate updates and reach wide range of customers. Social Media is a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and allow the creation and exchange of User Generated Content [6].“ An overview of the launch dates ranging from 1997 up to 2006 can be seen in the figure below.
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Figure 1: The Development of Social Media through the Years [16]
Nowadays, with the development of smartphones and portable computers, social media applications and platforms can be accessed everywhere and at any time. Social media nowadays offers a handful of variations, which are designed for different purposes. The table below shows the types of social media platforms and applications according to their purposes. Purposes Private Networking Professional Networking Diary / Journal Photos Videos Hobby
Platform Social media, Myspace, Google+ LinkedIn Blog, Twitter, Path Flickr, Instagram Youtube, Vine, Vimeo Goodreads, Fantasy Football
Table 1: Social Media Platforms According to Their Purposes
Boyd and Ellison (2007) define social network platforms as web-based social media applications that enable the creation and maintenance of relationships (networking) [16]. Every human is believed to already have their own networks and circles of friends, so social platforms only facilitate in connecting and making them bigger. Kaplan and Haenlein divided six different types of social media platforms: collaborative projects (for example, Wikipedia), blogs and microblogs (for example, Twitter), content communities (for example, YouTube and DailyMotion), social networking sites (for example, Facebook), virtual game worlds (e.g., World of Warcraft, Fantasy Football), and virtual social worlds (e.g. Second Life) [6]. According to Kaplan and Haenlein (2010), a segmentation of the market can be undertaken, in order to differentiate existing platforms from another. The platforms are differentiated between social presence and the degree of self presentation. According to Shao (2009), people use social media because of three motives. The first one is because they want to consume information and entertainment. The second motive is to participate in social interaction and community development, and the last one is to produce self-expression and self-actualization. Self-representation is the motive that is underlined by most experts. Users obtain self-representation from the utility of the network, and they can also gather information, expand network, and spread their influences in peer group [18]. Foster (2010) argues that social media assures someone’s participation in social communities by reserving his membership inside the community by providing connections while at the same time maintains value of the user’s privacy [19]. We can see that most features in social media are designed for entertainment, self-expression, and connection of people. Kim, Sohn and Choi (2011) investigate in their study how cultural contexts shape the use of communication technology by examining the motives for and the patterns of using social network sites [20]. They argue that the social media avidity might differ in different countries, according to the characteristics of the culture of the countries. People in a collectivistic society, for example in Asian countries such as India and Indonesia, are more dependant to social media than those who live in individualistic oriented societies (Hofstede, 2001) [21]. However, aside from the differences, basic underlying motives for using social network sites (seeking friends, social support, entertainment, information, and convenience) are very similar between the countries with different cultures.
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2.1 Opportunities and Risks of Social Media Marketing According to Hoffman and Fodor (2010): in order to maximize the effectiveness of social media efforts, the managers must recognize two things. First, it is certain that customers are the ones having control of their social media experiences, but it does not mean that the company cannot integrate them into their social media strategies. A social media manager can have at least a framework of how customers can participate in building the brands image in social media. For example, companies can invite the involvement of bloggers and give them incentives. Some companies already hire endorsers on Twitter to promote their products, the people whom are widely known as ‘celeb-tweets‘. Second, the dynamic movement and constant change of social media must be appreciated by the companies. Most companies ignore this fact as most of them only take for granted that social media and its practices are fixed with consumer behaviour concept. A good social media manager must know that this is not the case. Social media is merely a way to detect and reach potential customers, but it needs to be taken care of carefully if the company wants optimum result [22]. Furthermore, according to Hoffman and Fodor (2010), the concept of social media marketing should be carried out under 4C’s: connections, creation, consumption, and control [22]. The concrete implication is to make active investments between the customers in various forms of social media, such as blog comments, active participation, private endorsements, review, or merely a recommendation to their peers. In the context of social media, online marketing is the modern implementation for Word of Mouth Marketing (WOM). The WOM concept is based on the flow of information that consumer gives to their friends and acquaintances in terms of product and service reviews to give much greater confidence than marketing messages [23]. The aim of the WOM marketing is, therefore, to promote communication between satisfied consumers and their environment. According to Henning-Thurau et al. (2004), the rapid development of web-based communication has created a new kind of WOM, the so-called electronic Word of Mouth (eWOM) [24]. The act of liking, commenting, and sharing on corporate Social media or Youtube, or re-tweeting a post on corporate Twitter is part of the eWOM. From internal marketing perspective, there is still often great scepticism about social media. The consequence of having active social media activities is that the flow of information might be overwhelmed. As already mentioned above, social media users are globally connected and can anytime get into the eWOM process 24 hours a day, seven days a week. Therefore, there will be a demand to respond to consumers’ inquiries or requests on time. Without the support of the management in the form of adequate resources for social media, failures are unavoidable (Henning – Thurau, 2004) According to Kaplan and Haenlein (2011) three basic criteria which make viral marketing effective and must be met are: “the right people need to get the right message under the right circumstances“. Viral marketing can be driven by three kind of people, which are market maven, social hubs, and salespeople [6]. Most of the time, market maven creates the message and transfers it to social hubs. If market maven’s created message is not effective, then salespeople make it more effective and then transmit it to social hubs. Generally, this message needs to be more effective because this message would help to trigger emotions of the receiver. These message can be either positive (e.g., joy) or negative (e.g., disgust, fear) [6]. The Success of viral marketing can be influenced by delivering the right message to the right people in the right environmental condition. Another major risk is the chance of exposing bad feedback from the consumers. Social media offers consumers a great platform to communicate their dissatisfaction with certain products and services, to the public (for example, through blogs) or to existing contacts (through social network platform). This shift of power in favour of the consumer therefore bears risks for companies, as dissatisfied consumers can reveal their frustrations to worldwide audiences. Consequently, the intended e-WOM activities can in the end become negative e-WOM, as not everything posted in the social media can be controlled by the corporate [25] Opportunities
External Point of View
+ Market Information(Monitoring) + Cheap and Fast Market Research + WOM Marketing + Possibility to build relations with other media. - There is no such things as tangible social media resources - Well-planned strategy needs to be developed - Dependance to the social media provider - Demand of fast and consistent updates - Negative feedback is out of control
Internal Point of View
Optimal Design of Consumer Relationship
Risks
+ Well-defined social media strategy + Active involvement in social Media + Balance between Social Media marketing and Direct Marketing
- Social media is seen merely as a tool -> Consumers feel they are not taken seriously.
Table 2: Combination of Opportunities and Risks of Social Media Marketing
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Besides being information receivers, companies can also send messages to customers and expect them to spread the information to their networks or peers though social media. One other opportunity is to establish networks in the form of partnership, as most companies also use social media platforms nowadays. In the case of publishing companies, they can collaborate with advertising agencies, magazines, and newspapers. All can be done easily and less-costly with social media platforms. The ideal costumer relationship with social media can be achieved through active involvement, well-planned strategy, and balance between direct marketing and social media marketing. The last point should be underlined, otherwise customers will feel that they are only ‘virtual entity’ and not taken seriously in real life.
Figure 2: The Relationship of Motives and Interests in Social Media Marketing
The figure above shows how three major disciplines are involved: computer science (social media functions), marketing (business goals) and psychology (motives and needs of users). The arrows imply the relationship between the units. To companies, social media is regarded as a useful marketing tool. As we have discussed before, social media marketing is the modern implementation for Word of Mouth Marketing (WOM), which is based on the flow of information that consumer gives to their friends and acquaintances in terms of product and service reviews to give much greater confidence than marketing messages [23]. The objectives of the companies that use social media primarily include the acquisition of insights concerning the customer and the spreading of e-WOM (electronic Word-of-Mouth). To users, the use of social media are based on three basic needs: to consume information and entertainment, to participate in social interaction / community development, and to produce self-expression and self-actualization [17]. Social media offers some fulfilment towards customers’ needs of information and entertainment. Their features, such as video and photo upload enable the spreading of information and self-production of entertainment. Through social media networking platforms such as Social media, they fulfil the needs of self-actualization and networking. 3. 1. 2.
Discussions, Findings, and Recommendations Company The more active companies publish social media posts...
Customer The more active customers will behave (the more ‘likes‘, retweets, comments, and shares)
4.
What kinds of posts? Posts that need participation from customers (competitions and events). Examples: writing challenge, a launch event, etc. Posts that only communicate products (promotions, background). Examples: tag synopsis, date of release of products, etc. How to avoid negative comments?
5.
What triggers customers’ questions?
6.
How to handle customers’ questions?
Feedbacks are binding / participatory (likes, comments, shares).
Feedbacks are not binding (only high numbers of likes, but lack of comments and shares) Avoid too much advertisement. Mix the posts with trivia / competition / fun posts. To know more about competitions and events (participatory contents) Information gathering (any posts from the company) Regularly provide answers or useful links.
Table 3: Final Recommendations
The act of commenting, sharing and re-publishing a post on corporate social media platform is part of the electronic word-of-mouth (e-WOM) [24]. Since our focus of discussion is specified on the social media ‘Twitter‘, we can conclude that when companies use the options ‘reply‘, ‘retweets‘ and other Twitter features, then interact with customers, they are actually within the ongoing process of e-WOM. Therefore, we believe it is important to picture a mapping about the types of posts conducted by company and
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customers. A clear mapping can be pictured in the table below: Types of Company Posts 1. Promotion 2. Product Development
3. Background 4. Events
5. Competitions
Explanation Posts intended to introduce new products Posts intended to gather customers‘ feedback for the sake of research and development Posts explaining the story behind products Posts informing offline events related to the promotion of products Posts intended to engage customers in online games/ contests
Types of Activity Tweet
Types of Customers Posts Praise
Tweet, Tweet with pictures, Reply
Tweet, Tweet with pictures, Reply Tweet, Tweet with Pictures
Criticism
Advices / Support
Tweet, Reply, Online Contests
Explanation Positive Feedback toward certain posts / product Negative Feedback toward certain posts / product
Types of Activity Comments, Reply, Retweets Comments, Reply
Supporting Feedback toward certain posts / product Enquiries about products
Comments
Any other posts, mostly unrelated posts or activities
Retweets
Reply
Questions
Others
Table 4: Types of Posts
Some studies have already been conducted about social media, but the study focus continues to grow as the technology of social media itself keeps growing every day. As an author, the only thing that this observation can deal with social media is to add new findings for more research in the future. From an economic perspective, the findings of this study are interesting for the following reasons. Firstly, marketing communications for high-involvement products can be performed in social media as a platform, which relies on the commitment of the users. There, we found that the emotional factor plays a big role in how customers post on social media. These contents are not so much discussed in the existing literatures. Most of them talk about users‘ motives in using social media and general social media strategies that become more and more common these days. However, up to this moment, I do not see many of the literatures that talk about which of the Social media contents that are most important in measuring customers‘ involvement or even loyalty. From the observation conducted on this paper, we have drawn a conclusion that those aspects can somehow be measured by counting the numbers of feedbacks (comments, likes, shares) and comparing them into other content categories, mainly companies’ posts. Through focused and motivated conscious customer care activities, companies can gain advantages by e-WOM (Electronic Word of Mouth) from internet users. Praise for a company, a product or a service is contagious in a good way, which spreads easily throughout social media. For businesses, it has never been so easy and cheap to obtain support for their products and services as what happens in today’s highly networked social media age. However, the study about motives and needs of these promoters is still not enough. The studies in social media are still relatively young, therefore, there have not been many literatures specifically talking about motives. It shows that further research is needed to obtain more information. Last but not least, further research into the social media activities of modern-day companies are highly recommended. The analysis of the collected content analysis could also be reused for other issues and studies in the topic of social media.
References [1] http://blog.twitter.com/2012/03/twitter-turns-six.html [2] Wilson, H. J. et al. (2011),What’s Your Social Media Strategy?, In Harvard Business Review, Vol. 89, Nr. 7/8, S. 23-25. [3] Boyd, D. M., & Ellison, N. B. (2007). Social Network Sites: Definition, History, and Scholarship. Journal of Computer-Mediated Communication, 13(1), article 11. Retrieved on: 2012-01-30. [4] Hoffman, Donna L., and Marek Fodor. 'Can you measure the ROI of your social media marketing.' MIT Sloan Management Review 52.1 (2010): 4149.
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Twitter Campaign and How Commercial Blogs are Useful for Community Marketing in Indonesia [5] http://techcrunch.com/2012/07/30/analyst-twitter-passed-500m-users-in-june-2012-140m-of-them-in-us-jakarta-biggest-tweeting-city [6] Kaplan , A.M and Michael Haenlein (2010): Users of the world, unite! The challenges and opportunities of Social Media, Business Horizons (2010) 53, p. 59—68. [7] Qualman (2010): Socialnomics: How Social Media Transforms the Way We Live and Do Business (paperback edition), Wiley, ISBN-13: 9780470638842. [8] Lipak, Tanja (2013): Social Media Marketing für Lebensmittel-Hersteller. Institut für Wirtschaftsinformatik, Wirtschafts- und Sozialwissenschaftlichen Fakultät, Universität Bern (unpublished) [9] Nelson, M. (2006): The Blog Phenomenon and the Book Publishing Industry. Publishing Research Quarterly, June 2006, Volume 22, Issue 2, pp 3-26. [10] The Economist, Jan 6th, 2011. [11] Marketing News, 15 January 2008. Lisa M. Keefe (editor) [12] Kotler, Philip, and Gerald Zaltman. 'Social marketing: an approach to planned social change.' The Journal of Marketing (1971): 3-12. [13] Chekitan, S., and D. Schultz. 'How a Customer-Focused Approach Can Bring the Current Marketing Mix into the 21st.' Journal of Marketing Management 12 (2005): 24-78. [14] Tracy, B (2004), The 7 Ps of Marketing: Take charge of your marketing efforts and beat the competition with this simple formula. http://www.entrepreneur.com/article/70824#ixzz2XGxZQARS [15] Mangold, W. Glynn, and David J. Faulds (2009) 'Social media: The new hybrid element of the promotion mix.' Business horizons 52.4 (2009): 357365. [16] Boyd, D. M., & Ellison, N. B. (2007). Social Network Sites: Definition, History, and Scholarship. Journal of Computer-Mediated Communication, 13(1), article 11. Retrieved on: 2012-01-30. [17] Shao, G. (2009) 'Understanding the appeal of user-generated media: a uses and gratification perspective', Internet Research, Vol. 19 Iss: 1, pp.7 – 25, University of Alabama, Tuscaloosa, Alabama, USA) [18] Bolar, K. P. 'Motives behind the use of social networking sites: an empirical study.' ICFAI Journal of Management Research 8.1 (2009): 75-84. [19] Foster, D. et al. (2010): 'Motivating physical activity at work: using persuasive social media for competitive step counting.' Proceedings of the 14th International Academic MindTrek Conference: Envisioning Future Media Environments. ACM, 2010. [20] Kim, Yoojung, Dongyoung Sohn, and Sejung Marina Choi. 'Cultural difference in motivations for using social network sites: A comparative study of American and Korean college students.' Computers in Human Behavior 27.1 (2011): 365-372. [21] Hofstede, Geert H., and Geert Hofstede. Culture's consequences. SAGE Publications, Incorporated, 2001. [22] Hoffman, Donna L., and Marek Fodor. 'Can you measure the ROI of your social media marketing.' MIT Sloan Management Review 52.1 (2010): 4149. [23] Kozinets, Robert V., et al. 'Networked narratives: Understanding word-of-mouth marketing in online communities.' Journal of marketing 74.2 (2010): 71-89. [24] Hennig-Thurau, Thorsten, et al. 'Electronic word-of-mouth via consumer-opinion platforms: what motivates consumers to articulate themselves on the internet?.'Journal of interactive marketing 18.1 (2004): 38-52.
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CEO O Succession and d Stock R Returns at Indon nesia Stoock Exch hange Canddra Wijayaangka, Bud di Rustandii Kartawinaata, Irfan Prarendra, P P Peggy Harriwan Telkom om University, Inddonesia
Abstract A Event study is a study which iss concerned witth market reacttion to an eventt where its information is publlished as an an nnouncement. The T nnouncement of CEO successiion is one of maany economic eevents through press p releases published p by thee company. Thee CEO successiion an allso shows a chaange on leadersship in which during d the proceess it can makee changes in thee business strateegy. Therefore, organizationnal reestructuring is rrequired to keeep the process of business strrategy on work king. This study y aims to test the efficiency of the market by an nalyzing the efffect of CEO chaange announcem ment toward thee abnormal retu urn on stocks in the Stock Exchhange in 2005-2 2011. The methhod ussed is the eventt study. The period of analysis is 45 working ddays, which con nsists 30 days of estimation perriod and 15 day ys of event periood. Thirty four comppanies listed on the Stock Exch hange in 2005 too 2011 were tak ken as sample. Hypothesis H testiing is using t-tesst for independeent O substitution. The T substitutionn of saamples. Based oon this research, it is proven thaat there are abnoormal returns frrom the announcement of CEO olld CEO to new reputable CEO O or vice versa generates g averag age abnormal return that is negative.
© 2014 Candraa Wijayangka, Budi Rustandi Kartawinatta, Irfan Prarendra, Peggy Hariwan. H Publlished by Telk kom Pub. Ltd. Selection and ppeer-review unnder responsib bility of The IISCLO, Deparrtment of Com mmunication, U University off Telkom, 203442 Bandung, B Indonesia. Keywords: K markket efficiency, CEO C succession n, reputation, abbnormal return, t-test
Background B Capitaal market in Inndonesia run two t functionss; economic an nd financial. In I economic fu function, the fund f is allocatted effficiently from m parties whoo have surpluss funds as thee capital owneers (investors) to companiees listed on th he stock markket (iissuers). Whilee the finance function of th he capital markket is shown by b the possibility and the oppportunity to get in return the t fu und to the ownner or investors in accordan nce with the chharacter of thee investment that t will be seelected. Activiity in the stock market is influenced bby the econom mic environment, both mac acro and micrro, and politiccal en nvironment. The influencce of micro--economic ennvironment are a CEO succcession, diviidend distribution, and the t an nnouncement of financial statements. Additionally, A the influence of macro environment e aare changes in n interest ratees, in nflation at hom me and abroadd, as well as vaarious regulattory and econo omic deregulaation issued byy the governm ment. Comppany's stock price p traded on o the stock eexchange is seen s as a ratiional value thhat provides the informatioon neecessary for m making decisioon. The level of o stock price rreasonablenesss may occur when w the stockk market is effficient. Efficieent Market M Hypothhesis (Fama, 1970) is defineed as the markket price of wh hich its securitties already reeflect all relevaant informatioon. This T happens bbecause it is unnnoticed by th he traders that stock price may m adjust to th he new inform mation that can n affect the stock market. m The fasster the new innformation is reflected, the more efficien nt the stock market. The nnew informatioon will form new confidennce and chang ge the stock price p throughh changes in the t demand annd su upply of secuurities traded on o the stock market. m Changges in these conditions c are the result of various inforrmation that can afffect the transsaction. Inform mation itself is i divided intoo two, namely y internal info ormation and external info ormation (Fam ma, 19 970). Internal information is i information n that comes fr from within the company as the informatiion contained on the financiial sttatements of tthe company.. While the external e inform mation is all information that t reflects aall of the nattional econom my,
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regional, international, and important events in other fields which are able to give positive or negative impact of the transaction on the trading. CEO succession is likely to make a company's stock price fall. The statement is in accordance with the results of research conducted by Ferere and Renneboog (2000). In the journal, Ferere and Renneboog conducted a research on the relationship between the resignation of the CEO and the company's stock prices in France. They divided resignation into three categories: the forced resignation, voluntary resignation, and the resignation due to retirement age and weak. The research results show that the forced CEO succession announcement received little market response to positive abnormal return of 0.5%. The market may have been braced for the turn of events before the announcement, because there was abnormal returns of 6% in the month prior to the event. As for the voluntary CEO succession did not cause changes in stock prices. CEO succession due to aging caused a slight drop in the stock price. A decline in stock price due to the change of CEO will generally give positive reaction from the market. This happens because investors want certainty. Planning staff succession plays an important role in determining the success of the company in the future. According to Urooj et al. (2010), succession planning is a systematic process of the company to identify, assess, and develop its staff and also its successor as the right people with the appropriate skills and at the right time to ensure that they are ready to accept the leadership and other key positions in the company. The candidates with the highest potential are selected with a very tight selection who will then be trained in how to develop their skills and competencies to be able to face the challenges of leadership in the future. Rhim et al. (2006) finds that CEO succession with the right candidate will affect the success of the company. It happens because the CEO plays an important role in determining the strategy, design, performance, and corporate culture that simultaneously illustrate the company's future. CEO succession may be due to the issue of aging of the old CEO or a decline in the performance of companies on the leadership of the former CEO. This is consistent with the theory of Whidbee Farrel (2002) which states that the change of CEO is one way to overcome the performance degradation experienced by the organization. The announcement of CEO succession is one factor that can determine the level of market efficiency, because the news about it can affect the market response and be reflected in the stock price. The phenomenon of CEO succession at the world level that may attract the attention lately is the event of resignation of Steve Jobs from Apple Inc. In August 2011 he resigned from his post due to his health condition that he suffered from pancreatic cancer. The man who replaced him is Tim Cook. As a result of these events, Wall Street Apple shares fell 7% after Jobs had announced his resignation. This leading technology stocks finally managed to get up and closed up 0.7% on the NASDAQ (Kompas.com, August 25, 2011) from the news, the stock price drop of Apple Inc. generated negative abnormal returns for investors. The market responded to CEO succession events such as bad news. Although in the end Apple shares closed up, the increase was not as big as the decrease. According to Lindrianasari and Hartono (2011), an overview of the research on CEO succession phenomenon in Indonesia is still very rarely done, since the turn of the data is difficult. There is not much Information on CEO succession announced to the public either. The phenomenon which can be captured on the removal of the CEO in Indonesia is that the CEOs replaced are those who are not reputable to be replaced by the CEOs who have a good reputation (based on work experience and educational background) but instead it is seen as the fall of share price. This happens in some companies in Indonesia. This phenomenon is very interesting to be discussed, because in theory, it should turn good news and positive response from the market with a rising stock price. However, the opposite is true, even the company's stock price declines. Some companies in Indonesia, which experience a phenomenon like the above, are as follows: No.
Emiten
Abnormal Return on the day CEO
1. 2. 3.
(BIPI) PT Benakat Petroleum Energy Tbk (DEWA) PT Darma Henwa Tbk (SMCB) PT Holcim Indonesia Tbk
Succession -0,01806 -0,04094 -0,03473
Based on the background and the problem identification that have been described above, the issue concerned in this study is whether there is a difference between the average abnormal return of stocks that make replacement of CEO succession with a reputable company and the shares that the changing CEO to CEO reputation is not a good substitution.
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Theoretical Framework Market Efficiency Efficient market concept was proposed and popularized by Fama (1970). The market in question is a capital market and money market. Gumanti (2011) states that a market is said to be efficient if no-one, both individual investors and institutional investors, will be able to earn abnormal returns (abnormal returns), after adjusting for risk, and using existing trading strategies. Prices formed in the market is a reflection of the existing information or 'stock prices reflecting all available information'. Another expression states that in an efficient market prices of assets or securities, as quickly and completely, the information available about the assets or securities is reflected. Briefly in Gumanti Fama (2011) classifies the information into 3 types, namely: 1. past price changes; 2. public information; 3. public and private information. Generally there are three types of Efficient Market Hypothesis (Fama, 1970), namely: a. Weak Securities prices already reflect all information that can be derived by examining market trading data such as historical data, trading volume, and interest on the loan. Version of this hypothesis implies that trend analysis is futile. This hypothesis is valid if the data is a reliable signal of future performance so that all investors can learn these signals and the signals ultimately will lose meaning. b. Semi Strong Form The prospect of a company should be reflected in the stock price. Such information includes in addition to the price, past, fundamental data on the company's product line, management quality, balance sheet composition, patents held, profit forecast, as well as accounting practices. On the efficiency of this form, the investors have access to this information. c. Strong Form The market price reflects all relevant information, including information available to the people. Stock Return Hartono (2003: 446) defines return as a return realization that has occurred and can be calculated based on historical data, while return expectation is the return that is expected to be acquired by investors in the future. An abnormal return is based on all relevant information available. An abnormal return is the excess of the return actually happening to return to normal. Several measurements used for actual return are total return, relative return, cumulative returns, and adjusted return. Total Return Total return is the total return of an investment in a given period. Total return is often called the 'return'. Hartono (2003: 110) states the total return consists of capital gain (loss) and yield that can be denoted as: Return = Capital Gain (Loss) + Yield Capital gain (loss) which is different in their relative price of investment now with the price of the last period Capital gain can be denoted as: Capital gain (loss) = Return Expectation Return expectation is the return that must be estimated. Brown and Warner (1985) in Hartono (2007: 434) estimate abnormal returns using an estimation, namely: 1. Mean-Adjusted Model Model-adjusted average (mean-adjusted model) assumes that the return expectation is a constant equal to the average return realized earlier during the estimation period. Estimation period is the period before the event. The formula used to calculate the return expectations is as follows: E (Ri,t) =
∑
,
2. Market Model The calculation of return expectations with the market model is done by establishing a model expectation using data
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realization during the estimation period and then using the model to estimate the expected return in the period of the event (the event period). Model expectations can be formed using OLS regression techniques (Ordinary Least Square) with the equation: Ri,j = αi + βi .RMj + εi,j 3. Market Adjusted Model A market-adjusted model used to estimate returns assumes that an event will be better when using the market index return at that time. In this model the estimation period is not used to establish the model estimation because the estimated return of the securities is equal to the return of a market index. Abnormal Return Abnormal return can be calculated with the formula: AR i,t = R i,t – E (Rit) Average Abnormal Return To test wether there is any abnormal return for each security, it is done in the aggregate; the average abnormal return tests all of the securities in cross-section for each day in the event period. The average abnormal return for day t can be calculated based on the following arithmetic average:
AART =
∑
,
Cumulative Abnormal Return Accumulation of an abnormal return or cumulative abnormal return (CAR) is the sum of abnormal returns in the days before the event period for each of the following securities: CARi,t =∑ ,
Cummulative Average Abnormal Return If there are k securities, the accumulated average abnormal return or cumulative average abnormal return (CAAR) can be calculated as follows:
CAARt =
∑
CEO Reputation Each company must choose people who are experienced and have good credibility to become the CEO of the company. Anyone can become a CEO of both from the internal and external of the company as long as he or she deserves and meets the conditions set by the company. The selection of a CEO’s reputation is associated with individuals who are the candidates for the CEO. According to Gainess-Ross (2003):
“Research has shown the reputation of the CEO is inextricably linked to the reputation of the company. CEOs set the tone, define company direction, attract talent, and are the human face of the organization. Increasingly, CEOs are building their brands on credibility, not celebrity. In times of uncertainty, the CEO is called upon to speak on behalf of the organization.” Gainess-Ross also stated that CEO reputation is the manner in which the media, investors, analysts, employees, and even the general public perceive a chief executive has tremendous influence over the company's prosperity, standing, and destiny. CEO reputation is the way the media, investors, analysts, employees, and even the general public think a chief executive has tremendous influences on prosperity, survival, and the fate of the company. Event Study Event study is defined as a study concerning the impact of an event on stock prices in the market, both at the time it happens and a few moments after it happens. It is a condition whether the share price will increase or decrease after the event takes place or whether the stock price has been affected before it happens officially (Husnan, 2005). Many events may affect the price of stocks in the market and therefore it happens. These events have different characteristics. Corporate events such as
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split, rights issue, bonus shares, etc. have an influence on stock prices but slow (Husnan, 2005). According to Tandelilin (2001), a standard methodology that is typically used in the event study is as follows: a. Collecting sample b. Determining the actual day of the event c. Determining the projecting period d. Calculating the returned sample, every day during the projection period. e. Calculating abnormal returns f. Calculating day to day average abnormal returns. g. Sometimes a daily abnormal return is used for calculating abnormal return. Research Methodology The research method used in this study is descriptive and verificative method with event study approach. Descriptive approach (descriptive research) is performed by interpreting the data obtained based on the facts that appear in the period of the study in order to obtain a clear description from the object. Verification approach is done through statistical tests of the hypothesis that is proposed. The research begins from the analysis phase theory as a starting point, and then the data was collected, processed, and analyzed, then inferred based on the existing theory. Descriptive methods describe or depict any actual data existing as well as the phenomena. The definition of descriptive method according to Cooper and Shindler (2003: 10) is as follows:
“A descriptive study tries to discover answer to the question who, what, when, where and sometimes how to describe or define a subject, often by creating a profile of a group of problems, people or event.” According Tandelilin (2001: 126), studies have looked at the impact of the announcement information to price securities that are often called event study. Event study is primarily related to how fast the information coming into the market may be reflected in the stock price. Table 2. Operational Variable Variable
Variable Concept
CEO Succession
An independent variable is also a dummy variable in the study.
Indicator a. Working Experience (10-30 years) b. Age(25-65 years) c. Educational background (SMA-S3)
Scale Nominal
Abnormal Return : AR i,t = R i,t – E (Rit) Average Abnormal Return : Abnormal Return
An excess of its actual return (actual return) to the expectations of return (expected return). This is the dependent variable
AART=
∑
, Ratio
Cumulative Average Abnormal Return
CARi,t =∑
,
Sources of data used in this research are secondary data, where the data are already available and published by particular researcher. These data used by the author is the data that relate directly to the research conducted and sourced from: 1. Investing.businessweek.com 2. www.finance.yahoo.com 3. www.idx.co.id 4. www.tokohindonesia.com 5. www.ipotindonesia.com 6. www.reuters.com
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Sampling The population of the research is the companies listed on the Indonesian Stock Exchange who did CEO succession in the year 2005 - 2011, as many as 214 companies. Sampling technique in this study is purposive sampling. Purposive sampling is a sampling technique which does not give the same chance or opportunity for any element or selected members of the population to be sampled (Nazir, 2003: 89). The sampling method is used to determine the suitability of the sample on the basis of the characteristics of the sample with certain selection criteria. The criteria used in this study include: 1. The Companies that are listed at Indonesian Stock Exchange 2005-2011 period. 2. Firms are never included in the index Bisnis27, LQ45, and Kompas100 2005-2011 period; 3. Company incorporated in the index Bisnis27, LQ45, and Kompas100 who do CEO succession during the 2005-2011 period. Analysis Framework The samples in this study were divided into two groups, namely the group shares with the announcement of CEO turnover events with a reputable replacement of CEO (Reputation 1/R 1) and the group shares with the announcement of CEO turnover events with CEO replacement with not reputable ones (Reputation 0/R0). Shares with a reputation of Reputation 1 is 11 units in total, while stocks with a reputation of Reputation 0 is 23 pieces in total. This grouping was done in order to see the impact of each announcement, whether a good CEO turnover generates a positive abnormal return and whether CEO turnover, which is bad, produces negative abnormal returns. Results Observation of Average Abnormal Return and Cumulative Average Abnormal Return on Event Period of CEO Changing Announcement Markets react differently to an event. For the CEO turnover events in this study, both the market responses show negative response. The acquisition of abnormal return is negative indicating that the negative market gives reaction to the announcement of CEO turnover. CEO turnover announcement has caused the average abnormal return (AAR) shares of the company with the reputation of the successor for the CEO whose reputation is not good (Reputation 0/R0) to decrease. The same happens with the condition of R1, AAR shares of the enterprises with a good reputation successor for CEO (Reputation 1 / R1) is negative. Based on the calculation, the CEO turnover with a reputation of 0 and reputation 1 produces negative abnormal returns. But CEO successors with a good reputation (R1) produces a more negative abnormal return than the condition R0 around the announcement date, with the average value of R1 -0.00216 AAR and the AAR average of R0 is -0.00015. Cumulative average abnormal return (CAAR) is useful to describe the magnitude of the average abnormal stock return to the day-to-t. From this value, it is seen that the announcement of CEO turnover gives a positive or negative impact on investors. The overall impact is seen at the end of the period of analysis (i.e. H + 7). If the value of H + 7 CAAR is positive, then the announcement of CEO change gives positive impact. Similarly, on the other hand, if the H + 7 CAAR is negative, then the announcement of the CEO change will adversely impact the investor. CAAR value of the shares is acquired by the company with the reputation of the CEO successor R0 up to H + 7 is of -0.219%.This is a signal that the event of CEO announcement turnover gives a negative impact on the shares of the successor company to the CEO's reputation that it is not good because it reaches the end of its CAAR period - the negative events. The shares of enterprises with good CEO successor reputation (R1) give a negative value on CAAR. The same condition occurs to the not good CEO successor reputation (R0). The CAAR for the condition R1 is -0.03245. Statistical Testing for Abnormal Returns around CEO Succession Announcement in Event Period Before doing the statistical test, the first step to do is testing data normality. To test the normality of the average abnormal data return, we use one sample Kolmogorov Smirnov test with α = 0.05. The hypothesis: H0: Normal distributed data Ha: Not normally distributed data
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Normality test results on the average abnormal return data is as follows: Table 3. Kolmogorov-Smirnov Variable
Asymp. Sig
α
Evidence
Average Abnormal Return (AAR)
0.563
0.05
Pass
Average Abnormal Return (AAR)_R0
0.972
0.05
Pass
Average Abnormal Return (AAR)_R1
0.217
0.05
Pass
In Table 3 above, it appears that the entire sample passes the Kolmogorov-Smirnov normality test. It is the evidence of the significance of each sample for 15 days event period which is greater than α of 5%. After all data have passed Kolmogorov Smirnov test, then the test was done to find: H1: there is abnormal return from the announcement of CEO succession; H2.1: there is positive abnormal return for CEO succession with good reputation (1); H2.2: there is positive abnormal return for CEO succession with not good reputation (0). Test of Hypothesis 1 Hypothesis 1 (H1) is the tentative conclusion of this study to prove that the announcement of CEO succession gives abnormal return. Null hypothesis and the alternative hypothesis are as follows: H0: AR = 0 Ha: AR ≠ 0 The Results for Hypothesis 1 testing of the total shares regarding CEO succession announcement with a good and not good reputation are as follows: Table 4 Average Abnormal Return of CEO Succession During Event Period Day Average Abnormal Return (AAR) t-test -7 0.00145 -0.73870 -6 0.00092 0.41929 -5 0.00704 0.51481 -4 -0.00029 0.43978 -3 -0.00373 -1.17977 -2 0.00172 1.48482 -1 -0.00287 -1.54833 0 -0.00121 0.12349 +1 0.01079 0.89549 +2 -0.00513 -1.33705 +3 -0.00158 -0.65201 +4 -0.00158 -0.30734 +5 -0.00499* -1.99824* +6 -0.02005** -2.28436** +7 0.00754 1.67062 Note : t-test based on null hypothesis which state Average Abnormal Return (AAR) = 0 *= significant at α = 10% (t < -1.6924 and t > 1.6924 for two tail test with k=34) **= significant at α = 5% (t < -2.0345 and t > 2.0345 for two tail test with k=34) It can be seen in Table 4 above, it appears that the CEO turnover announcement events are statistically proven to provide significant abnormal returns for shareholders. Significant abnormal return magnitude occurs at H + 5 and H + 6 with two different levels of significance. An abnormal return of H + 5 is proved significant at α = 0.1 with the t-test -1.998. AAR at H + 6 significant at α = 0.05 with the t-calculate -2.284.
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The occurrence of a significant abnormal return at H + 5 and H + 6 indicates that the market absorbs information and reacts to the CEO turnover quite slowly to the event to form a new equilibrium price. The market is not efficient because the market responses to a new equilibrium is relatively late. It needs 5 days after the CEO succession. It is not compatible with the theory put forward by Hartono (2007: 390), namely: “Market is called efficient if time adjustment of new equilibrium price is done rapidly. The speed of the market to absorb all of the information depends on the type of the information. If the investor only takes a quick step to evaluate the information, the possibility of time may only be for a few days or even a single day or even in just a few minutes alone”. Indonesian market responds to the CEO succession slowly. Indonesian investors need a long time to assess whether it gives a good impact for the company. Market will give a good response if the reputation of the successor CEO is better than before. That condition happens because the investor assumes that the CEO with a good reputation will increase the value of the firm. Otherwise, the CEO with not good reputation will decrease the value of the firm. The test results for Hypothesis 1 of CEO successor with not good reputation is: Table 5 Average Abnormal Return of CEO Successor With Not Good Reputation (R0) During Event Period Day Average Abnormal Return_R0 (AAR_R0) t-test -7 -0.00265 -0.84020 -6 0.00424 0.82148 -5 -0.00122 0.09095 -4 0.00170 0.67900 -3 -0.00608** -1.79879** -2 -0.00073 1.43548 -1 -0.00264** -1.88293** 0 0.00117 -0.36131 +1 0.01312 1.56109 +2 -0.00612 -1.29202 +3 -0.00044 -0.72194 +4 0.00295 0.36961 +5 -0.00497* -1.65882** +6 -0.00466 -0.09441 +7 0.00414 0.74915 Note : t-test based on null hypothesis which state Average Abnormal Return (AAR) = 0 *= significant at α = 10% (t < -1.6924 one tail test with k=23) **= significant at α = 5% (t < -2.0345 one tail test with k=23) The results in Table 5 shows the value AAR_R0 for 23 stocks and test-t in the days of the event period. AAR H-3 and H-1 is significant value at α = 5% (t-test value is smaller than -1.7171). AAR values of H + 5 is significant at α = 10%. The T-test value is smaller than t-table, which leads to rejection of H0 and Ha reception. It is evident that the CEO turnover announcement event, in this case the CEO succession with no good reputation, generates negative abnormal returns for investors. AAR significance around the announcement date, namely the H-3, H-1, and H + 5 indicates that the announcement contains the information. Therefore, the announcement causing the market reaction is shown by the AAR obtained. In H-1 announcement, there is a significant abnormal return. This indicates that the information has been disseminated in public first before it was officially announced. In H0 to H + 4 there is no abnormal return. However, in the case of H + 5 there is a significant negative abnormal returns. CEO turnover events in companies that do not have good reputation of CEO succession will not be responded well by the market. The market is less responsive to receive such information, so that the new abnormal return occurs 5 days after the announcement. However, after H + 6 it is stabilized and the market price has reached its equilibrium price, because it is not found any abnormal return again. The test results for Hypothesis 1 of CEO successor with good reputation are:
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CEO Succession and Stock Returns at Indonesia Stock Exchange
Table 6 Average Abnormal Return of CEO Successor with Good Reputation (R1) During the Event Period Day Average Abnormal Return_R1 (AAR_R1) t-test -7 0.01000 -0.08379 -6 -0.00604 -0.45071 -5 0.02431 0.77357 -4 -0.00446 -0.20865 -3 0.00119 0.52689 -2 0.00684 0.53475 -1 -0.00336 0.00061 0 -0.00617 0.73956 +1 0.00592 -0.68297 +2 -0.00306 -0.48240 +3 -0.00397 -0.10237 +4 -0.01105 -1.07479 +5 -0.00502 -1.11445 +6 -0.05223 -3.87961 +7 0.01464* 1.85385* Note : t-test based on null hypothesis which states Average Abnormal Return (AAR) = 0 *= significant at α = 5% (t > 1.8125 one tail test with k=11) Based on the table above, 1 AAR_R1 is statistically significant. The significant AAR obtained in the H + 7. AAR values of H + 7 is significant at α = 5%. The acquisition of significance around the announcement date of the announcement shows that a CEO succession with a good reputation contains information that makes the market react. Market reaction is shown by an average abnormal return earned by investors. At the CEO succession with good reputation, the market response occurs rather slowly. Market will response to the events of the week after the announcement. Based on the test results of Hypothesis 1, it can be concluded that the CEO succession event generates abnormal returns for shareholders. Similarly, in the research by Ferere and Renneboog (2000) in his journal that examines the stock price response to the resignation of the CEO of the French company, the CEO succession with the forced resignation of the CEO (e.g. due to poor performance) will result positive and significant abnormal returns, although the number is not very high, that is equal to 0.5%. While the CEO turnover due to age (retirement) will result in a decrease in the stock price. The results of hypothesis test 1 also shows that the testing efficiency of the semi-strong market (semi-strong form) in Indonesia is not efficient. Market response is a bit slow with the creation of the new equilibrium price only in 5 to 7 days after the announcement. It proves that the market is not efficient, less in accordance with the theory of market efficiency proposed by Hartono (2007). Test of Hypothesis 2 Hypothesis 2 in this study aims to analyze whether there are differences between the abnormal return of CEO succession events with good reputation (AR_R1) and the abnormal return of CEO succession events with not good reputation (AR_R0) where: H2.1: there is a positive abnormal return for CEO succession with good reputation (1) H0: AAR ≤ 0 Ha: AAR > 0 H2.2: there is a negative abnormal return for CEO succession with not good reputation (0); Significance test for hypothesis 2 is done to test the average difference (t-test) in one direction. Error rate used in this test is α = 0.05. The statistical test on Hypothesis 2 is described in Table 7 below.
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Table 7 Hyp pothesis Testinng – Average Abnormal Reeturn Indeppendent Samplle Test
Source: data processeed o F Leveene test is calcculated of 3.34 48 with a prob bability of 0.0778. Because th he probabilityy is As seenn in the SPSS output, > α (0.05), we ccan compare the t average po opulation t-testt with the Equ ual Variances Assumed A basiis. The table ab bove shows thhat th he value of t-teest on equal vaariance assum med is 0.447 w with the significcance probabiility of 0.658. The value of t-table t with dff = 28 and α = 0.055 (two-tail) is obtained by 2.048. 2 Whe thee t-test is com mpared with thee t-table to thee right side on n H2.1, the vallue off t-test is (0.6558) - t-tablee (-2.048). Froom th hese results it can be concluuded that Ha = abnormal reeturn of CEO succession with w not good reputation (R R0) will result in neegative abnorm mal returns, annd therefore itt is rejected. A Although the CEO C successio on with good rreputation is not considered as baad news and the market reesponds negatively and doees not providee benefits to investors, i thesse results are not statisticallly siignificant. Based oon the test resuults of Hypothesis 2, it can bbe concluded that t there is no o difference inn the market reesponse of CE EO su uccession evennt, either withh a new CEO with w a good reeputation and a new CEO whose w reputatiion is not good d. Both produuce neegative abnorrmal returns. Both do not give benefit ffor shareholders. From theese events, alll investors assume that CE EO su uccession is bad news. This is cconsistent witth the results of o the researchh by Ferere an nd Renneboog g (2000): CEO O succession due d to aging will w geenerate a negaative return. When W comparred with the siituation in Ind donesia, the CEO C of a natioonal company y in Indonesia is ollder (near to rretirement agee). This may be due to the pprinciple that mature m age and d experience aare much better. These reesults are also consistent wiith the results oof previous studies conductted by Urooj eet al. (2010) who w examined 10 CEO C successioon events in Paakistan during g 2005-2008. From these sttudies, the results showed thhat there weree negative stock reeturns after thee event. It meaans that the CE EO successionn is bad news for the market. This happenns because mo ost companies in Pakistan is fam mily owned. Thus, if therre is a CEO succession an nd replacemeent, candidatees coming fro om the externnal en nvironment off the family, itt is considered d as a threat too the company y and the mark ket will responnd negatively y. The ressults of hypotthesis 1 and hypothesis 2..1 testing sho ow that the reesults are siggnificant. Meaanwhile, on the t hy ypothesis 2.2, although thee CEO succession with goood reputation is not consideered as bad neews and the market m responnds neegatively, it dooes not providde benefits to investors. i Theese results are not statistically significant.. The results of o hypothesis 2.2 2 teesting indicatees that the measurement staandards may bbe used to deteermine the rep placement of CEO whose reputation r is not n hiigh enough, soo it does not look too obvio ous in the diffe ference betweeen the good reputation r witth the bad repu utation. Based oon the comparrison between n the average A AAR of CEO O succession events with a ggood reputatio on (R1) and the t CEO C successioon event with no good repu utation (R0), the result of average abnormal return (A AAR) is quite different. The av verage value oof AAR_R1 is -0.00216 an nd the averagee value of AAR R_R0 is -0.00 0015. The diffference in the average valuees in ndicates that a greater markket responds to o good news (replacement CEO having a good reputaation than the previous CEO O)
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CEO Succession and Stock Returns at Indonesia Stock Exchange
rather than bad news (CEO replacement having a reputation which is not better than the previous CEO). This might be due to the lack of standard assessment on good reputation. Based on the information absorption, the Indonesian market can be said to be inefficient. This is due to the fact that the absorption of CEO turnover announcement information to establish a new equilibrium price is a bit slow going with 5 to 7 days after the announcement of the event. The results of t-test on the hypothesis 2 imply that the results are not in accordance with the Efficient Market Hypothesis (EMH). Good news should generate a positive abnormal return and bad news generates negative abnormal returns. Events whose result is in accordance with the EMH is CEO succession with not good reputation. However, the CEO succession with good reputation do not generate positive abnormal return. The results of testing hypotheses 1 and 2 are different from the EMH. This suggests that may be the measurement standards used to determine the reputation of the CEO replacement in this experiment is not high enough; thus, it does not look too obvious in the difference between the good reputation and the bad reputation.
Conclusion Based on the discussion and analysis of the proposed hypothesis regarding the impact of CEO succession announcement on shares of the sample, several conclusions can be made as follows: 1. There is an average abnormal return on the announcement of CEO succession events which are significant at α = 10% and α = 5%. The abnormal return is a market response to information circulating on the stock exchange. 2. There is no difference in the average abnormal return based on the statistical test of the CEO succession event with good reputation (AR_R1) and CEO succession event with no good reputation (AR_R0). CEO succession events with good reputation and CEO succession with no good reputation is regarded as bad news by the market and therefore it obtains negative average abnormal return that does not provide benefits to shareholders.
References Aczel, Amir D. 1999. Complete Business Statistics 4th Edition. Singapore: Mc. Graw-Hill International. Ang, Robert. 1997. Buku Pintar Pasar Modal Indonesia. Jakarta: Mediasoft. Anoraga, Pandji dan Pakarti, Piji. 2003. Pengantar Pasar Modal. Jakarta: Rineka Cipta. Bodie, Zvi, Kane, Alex, Marcus, Alan J. 2005. Investments. New York: McGraw-Hill. Cooper, Ronald and Shindler, Pamela. 2003. Business Research Methods, New York: McGraw-Hill. Gaines-Ross, Leslie. 2003. CEO Capital: A Guide to Building CEO Reputation and Company Success. USA: Wiley Publishing, Inc. Husnan, Suad. 2005. Dasar-Dasar Teori Portfolio dan Analisis Sekuritas, Edisi Keempat. Yogyakarta: UPP AMP YKPN. Ingham, Jon. 2007. Strategic Human Capital Management: Creating Value Through People. Chapter: 4. Published by Butterworth-Heinemann. Hartono, Jogiyanto. 2003. Teori Portfolio dan Analisis Investasi, Edisi Ketiga. Yogyakarta: BPFE. Hartono, Jogiyanto. 2007. Teori Portfolio dan Analisis Investasi, Edisi 2007. Yogyakarta:BPFE. Rasyad, Rasdihan. 2003. Metode Deskriptif untuk Umum. Jakarta: Gramedia. Tandelilin, Eduardus. 2001. Analisis Investasi dan Manajemen Portfolio, Edisi Pertama. Yogyakarta: BPFE. Journal: Davidson, W.N., Worrel, Dan L., and Dutia, Diap. 1993. The Stock Market Effects of CEO Succession in Bankrupt Firms. Journal of Management, Vol. 19,
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Davidson, W.N., Nemec, C., Worrell, Dan L., and Lin, J. 2002. Industrial Origin of CEOs in Outside Succession: Board Preference and Stockholder Reaction.
Journal of Management & Governance, 6: 295-321.
Denis, D. and Denis, D. 1995. Performance Changer Folllowing Top Management Dismissals. Journal of Finance, 1 (4), 1029-1057.
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Organization, Vol: 20, Issue: 3, 391-414.
Lindrianasari dan Hartono, Jogianto. 2011. Kinerja Akuntansi dan Kinerja Pasar Sebagai Anteseden dan Konsekuensi Atas Pergantian Chief Executive Officer (CEO): Kasus Dari Indonesia. – Murphy, K.J., Zimmerman, J.L. 1992. Financial Performance Sorrounding CEO Turnover. Working Paper, September 1992. Olson, John F., Halloran, Michael J. 1997. The CEO Succession Challenge. The Corporate Governance Advisor, Vol: 5, No: 3. Rhim, Jong C., Paluchette, Joy V., Song, Inam. 2006. Stock Market Reactions and Firm Performance Sorrounding CEO Succession:Antecedents of Succession and Successor Origin. American Journal of Business, Vol. 21, No. 1. Shen, Wei, and Albert, Cannella A. 2003. Will Succession Planning Increase Shareholder Wealth? Evidence from Investor Reactions to Relay CEO Successions. Strategic Management Journal, Vol. 24, No: 2, 191-198. Urooj, Syeda F., Zafaar, Nousheen, and Khattak, M. Arif. 2010. Impact of CEO Succession on Stock Return. Internet: http://bahasa.kemdiknas.go.id/kbbi/index.php http://www.merriam-webster.com/dictionary/reputation investing.businessweek.com www.bapepam.go.id www.tokohindonesia.com www.reuters.com http://www.wbiconpro.com/table_of_contents_finance_dubai_dec2010.htm
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Guiding for Organizational Intelligence Research M. I.C. Rachmatullaha a
Jurusan Manajemen Informatika,Politeknik Pos Indonesia Jl. Sariasih 54, Bandung 40151, Indonesia
Abstracts The Organizational intelligence is “an organization's capability to process, interpret, encode, manipulate, and access information in a purposeful, goal-directed manner, so it can increase its adaptive potential in the environment in which it operates. The discussions about organizational intelligence has been carried out in very diverse meanings, although all of them refer to the term “ability” or “capability”. The diverse meanings and understandings give an opportunity for researchers to investigate them more deeply and comprehensively in order to get better and more complete understanding. Organizational intelligence has become a popular topic recently in business and academia and has attracted many researchers and practitioners from different fields. However, many studies in such different disciplines and perspectives cause diverse interpretation to organizational intelligence. As a result, it presents a discrepancy resulting in disorder in the organizational intelligence literature. Since there is still no solid theoretical guidance (it is possible to result either new theory or enlivening theory), the complexity of the nature of organizational intelligence, the importance role of the participants, and the social process of organizational intelligence justify and lead the use of grounded theory as an appropriate method. Therefore, to investigate organizational intelligence it is argued that the adequacy of theoretical guidance cannot be expected to come from the extant theories, because there is still no solid theory discussing about organizational intelligence deeply and comprehensively.
© 2014 M. I.C. Rachmatullaha. Published by Telkom Pub. Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia. Keywords: organizational intelligence research, lack of solid theory, grounded theory.
1. Introduction Nowadays, the external environment of the organization is undoubtedly more dynamic and unpredictable, making it very difficult for companies to avoid turbulences hindering their activities. Unavoidably, contemporary organizations must face the rapidly changeable events in economic, technological, social, cultural, and political environments. Their survival definitely will depend on their ability to adapt to the changing environment. At the interface between the internal field and the external field forces, the companies should maintain a dynamic equilibrium. Organizations that successfully react to a dynamic and usually an inimical trade ambiance depend on their ability to provide relevant information and to find adequate solutions to the problems they face. As a result, they must be able to develop new capabilities and to build flexible structures, thus winning core competences (Prahalad and Hamel, 1990; Vasilache, 2007). The terms “ability” and “capability” are related to “intelligence”, in the sense that organizations should have appropriate intelligence to face changes and complexity in the environment. This intelligence is called “organizational intelligence” (Akgun, 2007;Bratianu,2006; Cakir,2008; De Angelis, 2013, Glynn, 1996; Saeed et.al., 2014; Simic,2005; Vasilache,2007), that is one of the new and powerful competitive capabilities (Vasilache, 2007). One of the definitions of organizational intelligence(OI) is “an organization's capability to process, interpret, encode, manipulate, and access information in a purposeful, goal-directed manner, so it can increase its adaptive potential in the environment in which it operates (Glynn, 1996).” The importance of organizational intelligence as a source of competitive advantages is more obvious in the first decade of the twenty-first century. For instance, it can be viewed in the following citation: “Knowledge has values, but intelligence has power. This is a key lesson as we move from New Economy to Next
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Economy. The New Economy concerned itself with managing the enterprise, the firm’s knowledge assets, and competitive knowledge. The Next Economy demands that all this be merged into a capability fostering the creation of actionable intelligence. At minimum, better managing all aspects of an organization’s knowledge base can fortify strategic decision-making. At maximum, it can generate defensible competitive advantage through intelligence, a sustainable source of above-average return (Rothberg and Erickson, 2005).” The study about organizational intelligence concerning the complex organization was initiated by Wilensky in his book in 1967 “Organizational Intelligence: Knowledge and Policy in Government and Industry” which mainly dealt with the mentality and its machinations that distort and omit data necessary for decisions. His examples were drawn from the failures of military intelligence; the Central Intelligence Agency (CIA) and the Federal Bureau of Investigation (FBI); the administration of justice; industrial management; social welfare decisions; and even the 'intelligence' required for sanity hearings. From the time Wilensky has published his book until now, the discussion about organizational intelligence has been carried out in very diverse meanings, although all of them refer to the term “ability” or “capability”. These differences, for example can be viewed from what they emphasize in organizational intelligence: information processing to get appropriate decision making (Wilensky, 1967), competitive intelligence (Rothberg and Erickson, 2005), business intelligence (Silber and Kearny, 2009), artificial intelligence (Kim, 1995; Unland, 1994; White, 2008), and so forth. That the discussions of organizational intelligence remained very diverse meanings and understandings give an opportunity for researchers to investigate them more deeply and comprehensively in order to get better and more complete understanding. Furthermore, the importance of organizational intelligence also stimulates researchers to explore it. This can be evaluated by analyzing the relationship between organizational intelligence, learning, knowledge, and innovation as summarized in table 1 below: Table 1. The importance of OI Authors (Cook and Yanow, 1993; Bonthous, 1996; Glynn, 1996) in Kalkan 2005 (Nevis et al., 1995; Glynn, 1996; Halal, 1997; Schwaninger, 2001; Akgün et al., 2003) in Kalkan 2005 Kalkan 2005
Simic,2005 Halal, 1997 Bencsik, 2009
Maranon, 2000
Senge, 1990;Walsh&Ungson, 1991; Weick, 1990 in Glynn, 1996 Senge (1990) in Glynn, 1996
Explanation OI is required for organizational learning to occur and organizational innovation to be generated OI refers to the capacity of a corporation as a whole to gather information, to generate knowledge, and to act effectively based on the knowledge it has generated in order to adapt to the environment surrounding the organization OI is a key enabling force underlying many vital activities and processes dominating organizational life, the processes of knowledge acquisition, new organizational knowledge creation, and knowledge utilization all of which require OI OI comprises combination of knowledge, experience, consciousness and understanding in organizational problem OI is the capacity of an organization to create knowledge and use it to strategically adapt to its environment or marketplace The tools of information technology supporting acquisition, storage and use of information and organizational learning as well as knowledge come into being as a result of it, fixing and storing of knowledge in the memory of a company play an important role in the intelligence of organizations and competitiveness of a company Intelligence could be labeled natural or potential. Furthermore, we should include another type of intelligence, that which we identify by means of IQ tests, a combination of the potentiality and the knowledge acquired in the first years of life and early education Implicitness in theories of organizational cognition, such as organizational learning, memory, and sense making, is intelligence, for without it an entity cannot learn, remember, or process information effectively. Intelligence is implicitly at the core of the learning organization; it is what enables a firm to learn from its own experience and the experience of other firms.
From table 1 above, it can be seen the importance of organizational intelligence in the life span of organizations. In the early stage, organizational intelligence can be assumed as a natural or a potential feature that exists when the organization is founded. With the initial intelligence, the organization can learn or generate innovation in order to adapt to the environment and to solve the problem. Without intelligence, the organization cannot learn, remember, or process information effectively. By learning, the organization can get and develop new knowledge. Moreover, by learning and using current knowledge and experience, the organization can improve the intelligence. In other words, intelligence, learning, and knowledge cannot be separated each other in the life span of the organization because intelligence is their core. They form a continuous cycle to increase the organization’s performance. Organizational intelligence is one of the important concepts determining the existence of organizational learning process and knowledge in its early stage. Thus the relevance to investigate the organizational intelligence has been established, but do we know what it is? To understand it, therefore, we need to know how we are going to answer this question.
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2. A Framework to Understanding Organizational Intelligence At the initial step in exploring and investigating organizational intelligence, we use metaphor by relating organizational intelligence with human intelligence. Intelligence comes from the Latin verb intellegere, which means 'to understand'. There are many definitions of intelligence, e.g.: ability to adapt effectively to the environment, either by making a change in oneself or by changing the environment or finding a new one (Encyclopedia Britannica, 2006); the ability to acquire and apply knowledge and skills (Compact Oxford English Dictionary, 2006). From psychologists’ view, intelligence can be defined as the followings: the ability to solve problems, or to create products that are valued within one or more cultural settings (Gardner, 1993); the global capacity to profit from experience and to go beyond given information about the environment (American Psychological Association). For such a long time, many researchers emphasize on the rational intelligence/RI (Spearman, 1904, Cattel 1943, etc.). This attitude is a legacy of the early 20th century when psychologists designed tests whose primary objective was to measure intellectual or rational intelligence (used to solve logical problems). In the mid-1990s, Daniel Goleman revealed findings in neuroscience and psychology focusing on the importance of Emotional Intelligence/EI (Mayer et.al., 2000; Goleman, 1995). This intelligence triggers empathy, motivation, compassion and ability to respond skillfully to pleasure and pain. Goleman argues that EI is a basic requirement for the use of RI. By the end of 1990s and early 2000s, Zohar and Marshall (2000) introduce a new dimension to human intelligence, namely spiritual intelligence which they claim as the ultimate one (Zohar & Marshall, 2000). Spiritual intelligence is an ability to access higher meanings, values, abiding purposes, and unconscious aspects of the self and to embed these meanings, values, and purposes in living richer and more creative lives. The transformative power of SI distinguishes it from RI and EI. RI primarily solves logical problems whereas EI allows people to judge the situation and behave appropriately. Additionally, SI enables people to ask themselves how they will react in the first place when they are in a particular situation. As individuals have three types of intelligence (RI, EI, SI), the next question to pose in is whether or not organizations exhibit the same character as human being in terms of intelligence. Before answering this, it is wise to concern about the following statement: “organizations have multiple dimensions of competence” (Albrecht, 2003; Stalinski, 2004). Competence is related to the ability or the capability which both are related to the intelligence. Organizational intelligence should be regarded as a construction composed of different components. For example, perception, cognition, memory, learning, communication, reasoning, culture, information processing, and behavior flexibility are proposed as organizational intelligence components in the literature (Kalkan, 2005). Although all of these authors agree that organizational intelligence consists of many components, but each author conveys these components in a very diverse meaning which undoubtedly confuses their readers. In order to avoid these confusions, a framework is significantly needed to integrally and comprehensively discuss organizational intelligence. One of the frameworks that is worth applying to analyze organizational intelligence is the General System Theory (GST) framework introduced by Bertalanffy in 1930s. According to Bertalanffy, all scientific phenomena in both natural and social science form a hierarchy: societies (organizations) contain groups, groups contain individuals, individuals comprise of organs, and so on. Each hierarchy has its own unique characteristic and is also incorporated with all the characteristic of lower level. For instance, Gant and Agazarian (2004), by using GST as the basis of their study, develop System-Centered Theory (SCT). It defines a theory of human living systems that provide foundation for understanding the dynamic system which is isomorphic to individuals, groups or organizations, and all forms of living human systems. The two major basis in SCT are hierarchy and isomorphy. SCT defines hierarchy as every system in a specified hierarchy that exists in the context of the system above it and is the context for the system below it; whereas isomorphy is defined as similarity in structure and function. In addition, Glynn (1996) and Akgun (2007) posit a framework to analyze organizational intelligence based on GST by stating that intelligence can be considered as multiple levels of analysis: individual, group, or organization. Glynn adopts the multilevel framework outlined by Glynn et.al. (1994) to examine intelligence at both the individual and the systemic levels and to observe the interrelationship of these levels. All in all, according to Akgun (2007), Gant & Agazarian (2004) and Glynn (1996), organizational intelligence can be analyzed based on individual intelligence. There are some basic assumptions in adapting individual intelligence to organization (Glynn, 1996; Akgun, 2007; Cakir, 2008):  First assumption is the functional similarity between individual and organizational intelligence. Like individual intelligence, organizational intelligence can be defined as the capacity of processing information towards the goal, interpreting it, decoding it, and transforming it ;  Second assumption states that “organizational intelligence is adaptive”, thus organization can improve its adaptive potential in the environment;  Third assumption postulates that organizational intelligence offers an explanation for an experiential learning process emphasizing on organizational success and failure With these three basic assumptions, both individual and organizational intelligence have similarities; however they are not
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proportionally equal:  As a collective property, organizational intelligence is a result of social process (the result of interactions among individuals) (Glynn, 1996).  Organizational intelligence does not represent the “intelligence” of managers, similar to managerial cognition, nor is it the sum of the individuals (Akgun, 2007; Simic, 2005). Since organizational intelligence is not identical with, but related to the intelligence of its membership, mechanisms that relate individual and organizational intelligence; they are considered. Based on the examination of the link between micro level and macro level processes, Glynn (1996) identifies the following three types of mechanisms that facilitate the channeling process from individual to organizational intelligence: aggregation (e.g. individual members’ intelligence accumulates to become organizational intelligence), cross-level transference (e.g. individuals’ intelligence is transformed and codified as organizational intelligence), and distribution (e.g. organizational intelligence is embedded in the structured patterns of thought and action in which organizational members interact and engage). Each of these mechanisms is built on a different set of theoretical assumptions and has implications for the way in which organizational intelligence is measured. However, Akgun (2007) does not agree with the mechanism proposed by Glynn (1996). He is more inclined to the structuration theory suggested by Giddens (1984) to explain the mechanism of organizational intelligence. Organizational intelligence can be actualized by the reciprocal interactions between human agency (individuals) and the structure of social systems (organization). Based on the explanation above, it can be concluded that understanding and assessing individual intelligence is important to understand organizational intelligence. Therefore, investigation on intelligence at organizational level can be done based on individual intelligence. Moreover, this matter is supported by mechanisms proposed by Glynn (1996) and Giddens’ structuration theory (Akgun, 2007). Nevertheless, we cannot adapt the individual intelligence to organization intelligence directly because organization is a collective entity (a result from interactions among its members). To sum up, organizational intelligence has recently become popular topic in business and academia and has attracted many researchers from various fields of study. Because of such different disciplines and perspectives, the interpretation of organizational intelligence shows a discrepancy, resulting in disorder in the organizational intelligence literatures (Akgun, 2007; Bratianu, 2006; Dayan, 2006, Degraves and Marquina, 2012; White and Djebarni, 2008). Although there are any extensive individual intelligence literatures and can be made as foundations, they are still not enough to lead to organizational intelligence understanding. Nevertheless, the organizational intelligence literatures themselves also have been under investigation. Therefore, many studies in organizational intelligence remain unsolved matters that should be investigated in further studies in order to provide the scholars an opportunity to study more deeply and comprehensively, especially in the specific area. In order to provide a guidance to investigate organizational intelligence, we proposed an integrated framework. This proposed framework is compiled in order to reduce misunderstanding about organizational intelligence, because prior researches remain as confusions and incompleteness. These confusion and incompleteness mainly relate with the mapping between the dimensions of individual intelligence and the dimensions of organizational intelligence. In addition, it also relates with the mechanism of how individual intelligence becomes clear organizational intelligence that maps each mechanism with each aspect of intelligence; whether each aspect refers to these mechanisms or each aspect refers to different mechanism or even the mixture of them. There are sequential steps to investigate organizational intelligence in an integrated framework: 1. Choose the organization for the object of research, whether a service organization or a manufacturing organization, whether public organization or private organization. 2. Investigate the dimension of individual intelligence in chosen organization 3. Investigate the dimension of organizational intelligence in chosen organization 4. Investigate the mechanism of how individual intelligence becomes organizational intelligence in chosen organization 5. Investigate the flow of organizational intelligence among subsystems in chosen organization.
3.
Methodology
Organizational intelligence has become popular topic recently in business and academia and has attracted many researchers and practitioners from different fields. However, many studies in such different disciplines and perspectives cause diverse interpretation of organizational intelligence. As a result, it presents a discrepancy resulting in disorder in the organizational intelligence literatures (Dayan, 2006). Therefore, to investigate organizational intelligence it is argued that the adequacy of theoretical guidance cannot be expected to come from the extant theories, because there is still no solid theory discussing about organizational intelligence deeply and comprehensively. Although there are many theories and frameworks from prior researches, it can be argued that setting them aside could be considered. Therefore, we do not use the
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existing theory to guide us to perform this research. Related to the availability of a solid theory, the result of this research has possibility to produce a theory that is truly different. Besides being lack of solid theoretical guidance, the nature of organizational intelligence itself is very complex which then increases the complexity of the research in organizational intelligence. The complexity of organizational intelligence lies on the following aspects: 1. The future and the past are uncertain: The future is uncertain because different people in an organization often anticipate dramatically the different futures. The past is also uncertain, because it still remains to be realized but because it is dimly, inaccurately, or differently recalled. 2. The problem of conflict: Organizations seek intelligence in the name of multiple, nested actors over multiple, and nested time period. The preference or identities embraced by some participant are inconsistent preference or identities of other participant. 3. The problem of ambiguity in the evaluation underlying an action: The preferences to be pursued or the identities to be enacted are usually assumed to be clear, stable, and exogenous. In organizations, in fact, they are typically neither clears, nor stable, nor exogenous. The absence of solid theoretical guidance, the complexity of organizational intelligence, and the need to understand organizational intelligence make researchers explore this topic from the main source, namely the employee of the organization (participant). The relevance of research is not only valued through the selection of topic but also depends on to which the perspective of organization employees are included in the process of the research. Intelligence is one of those concepts that everyone has in mind, so the information regarding organizational intelligence that is based on individual intelligence is inseparable from the experiences, perceptions, and perspectives of the participants. In order to integrate the individual intelligence and the organizational intelligence, a social process is needed as a result of interaction among all of members of the organizations. Since there is still no solid theoretical guidance, the complexity of the nature of organizational intelligence, the importance role of the participants, and the social process of organizational intelligence justify and lead the use of grounded theory (GT) as an appropriate method (Glaser and Strauss, 1967; Glaser, 1978; Glaser, 1992; Glaser, 1998). Glaser does not provide systematically the reason why GT is appropriate as research methods for the development of process theories in a specific domain. Fortunately, many authors provide the reasons of using GT (Locke, 2001; Martin and Turner, 2006; Parry, 1998), they are: 1. Capturing complexity GT is well to capture complexities of the context in which action unfolds, enabling researchers to better understand all that may be involved in particular substantive issue (Locke, 2001). Similarly, Martin and Turner (1986) argue that GT is suited to incorporate the complexities of organizational context-rather than ignore or simplify them-to produce accurate or useful result. This reason is in line with the argument that researchers who use GTA want to discover what the problem is and what processes account for its solution, rather than assuming what should be going on, as required in preconceived types of the research (Glaser, 1978). 2. Linking well to practice GT has proven to be especially useful to help organizational members gain a perspective on their own work situations (Locke, 2001). Turner(1983) has used GT to study organization for more than a decade because it has enabled him to “ produce theoretical accounts which are understandable to those in the area studied and which are useful in giving them a superior understanding of the nature of the own situation”. The argument mentioned by Locke and Turner is closely related to the idea that, due to its distinguishing explanatory power, GT offers practitioners a new understanding and control over their actions (Glaser, 2001), as it puts a high premium on the relevancy of their experience (Glaser, 1998). 3. Supporting the theorizing of ‘new’ substantive area According to Locke (2001), the use of GT is seen as supporting theorizing of ‘new’ substantive areas, because the naturalistically-oriented data collection methods in addition to the theory-building orientation permit the investigation and theoretical development of new substantive areas as they arrive on the organizational scene. It is in line with the direction provided by Glasser (1978), especially in chapter 10, “New Direction in Grounded Theory”. 4. The substantive area is a social process Parry conveyed that GT is appropriate to study the social process. This argument is in line with Glaser, that the focus of grounded theory is the identification of the basic social process, the nature of which is the subject of the derived theory (Glaser, 1978, chapter 6). Glaser (1992) has observed that grounded theory, in particular, is useful to “researchers and practitioners in the fields that concern themselves with issues relating to human behavior in organizations, groups, and other social configurations.” Based on the four reasons above, we consider GT is appropriate for investigating organizational intelligence framework.
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4.
Conclusion
This paper is a conceptual paper to give a guidance for investigating organizational intelligence in an integrated framework. But until now there are no authors that discuss organizational intelligence in integrated framework, at least to see the connection or relationship between individual intelligence and organizational intelligence. Therefore, we propose an integrated framework to investigate organizational intelligence in sequential steps: choose an appropriate organization, investigate the dimensions of individual intelligence, investigate the dimensions of organizational intelligence, investigate the mechanisms that connect individual and organizational intelligence, and the flow of organizational intelligence among subsystems in organization. Since there is still no solid theoretical guidance, the complexity of the nature of organizational intelligence, the importance role of the participants, and the social process of organizational intelligence justify and lead the use of grounded theory as an appropriate method in investigating this framework.
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LINKING G EMPOW WERING LEADER RSHIP AN ND CREAT TIVITY: T THE INFL LUENCE TO ORG GANIZAT TION CA APABILIT TY AND ORGANIZ O ZATION P PERFORM MANCE a
Prof. Dr.M Muhtosim. A ,Yerki Tegu uh Basuki
b
c , Kusiyah K
a Kusum ma Negara Busineess School, Cijanttung, Jakarta, Indo donesia, email : ch [email protected] ahoo.com b Kussuma Negara Bussiness School, Cija jantung, Jakarta, Indonesia,email In : [email protected] y ail.com c Kuusuma Negara Bus usiness School, Cijijantung, Jakarta, Indonesia, I email :[email protected] : o.com
Abstract A s of the im mportant role off the creativity competencies c and a the leadershhip, related to the t organizatioon This paper proviides empirical study caapabilities, and organization performance. p Th he research is aan empirical stu udy to the 30 FMCG F industriies in Indonesiia. The creativitty co ompetencies off the leader havve a significantt impact to the leadership com mpetencies to improve the orrganization cap pabilities and thhe orrganization perrformance. The result of the sttudy proven thhat creativity co ompetencies hav ve strong impa pact to increasiing organizatioon peerformance thrrough improvinng the leadersship competenccies and organ nization capab bility, while thee leader have a less creativitty co ompetencies im mpacted to the declining of the t organizatioon capabilities and leadership itself. This rresearch is verry important for fo bu usiness practitiioners in orderr to build org ganizational cappability throu ugh increasing leadership annd creativity competencies c t to im mprove the perrformance of the t organizatio on. While the research apprroach may limiit generalizabillity, for researrchers this studdy veery useful in pproviding an exxplanation of the t importancee of creative caapabilities in leeadership, so it can be develop ped into a theorry off leadership thaat is needed currrently in orderr to improve thee performance of o the organizatiion, and further developed in other o industries.
© 2014 Muhttosim A,Yerkki Teguh Bassuki, Kusiyah ah. Published d by Telkom Pub. Ltd. Selection andd peer-review w under respo onsibility of T The ISCLO, Department of o Communiccation, Univeersity of Telkom, T 203422 Bandung, Indonesia I . Keywords K : Creattivity, Leadershhip, Innovation Culture, C Organiization Capabiliity, FMCG (Fasst Moving Consu sumer Good).
1..
Introducttion th
Iff Indonesia w will success too address econ nomic challennges such as the threat of inflation, it w will become the t 11 -largest ecconomy in thee world, and potentially p thee next Brazil.(( Elkhweet, ett.al.2013, Bain n and Compan any). Related to t this researcch frrom Bain and Company in 2013, 2 the fivee challenge to be succed in the Indonesia market are; bbe clear on wh here and how to t win, w deeply unnderstand of thhe Indonesian n consumers, aattain the righ ht distribution coverage to rreach target consumers, c annd win w the battle ffor new consum mers at each point p of sales... The T FMCG m main challenge is to compette and win off this issues in i above, they y should be ffocus on ; traanslating global brrands for eachh local markeet, managing relationships with multiplee local retaileers, all of whhom are comp peting with onne an nother. So rellated this straategies they have h to underrstand of cultture, a complex organizatiional structuree and effectivve leeadership.( Haay Group, 20133). The T Conventioonal FMCG strategies will be increasingg risk; granullarity is key companies c thaat stick to bu usiness-as-usual ap pproaches willl be increasinngly at risk. They will no loonger succeed d if only impleemented of “ccopying and pasting” p the olld sttrategies into new situationns. They havee to develop a granular un nderstanding of the world around them m, and plan thhe op perations strattegy to compeete in it. First, they have to understand th he dynamics of o their segmeents (e.g., theirr labor, energyy, orr innovation inntensity), and how new tren nds play againnst those requirements and will have the potential to reedefine sourcees off competitive advantage (M Mayinka at.al.; Mc Kinsey G Global Institutee, November 2012). 2 The T organizatioon capability of adressing this situation is call a dyn namic capabiliity, as per Teeece, Pisano & Shuen, 19977, th his capability defined as thhe ability to integrate, buuild and recon nfigure intern nal and externnal competenccies to addresss
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rapidly changing environments. This organization capability will helps to formulate business strategy in providing a competitive advantage to organization in order to improve organization performance. Leadership role in an organization is very important in achieving of organizational goals in order to achieve a competitive advantage and business sustainability. The creative leaders are needed in leading the organization to ensure that the strategy will be implemented effectively. Tierney et al. (1999) found that effective leader have a strong relationships with employee creativity. (e.g., Amabile et al., 2004; Madjar et al., 2002; Oldham & Cummings, 1996; Tierney & Farmer, 2002, 2004). According to Makri and Scandura’s (2009) findings, “operational and creative leadership characteristics are effective predictors of innovation productivity and quality to help business sustainability. In this paper will assess the role of the leadership and creativity to the operational of organization through dynamic organization capability and innovation culture in an enhancing the business performance, hopefully this paper will be help the business practitioners in improving business competitiveness and performance of their business. Also for the scholars, expected will deeply analyzed for next study of leadership, organization capability and a culture of innovation factors in both of similar industries and or other industries. 2.
2.1.
Literature Review
Creativity and Leadership
General leadership, by another widely cited definition, consists of strategic vision coupled with the ability to influence and motivate others through the systems, processes and culture of an organization (Kotter, 1990). In this paper we use the notion of leadership as transformational leadership. The term ‘transformational leadership’ was first coined by Burns (1978, p. 20) who described transformational leadership as an interaction where leaders and followers raise one another to higher levels of morality and motivation. Transformational leaders tend to affect their followers by linking their followers selfconcept with the organization’s mission and transforming their values and self-esteem in a way that encourages follower loyalty and respect toward the leader (Kark, Shamir, & Chen, 2003). In return, followers sacrifice their self-interests in favor of organizational objectives, show more willingness to contribute toward achieving organizational goals and strive not to disappoint their leader (Bass & Avolio, 1993; Chen, 2002; Yukl, 2002). A lot of definition of transformational leadership proposed by the Authors, in the paper will be used the transformational leadership by Avilio & Bass (1985, 2004), and Burn (1978), which is transformational leadership as that which “occurs when one or more persons engage with others in such a way that leaders and followers raise one another to higher levels of motivation and morality”. The leader exudes power and impacts followers through visionary of the future, which has four components capabilities, those are: idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration. The other of the essential elements of the high performs individual, team and organizational achievement is creativity (Basadur, 2004). The creativity is 'mindset' of individuals and organizations, which every day always contributes to the creativity and energy of individuals, teams and within the organization (Rickards & Moger, 2000). West-Burnham (2008) define the creativity in terms of: (i) the use of imagination, insight and originality; (ii) the development of a different product, process or outcome; (iii) the addition of value to an existing product or process; (iv) the use of higher order skills, knowledge and qualities; (v) and the potential to make a difference, to improve, enhance or enrich the organization. While the leadership is primarily about influence and change. Creative leader will be able to set the tone, the situation and the conditions in which creativity can be growing (Stoll, 2007, 2008). Creative leadership is a form of service leadership' where the main task of leadership is connecting people, ideas and different ways of thinking. It is leadership that develops the ability and capacity of all people in the organization so that creativity, wherever it occurs in any scale, can be captured, supported and enhanced.( Harris, Alma :2009). Creativity has the capacity to break conventions, the usual way of thinking, to allow the development of a new vision, an idea or a product. The creativity is closely linked to the nature of artistic contribution as expressed in art or cultural productions. (Janáková, Hana:2012) Fangqi (2007) classified the stage of the management history by five stages, there are : Stage 1: 19th–20th Century: Rational Management (USA Fordist and Tayloristic contributions provide Production line efficiencies). Stage 2: Early 20th Century: Incremental innovations (Japanese Total Quality approaches with structural sub-groupings provide further efficiency gains). Stage 3: Mid-20th Century: Humanistic experiments (European and American efforts to achieve individualized motivation within organizations and for welfare of employees). Stage 4: Late 20th Century: Organizational Creativity (Institutional efforts to achieve more creative organizational practices and results).
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Stage 5: 21st Century: Creative Management (Globalized efforts achieve better diffused and integrated knowledge transfer of creative theories and practices) Creativity Management is used to describe an alternative approach for business processes, like a strategy development and organizational change at the operational level, the development of new products and innovations and their introduction into the practice (Janáková, Hana:2012) In this paper we will use the term of creativity, is an organization capability to challenge the basic assumptions everytimes, and always learning of new methods by providing training to other leaders, improve the ability to persuade and influence, as well as using a variety of effective communication ways to ensure success of the organization. (Marianna Makri and Terri A. Scandura, 2009).
2.2.
Organization Capability
The Organizational capabilities, is an organization capabilities to deal effectively in a firm-specific way with key organizational problems (Dosi, Nelson and Winter 2000). Capability the organization rather stable; they did not change quickly. Capability the organization gave the company a competitive advantage distinctive, because it has been applied and further developed over a period of time. The condition right now has to change due to the high pressure from the outside like rapidly changing the markets and increasing of the market competition. So the organizations h a v e to change rapidly to adapting the changing environmental condition, this capability namely is a dynamic capability. The dynamic capability reflecting the ability of firms in creating and sustaining competitive advantage, and as such they may be possessed only by organization that are able to build their own internal and external competences. They are characterized by integration, up building and reconfiguration of strategic skills, while adapting to changing environmental conditions (Johanson, Whittington and Scholes, 2011). The studies of dynamic capabilities rooted in the resource base (RBV) of the company are developed by Barney (1986, 1991). This perspective has the concept that the combined resources of the organization as a difficult-to-imitate, were able to create a competitive advantage and contribute to the difference between the company's ongoing performance (Hoopes, Madsen and Walter, 2003). RBV theory of dynamic capabilities continue to examine the source of competitive advantage in rapidly changing market, and refers to the companies’ ability to integrate, build, and reconfigure internal and external competencies to address rapidly changing environments (Teece, Pisano and Shuen, 1997). Dynamic capabilities include strategic and organizational processes (Nelsonand Winter, 1982), such as product development, alliance formation and strategic decision making that are deeply embedded in the dynamic organization (Eisenhardt and Martin, 2000). Is consistent with dynamic capabilities from Teece, the study proposes a set of core components to capture of the effectiveness of undertaking the key processes of dynamic capabilities; these include sensing capability, seizing capability and integrative capability.
2.3.
Business Performance
Business excellence can be defined as “excellence in strategies, business practices, and stakeholder-related performance results (Adebanjo and Mann, 2008). Kaynack (2003) found that business excellece has a positive effect on firm performance, and give the benefit to organizations (Oakland and Tanner: 2008). Saunders et al. (2008), explained the beneficial organization adopted business excellence, is to identify: strengths and opportunities; guides the organization’s continuous improvement effort; co-ordinates a range of initiatives; provides an external measure of performance; educates staff on the characteristics of successful organizations; allows companies to become “world class”; improves organizational performance; allows benchmarking against others. Business performance measurement and control systems are the formal, information-based routines and procedures managers use to maintain or alter patterns in organizational activities (Simmons 2000). Business performance was measured by perceived financial and market performance (Wu, Yeniyurt, Kim, & Cavusgil, 2006). 3.
3.1.
Methodology Approach
Methodology Approach and Hypothesis
The methodology approach for this paper we can see in the “Figure.1, in below :
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Prof. Muhtosim M A / Proocedia ISCLO 000
Figure 11: Methodology approach a
3.1.1. 3.
Leaadership And Organization O Capability C
Creating C and m maintaining optimal o organ nization requiires a commiitment of outtstanding leaddership. The main ways of o op ptimization organization caan be exploreed by optimizzing the right leadership. Basically B the lleader is unab ble perseverinng orrganization w without investm ment and chan nge the mindseet of people. In n other words, leaders needd to make optimization of thhe cu ulture and cappability of the organization in order to maaintain an optiimal organizattion. a of 523 organizattional memberrs in Pakistan.. Their findinggs showed thaat leadership is Study from Ahhmad Tipuet. al.(2012), po ositively relatted to organizaational culturee and innovatioon capability. So the hypoth hesis is :
H1 H : Leadership hip competenciies have positiive impact to th the organizatio ion capability 3.1.2. 3.
Leaadership And Creativity C Com mpetencies, annd Organizatioon Performancce
The T Leadershipp has been stuudied for num merous centuriees by hundred ds of philosop phers and acaddemics, each with w a slightlly diifferent perspeective. Leaderrship is defineed as the act oof influencing others by pro oviding purpoose, direction and a motivatioon while w seeking tto accomplish the mission an nd improvemeent of the orgaanization (Ruv volo, Petersonn & LeBoeuf, 2004). Study from Haana Janáková (2012), creattivity is not oonly the condiition for innovation, but allso as a core of competitivve mporary orgaanizations. Creeativity and crreative manag gement influen nces business processes an nd the way how w faactor in contem co onduct busineess process maanagement to increasing the performance (Brettel, 2011 1).
H2: H Creativity its moderating ng of leadership ip and organiza zation capabilit ity The T study from m Cannock, Frrancisco Javieer Leon (2012)), explores thee influence off Novatel's firm ms in Mexico has significannt co orrelation betw ween leadershhip, the develo opment of its bbusiness modeel, and firm peerformance.
H4: H Leadership ip has significaant correlationn to the organiz ization perform mance 3.1.3. 3.
Orgganization Cappability and Peerformance.
Organization O capabilities, is the organizattion activity oon an on-goin ng basis using more or lesss the same tecchniques on thhe saame scale to support existiing products and a services ffor the same customer pop pulation (Helffat and Winteer, 2011), in an a en nable the orgaanization to make m a living in the presennt (Winter, 20 003), and to perform p of thee organization n it self. Whille dy ynamic capabbilities, on thhe other hand d, are directedd towards straategic changee and aligningg the organizzation with thhe en nvironment (Z Zahra et al., 20006). o Study from Raalf, et.al. (20113), of organizations from Dun & Bradstreet’s database (n=2,747)), which is reepresentative of d capaabilities, impaacting the posiitive directly rrelated to firm m performance, laarge Australiann firms. The findings that dynamic moderating m by organizationaal competenciees and the righht organization nal structure.
H3: H Organizati tion capabilityy have an positi tive impact to bbusiness perfo formance
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4.. Research F Finding & Diiscussion This T study useed a random sample s of FM MCG industriees, who are th he member in GAPMMI reegistered in In ndonesia. From m th he 150 industrries which prooduce the FM MCG as our poopulation, we have received d the 32 quesstioners, all qu uestioners werre reeceived via em mail, and we were w found tw wo incomplete results wheree the respondeents did not annswer some off the questionns. The T two incoomplete answeered were rejeected and onlyy 30 questionn naires were acccepted and uused for furtheer analysis. Thhe FMCG categoory is selected in medium wiith the employyees more than n 99 peoples. MCG’s compaanies questioners received, w we analyze wiith the Smart PLS P with the results as belo ow. From the 30 FM The T validity haave been donee with results of o the loadingg factors for all indicators >0.5 > and the reeliability test of all variablees haas tested, by measuring thee Cronbach Alpha, A with reesult in 0.857 to 0.951, wh hich all the reesult >0,6. An nd the detail by b vaariable resultss can be shownn in table 1, in n below:
Cronbachs Alpha A 0.935651
Leadershiip Orrganization Caapability Organizatiion Performan nce Creativityy
0.934776 0.857883 0.951063
Tabble 1 : Reliability Test
Continue C to thee analysis of t-- statistic for teest the hypothhesis, the valuee of t- statistic of every varia iable relation of o this model will w be shown aas per Figure 2 in below :
Figuure 3: t- statistic value v
The result of t-statistic will w shown in Table 2 in bellow, the signifficant relationship if the t-sttatistic value with w > 1,96
Leaderrship -> Organizzation Capabiility Leaderrship -> Organizzation Perform mance Leaderrship * creativityy -> Organiization Capabilitty Organiization Capabilitty -> Organiization Performaance creativvity -> Organizattion Capabiility
Origin nal Samplle (O)
Samp ple Mean (M)
Sttandard Deeviation (STDEV)
Standard Errorr (STERR)
T Statisticcs ( O/STER RR )
0.4464 449
0.4699742
0.0 03117
0.03117
14.32323
0.2988 845
0.2988248
0.0 030348
0.030348
9.847423
0.5671 135
0.3566263
0.4 415277
0.415277
2.36568
0.1768 875
0.1777811
0.0 031381
0.031381
5.636402
0.0776 639
0.0788053
0.0 05388
0.05388
1.440972
Table 2: T-vallue for Hypotheesis evaluation
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From the t-statistic value, we have to conclude that the hypothesis which have t-statistic higher than 1.96 is accept and for tstatistic lower than 1.96 will rejected. So the results are: H1 : Leadership competencies have positive impact to the organization capability - accepted H2 : H3 : Creativity its moderating of leadership and organization capability - accepted Organization capability have an positive impact to organization performance - accepted H4 : Leadership has significant correlation to the organization performance - accepted In this result, we can develop the equation from this model of each variables are (1) creativity, will moderating leadership to giving significant relation to the organization capability, and (2) organization capability and leadership both significantly relation with organization performance, but they will supported each other to giving the significant relation to the organization performance, compare to the leadership independently. In other words, impact of leadership through the organization capability more significant relation to the organization performance, compare with the leadership directly. Creativity give the moderating effect on the relationship between leadership and organization capability significantly, but creativity did not significantly relation to the organization capability independently. Related to the leadership, what the leadership style is very important to the correlated the significantly to the organization performance, as per study from Malaysian SME’s, by Aziz, et.al. (2013), found that the impact of the leadership style are significant to the performance, so the selecting and developing the leadership style is an essentially important in the organization to increase the organization performance. 5. Conclusion The creativity, leadership and organization capability are essentially need to have in an organization, they will improving the organization performance, the role of creativity will moderation of leadership and organization capability relation. The leadership through organization capability has a stronger impact to the business performance, compare to the leadership independently. While the creativity independently did not have an impact to the organization capability, but the creativity have an moderating impact of leadership to the organization capability relation. The competency of creativity in organization has a very important role in improving the effectivity of organization's leadership in an organization's ability to grow, without the creativity management, leadership will less effective in developing the organization's capabilities. So that in this paper proved , that to boost leadership, creativity has a very important role or moderation of leadership. Now business leaders already knew the priority which should be improved which is leadership through creativity management, in a way to improving the business performance. For the researchers this finding also important to drive the future research of the leadership and creativity role to the others area of industries, and evaluate the correlation of other dependent variables. This research also will help others industries to adopt the concept to surviving from the external and internal pressures of the organization. The deeply and specific empirical study of this model still need to explore in the future research, so we can continuing develop the comprehensive model to improving the business performance.
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The ISCLO Conference 2014
The Effectiveness of Leadership Development Programs: Developing a Research Framework for the Oil Exploration Companies in Abu Dhabi Fazalur Rahman1, Mohmad Yazam Sharif2 1
School of Graduate Studies, Asia E University, Dataran Kewangan Darul Takaful, 50000 Kuala Lumpur, Malaysia, E-mail: [email protected] 2
School of Business Management, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia, E-mail: [email protected]
Abstract In this paper, the authors will explore the determinants of the effectiveness of Leadership Development Programs (LDP) in the literature and will then develop a research framework which is suitable to be used to study the phenomenon at the Oil Exploration Companies in Abu Dhabi of the United Arab Emirates (UAE). Leadership can be defined as the art and science of influencing others for the achievement of organizational goals and objectives. It has become a crucial ingredient in the success and growth of organizations in the world including UAE. With this in mind, the paper also aims to highlight the importance of designing appropriate LDP so as to prepare leaders for the future. Scholars have found that there are several reasons for the effectiveness of LDP in organizations namely the ability of the programs to develop leadership skills and core competencies as well as their ability to inculcate the understanding of complexities of the business among the leaders concerned. The paper will analyze critical factors that could influence the effectiveness of the LDP. This would include the external factors as well as the internal factors to the oil companies in Abu Dhabi. The development of the proposed research framework will form the basis for conducting a comprehensive study on LDP.
© 2014 Fazalur Rahman , Mohmad Yazam Sharif. Published by Telkom Pub. Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia. Keywords: Leadership Development, Leadership Program Effectiveness; Oil Companies Leadership Development
1.
Introduction to Leadership Development Programs (LDP)
The general objective of the UAE strategy (2013) is to “Invest in human resource capabilities and develop leaders” authors consider this as a lead and influence to today’s thriving companies and organizations investment in the young and fresh cohort of leaders that is considered critical in moving towards growth, development and sustainability over the long term. Designed for emerging leaders, LDP endows them with the various skills required to expand their leadership capacity, deepen understanding of core business functions, and improve the ability to lead cross-functional initiatives amid challenging global markets. Such programs inculcate required management and leadership skills within the individuals which make them competent in serving their professional work effectively and efficiently (Mabey, 2013). The LDP creates leadership skills within the individuals who possess the ability to bridge various levels of functions in the organizations. These skills and abilities enable the individuals to manage their work by aligning their personal objectives in accordance to the organizational mission and objectives by connecting strategies. These programs carry the spark to polish the potential within the individuals to grow more in their professional lives and also provide jobs with various exposures along with * Corresponding author. Tel.: +971-50-122 4143. E-mail address: [email protected]
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business skill development (Bartlett & Ghoshal, 2013). Therefore, it proves to be useful for both individuals and organizations in the long run. Conventionally, LDP is designed to develop leadership skills of the employees; despite the fact that people are not born with leadership skills, they carry the potential to develop and further fine tune their abilities and become charismatic leaders (Wang & Walumbwa, 2007). However, these programs are designed to polish the hidden leadership potential present in the individuals which helps them in preceding their careers in an efficient manner. Like all developing countries UAE too face challenges in planning their workforce to ensure continuity at all levels but in particular to the leadership levels (ADIPEC 2012). Therefore, the LDPs are planned and created for experienced first levelto-senior level managers of the organization, and executives responsible for leading staffs across the organization. They provide the individuals with the skills to connect the strategy with everyday work, and lead across functions and up and down of organizational hierarchy (Schein, 2010). These programs carry a great impact on the personal and professional growth of individuals as well as the organization (Mabey, 2013). The oil exploration companies in Abu Dhabi focus much on LPD as they believe in developing and training their internal leaders on their capabilities, which is also a Corporate Social Responsibility (FLC 2013). The management in these companies prefers to hire internally at the first place and then look externally for the required leadership level employees. Their concept is to train the existing employees depending on their potential and capabilities and turn them into a prospective leader. This strategy helps them in retaining the talented employees and it enables the employees to learn with on job trainings which become highly beneficial for their futures. This scenario leads to the research possibility and the research framework that authors have developed aiming to identify the factors that determine the effectiveness of LDP in personal and organizational contexts within oil exploration companies in Abu Dhabi.
1.1. Leadership Development Programs in Oil Companies of Abu Dhabi Abu Dhabi is the second most populated country of UAE and contributes immensely to the economy. Oil companies work as the backbone for the economy of UAE, as a whole. The state has intensely relied on oil economy as an adequate consumption of the country’s main resources tend to hire highly educated and talented individuals who could add more value to their companies along with increasing their revenues rigorously (Mezher et al, 2007). Abu Dhabi’s National Oil Company (ADNOC) is an incorporated organization that highlights a great deal on energy and oil. The primary objective of the oil companies is to find, extract and subsequently transfer the product to market through subsidiaries on national and international levels. The oil companies of Abu Dhabi have extensive operations performing primary errands such as exploration and production of oil, refining of oil and processing of gas. They endow the state with support services to market their valued products. Major companies of the world have joined hands with Abu Dhabi’s oil companies operations as well as countries economic and manpower development. Abu Dhabi has the most influential and effective market for oil and energy related sector. It is owned by the state in particular. The government evidently realizes the significance of oil and is highly investing on this sector for constant improvement (Dhabi, 2009). In accordance to Mezher et al, (2011) LDPs are designed from the organizational philosophy to translate the country and organization’s strategic plan into action. In this regard, the authors identify the organization as a Mediating Variable (MV) encompasses key performance indicators, recognition, learning methodologies, and translating learning into action. The government’s strategic vision and national development plays an influential role in the LDP, the government urges the country and their companies in translating their vision of effective leadership successfully in to action. Companies through various unique developmental approaches focus on developing the leadership competences within all levels of the organization. While the major aim and responsibility of the oil companies in Abu Dhabi is to develop long term and sustainable energy growth, it is also pivotal to develop the national leadership skill pool. The efforts of these organizations are concentrated on exploring and rigging of undiscovered areas to enhance their businesses not alone in the oil & gas also the leadership potential. The government clearly understands the importance of oil and is highly investing on this sector for constant improvement. However, the management of these companies felt a need of increased leadership with the changing dynamics of the industry. The companies open opportunities for individuals to learn and grow more through LDP in order to make them eligible and more learned (Schein, 2010). The management of these companies design LDP in order to train their individuals in alignment with their planned strategies to accomplish organizational objectives. These LDP are designed for leaders facing globalization challenges in the oil and gas industry like streamlining and consolidating, joint ventures and alliances with new market entry into politically unstable regions, the juggling of multiple global projects partners, and more.
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1.2. Competency Based Leadership Development Leadership Competencies are sets of [leadership] behaviors that are instrumental in engaging teams in delivering desired results. (Bartram et al, 2002). In the business environment, they are behaviors that support the attainment of organizational objectives. Leadership competencies are skills and behaviors that contribute to superior performance. Therefore, the focus here is on the behavior and not on the results or consequences of these Leadership factors within the oil exploration companies in Abu Dhabi. LDP initiatives are in line with international best practices and the strategic framework for leadership development that is in place with each of the company and is:  
Structured, with clear programs customized to company’s business, and differentiated by level with leaders assisted in transitioning between levels underpinned by competency frameworks including business and technical competencies as well as leadership/behavioral competencies
These Competency Frameworks are providing a seamless roadmap from Young Professionals and UAE national graduates all the way to Executive Leadership towards exhibiting the mandatory for managerial candidates to develop global markets awareness in accordance to the strategic objectives of the company. They also form the basis of people management and leadership processes and provide a common language for HOW they go about their daily work, while performance objectives describe WHAT they do (ADNOC 2014). Competency Framework will help to manage and improve performance and continue to build a better, more effective organization to ensure prosperity now and long into the future. Therefore, the authors define the organization as a MV in the research framework. 2.
Literature Review Methodology
The essential components of the research framework were derived based on the authors’ significant observation on the real work scenario and preliminary discussion with Mid-Level Leaders who have recently completed their LDP. This was further researched and refined through the literature review. Most of the Literature Review has been conducted online by obtaining the peer reviewed articles, previous researches in a similar context from database like, EBSCO, Emerald and Mendeley. Books and Periodicals were borrowed from company libraries. Literatures have been selected using various carefully defined search criteria in alignment with the research title and further categorized using “synthesis matrix” (NCSU 2006).Through this review the authors are able to define that the Leadership development is identified as a critical element for an organization's long term success (Collins & Horton, 2004).The impetus for this study comes from the United Arab Emirates context wherein substantial investments are being made to provide LDP to develop leadership skills of Emiratis working in the public sector, in accordance with the Dubai Strategic Plan 2015 (Dubai Strategic Plan, 2015). However, these programs predominantly utilize Western leadership development approaches, and tend not to consider the influence of national culture in their utilization - particularly in the selection, training, and professional development of leaders. Cultural influences are particularly important considerations in the leadership development in the UAE, since the country is characterized by unique cultural dimensions, and the development of leaders is a national priority. There is also evidence to indicate that contextual factors, particularly culture, might play an important role in the conceptualization of effective leadership, and would therefore have important implications for the design and content of LDP. The studies have mostly reviewed LDP effectiveness and present a conceptual framework, which identifies key contextual factors including national culture that might influence the design of LDP and their impact on the effectiveness of LDP. The conceptualization draws on the stream of literature relating to national culture and leadership, including the work of Hofstede (1980) and the Globe study (House 2004), as well as other contextual factors, including the unique context of governmental organizations. The study proposes theoretical and practical insights into the impact of contextual factors, particularly national culture, on the effectiveness of LDPs in a research context that has been little studied to date. This conceptual framework takes into account the cultural dimensions of a high-context country (UAE), as well as a public sector setting, extending LDP theory and providing a unique and significant contextual contribution. According to Carbone (2009), who declared that it is obvious from existing literature that just as leadership theories have appeared and developed over time, the concept of LDPs in organizations have also emerged. 3.
Research Methodology
After having evaluated various research designs, the mixed method research is proposed for the study. Bryman (2008) referred the term as a “multi-strategy research” to describe investigations combining quantitative and qualitative research
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and suggests that mixed methods is increasingly the preferred term and in many ways better expresses the fact that in many cases using both quantitative and qualitative research is justifiable. A more comprehensive definition is cited in the same by Creswell and Plano Clark (2007: 5) “Mixed methods research is a research design with philosophical assumptions as well as methods of inquiry. As a methodology, it involves philosophical assumptions that guide the direction of the collection and analysis of data and the mixture of qualitative and quantitative data in a single study or series of studies. Its central premise is that the use of quantitative and qualitative approaches in combination provides a better understanding of research problems that either approach alone”. The qualitative and quantitative approaches are widely being used in research of a broad spectrum of the social studies; these methods are employing both the questionnaires and interviews. Perhaps the most commonly used research method (Yuseif, 2010). Three approaches to research are frequently being adopted in accordance to the nature of the study. These approaches are quantitative, qualitative, and mixed methods research. Blaxter et al., (2010, p.59) examined the difference between the two terms: 'methodology' and 'method'. The term 'method' refers to a specific means of collecting data, whereas methodology refers to the strategies surrounding the use of the multiple methods of data collection as required by different types of attempts to achieve higher degree of reliability and validity. The above mentioned approaches contain their respective philosophical assumptions about knowledge claims, strategies of inquiry, and specific research methods. When the philosophy, strategies, and methods are integrated, they furnish a range of frameworks for conducting research. The choice of which an appropriate approach to be used is greatly based on the nature of the research problem, personal experiences, and the audiences for whom one seeks to write. It is useful to illustrate the major components of each research method such as their use of closed-ended versus open-ended questioning, and their focus for numeric versus non-numeric data analysis (Wu & Little, 2011). Knowledge claims
Type
Quantitative Post-positivist assumptions
Qualitative Constructivist assumptions
Mixed Pragmatic assumptions
Instrument
Questionnaires
Open-ended questions
Open/closed questions
Interview, document, and observational data. Narrative/observation
Multiple forms of data drawn from all sources
Inquiry design
Performance, observation, attitude, and census data. Experimental
Questions / interview
Approach
Measuring / rating attitudes
Field observation
Measures/ observations
Analysis
Statistical
Statistical/ opinion
Statistical and text
Data collection
Table 1: A comparison between the three research methods (adapted from Wu & Little, 2011)
The methodology of the study will be an exploratory qualitative design. There will be two research instruments to be used in this study: 1) the survey questionnaire and 2) the interview protocol. The survey questionnaire will have five parts: Part 1: Respondent Profile; Part 2: Types of LDP; Part 3: Effectiveness LDP; Part 4: The Internal Factors affecting the Effectiveness of LDP and Part 5: The External Factors affecting the Effectiveness of LDP. The questions in the questionnaire for Parts 3, 4 and 5 will be adapted from past researchers’ instruments. The researcher will interview individual participants of three different levels of LDP. Each semi-structured interview will be conducted after the completion of their respective programs and will last for approximately 45 minutes each. The interview protocol will have ten probing questions (open-ended) that will be asked of the managers in the organizations concerned. These interviews will be taped and transcribed and later analyzed.
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The Effectiveness of Leadership Development Programs: Developing a Research Framework for the Oil Exploration Companies in Abu Dhabi
3.1. The Research Framework The graphical representation of the research framework that will guide the study is as follows; Independent Variable Government
Mediating
Organization  Key Performance Indicators (KPI’s)
Individual
 Recognition  Learning Methodologies
Social
Dependent
Leadership Development Programs
 Translating learning
Fig.-1The Research Framework
This research framework highlights the government, individual and social elements involved in the effectiveness of LDP as an Independent Variable (IV). Following by, organizational measures and individual contributions like the key performance indicators, Recognition, Learning Methodologies and Translating Learning into Action are determined as Mediating Variables (MV). This research framework works as an interpretative lens in determining the relationship between the IV and MV and how it affects Leadership Development Program (LDP) which is framed as Dependent Variable (DV).
3.2. Factors Review A study by Black and Earnest (2009) introduced a comprehensive technique to assess and evaluate LDPs on a postprogram basis, measuring the outcomes at the individual, organizational, and community level. The authors built on an assessment framework called EvaluLEAD, originally introduced by Grove, Kibel, and Haas (2005), to create a comprehensive instrument called the Leadership Program Outcomes Measure (LPOM). Black and Earnest (2009) developed the LPOM in order to gain insights into program accomplishments and participants' outcomes. The outcomes of LDPs were determined by using the framework for the EvaluLEAD (Grove et al. 2005). While many evaluation mechanisms have been developed, there are some vital linkages missing, such as an integrative examination of cultural implications and contextual impact. Also, Fullard (2006) stated that one of the most powerful frameworks for evaluating the effectiveness of training programs, which has been used for forty years, has come from Kirkpatrick (1959). The Kirkpatrick model is based on four levels which are reaction, learning, behavior and results. Carbone (2009) employed Kirkpatrick's (1994) model and included group interviews, observations, and individual interviews with participants, their supervisors, peers and subordinates. The author conducted the evaluation at the first three levels of Kirkpatrick's model and provided a measurement of the results of the LDPs. As mentioned earlier, the first level of Kirkpatrick's model is reaction, and it was assessed based on the data given by participant interviews. During the interviews, participants were asked about their overall feelings of the program. The second level is learning and the outcome was assessed by asking participants about the core-competencies of the firm, particularly if they had any awareness of it. Transfer of training is the third level and it was assessed by determining the extent to which participants experimented with change and transferred knowledge after attending the program. The forth level which is results, was not conducted in Carbone's study. That's because of most training efforts are not able of directly impacting the forth level measures (Alliger, Tannenbaum & Bennett, 1997). In accordance with one study (Tyler 2002), companies evaluate training at the reaction level most often (78 percent), followed by learning (32 percent), behavior change (9 percent), and results (financial value) (7 percent). Although the Kirkpatrick model has been widely used, the model was criticized in the study of Holton (1999), who stated that it does not appear to be efficient in measuring the effectiveness of a leadership program. That's because of its emphasis on reactions in evaluation and neglected the use of the other levels. Dionne (1996) claimed that there is a significant complexity involved in evaluating the impact of training, and claim that this 'may be because of the lack of a unifying model and theory of research' (p. 280).
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While the literature on evaluation indicates that, although we can evaluate LDP effectiveness at multiple levels as suggested by Kirkpatrick, it may be necessary to contextualize the evaluation measures in view of the potential impact of various contextual factors, including culture, on LDP effectiveness. Finally, it is proposed here that the outcome of the evaluation itself can provide necessary feedback to improve the LDP effectiveness and sustainability of the newly acquired behaviors and skills, besides offering important insights into LDP evaluation. The factors that are Independent and Mediating will be researched to analyze the impact that creates on determining the effectiveness of LDP within oil exploration companies in Abu Dhabi; These factors, the sub-factors and its variable classification in the table – 1 below will be researched to determine the key factors that impact the LDPs in the Oil exploration companies in Abu Dhabi. Table 1 – Factors Review Determinants to Study
Government
•
Strategic Vision
•
Diversification
•
National Development
•
Learning Agility (Kornferry (2013))
Variable Classification
Government’s vision, economic diversifications (from Oil to Non-oil) compelling to set Emiratization Target/Leadership Development
Independent
•
Accountability
Goldstein & Ford (2002: 110) warn“ before trainees can benefit from any form of training; they must be ready to learn. Goldstein & Ford (2002) presented that beyond traditional motivation, willingness for personal change could improve the predictive powers of assessing training outcomes. Hofstede demonstrated that there are national and regional cultural groupings that affect the behavior of organizations and identified four dimensions of culture (later five) in his study of national cultures
Individuals
Social
Description
Sub – Factors
•
Translating learning in to action (Zenger et al 2014)
•
National Culture (Ilies et al)
Mediating
Independent
• Organization
Program Design / Provider
Leadership Development Philosophy (KPI's, Policy, Budget, Commitment/Sponsorship) (Baumgartel, Reynolds, & Pathan, 1984; Hand, Richards, & Slocum, 1973) • Program levels /Pre Program Diagnostics
Dependent Independent
•
Accreditation/Recognition (international)
•
Facility/Facilitation/Facilitator
•
Clarity of Program Goals and Process
• •
Learning methodologies Post LDP: transfer of training to Job Performance/Tracking of post completion
Any successful Leadership Development starts from the organizations philosophy that translates both Country and Organizational strategic plan
Mediating
Mediating The program features serve to bridge what is learned in the LDP with the day-to-day problems experienced in the workplace and post program transformation
Mediating Dependent Mediating Mediating Mediating
Through the table-1 above the authors indicates each of the possible factors and determinants that play an important role in designing the LDP within the oil exploration companies of Abu Dhabi. As stated by (Glatthorn et al, 2005) the LDP are designed to benefit both, the country as well as the organization. It is also proposed to understand the impact of culture on the leadership development program at the Oil Exploration Companies in Abu Dhabi could be determined in accordance to the Hofstede theory of culture. As argued by Mezher et al. (2011) employees can significantly benefit from any form of training; however they must be willing to incorporate the offered training into action. The companies endow their employees with regular trainings in order to create an environment of continuous improvement while dealing with the investments and implementation of strategic objectives associated to the companies (Mezher et al, 2011). The oil exploration companies of Abu Dhabi are highly recognized for their excellent and result oriented performance towards developing the leadership skill pool in the oil and energy sector (ADNOC 2013). Therefore, the organization acts as mediating variables encompassing key performance indicators, Recognition, Learning methodologies and Translating learning into action.
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The Effectiveness of Leadership Development Programs: Developing a Research Framework for the Oil Exploration Companies in Abu Dhabi
3.3. Effects of KPI’s on Leadership Development Leadership is most often viewed as the influence function of Management. Great leadership recognition is built on motivation (Schmidt, 2001). To create the most successful leadership in the oil companies of Abu Dhabi, recognition will help in finding the drive in each of the leader. Leaders are those who push for the goal, who focus on moving things forward. Employees often like leadership recognition in the form of public appraisals or to be called up on stage. The recognition of leaders is important as it will let the leaders know that their efforts are appreciated and will help them build sense of ownership and belonging in the oil companies of Abu Dhabi. Recognition will enhance their morale and loyalty towards the oil company. This will also increase their motivation which will ultimately enhance their leadership qualities. All these factors will develop the leadership. When these recognition and learning practices are implemented effectively, they help develop leadership skills. The learning methodologies require the leaders to action those learnings to their current responsibilities in order to develop their leadership skill. Translation of these learning actions will deliberate the practices to develop their leadership. The method of experiential learning through participation will realize their leadership abilities to more specific challenges of the oil companies of the Abu Dhabi. On- the-job training will help them learn and develop their skills in conflict management, solving of problems and team building. This form of learning methodology can be highly relevant and impactful for the oil companies of Abu Dhabi. The learning methodologies will develop leaders and help them pertain to various situations and they will be able to gain knowledge that will enable them to find solutions for the problem effectively and efficiently. The training programs and experiential learning through participation or the combination of both the learning methods can be a successful tool for the development of leadership. 4.
External factors
External factors are those factors that are the outside factors that impact the overall business in achieving its strategic goals. There is almost no possible situation where a leader does not have to face any external challenges. On top of the political and economic factors, leaders in oil exploration companies of Abu Dhabi face external challenges like prestige within the community and developing interpersonal communications with the dominant expat society. To some extent, the measure of any leader is how well he/she can deal with the constant succession of crises and minor annoyances that threaten the mission of his/her company (Rabinowitz 2013). If the leader is able to get a solution, resolve conflicts and take possible advantages of the opportunities in a calm manner and minimum of annoyance, most of the issues will not be noticeable by the competitors, says the editorial of economic times. If the leader fails to handle the external challenges, the company would also not be able to do so either. The development of leadership can be affected by some external factors such as sociological factors, economic & political factors and technology. In the globalization of business world of oil companies of Abu Dhabi, the leaders face an increasing need to understand the delicacy and variation of leadership as it is exercised in different cultures. Leaders, in order to be successful organizational leaders, need to understand the culture and demographics of the organization and trends in the marketplace. Understanding of culture and demographics is most important characteristics of leadership development since Abu Dhabi is a diversified society in terms of expatriate population. There are various attributes that reflect leadership as universally endorsed contribution towards outstanding leadership. The attributes can be trustworthiness, effective communication, motivation to encourage employees and to be seen as a great leader. However, Communication skill is a pivotal competency of the sociological factors that is important for the development of the leadership. Economic and social factors play a vital role in the development of leadership. Economies when grown help the leaders to expand the company. One of the reasons may be that the oil companies in Abu Dhabi then can afford higher salaries and establish better working environment to motivate employees. Whereas, when the resources are scarce, leaders may find that their roles are scaled back and they face difficulty in developing their leadership skills. The development of economy and business climate can help in the integration of oil exploration companies of Abu Dhabi to further expand in the global economy. This could be possible by attracting foreign investors and providing facilitation of human capital development all the way through investments with international partners. Political factor is one of the external factors that can either flourish the industry when maintained or badly affect the development of leadership if the situation is worsened. If the economic
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recession clamps down, the production in the oil company will be affected, which will eventually affect the training and development of leadership in the oil companies. Market fluctuations based on politics, terrorism attacks, wars and currency devaluation can eventually trickle down the oil exploration companies of Abu Dhabi. Technology in terms of innovation and adoption can change the business environment of oil exploration companies of Abu Dhabi drastically. Leaders must adjust their management styles to help the companies adapt to technology. The attributes of research and development will help leaders to create innovative new techniques that will make operations easier. The use of technology is proving to be a ladder in development of leadership in oil companies of Abu Dhabi. The change in technology can modify the way of information and knowledge accessed and delivered. The implications will impact the development of leadership and will communicate the use of technology in the development of leadership. As an external factor technology can be useful in some aspects of leadership development like integration and experiences of coaching with technology based tools and processes in oil industry of Abu Dhabi. 5.
Conclusion
After a comprehensive review of the literature on the concepts related to leadership development, the research framework was developed and discussed. The framework was targeted to be used in the study of the LDP within oil exploration companies in Abu Dhabi. The research framework reflects the needs of the leaders combined with the implementation of learning principles and translating those learning into actions. The paper also highlights individually each variable relevant for the said framework. In addition, the paper emphasizes the importance of studying the LDP within the oil companies of Abu Dhabi. The said companies seem to believe that these LDPs will enable their employees to learn effectively. Furthermore the research framework also identified the role of organization as a mediating variable in helping to determine the relationship between independent variables and their influence on the effectiveness of the LDP. The research that will be conducted using this research framework will evaluate the effectiveness of LDP, which will significantly contribute in the development of LDP in the future. Also the research results will contribute to the organizations immensely in analyzing the motivation of the leaders, which can further be emphasized in the research to be conducted. The factors stated in the research framework will probably help in attaining useful and reliable results for academic as well as practical purposes. The paper has identified some external and internal factors that are considered critical by past researchers in the study of LDP in organizations.
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(2014).Developing a performance indicator for psychosocial risk in the oil and gas industry. Safety science, 62, 98-106. [41] Wang, P., & Walumbwa, F. O. (2007).family friendly programs, organizational commitment, and work withdrawal: the moderating role of transformational leadership. Personnel Psychology, 60(2), 397-427. [42] Wu, W., & Little, T.D. (2011). Quantitative research methods (vol.1, 287-297), In B.B. Brown and M.J. Prinstein, (Eds.): Encyclopaedia of York: Academic Press. Adolescence. New [43] Yuseif, I. (2010). A critical assessment of the technical education and training programme in Libya for the national oil industry-PhD Diss., Napier University, Edinburgh.
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The Influence Of Learning Orientation And Leader Heuristics Transfer On Employee Creativity With Creative Self-Efficacy As Mediating Variable Suryandari Istiqomaha, Amin Wibowob Faculty of Economics and Business- Universitas Sebelas Maret (UNS), Jalan Ir. Sutami 36 A, Surakarta, 57126, Indonesia Faculty of Economics and Business- Universitas Gadjah Mada (UGM), Jln. Sosio Humaniora No.01 Bulaksumur, Yogyakarta 55281, Indonesia
Abstract The purpose of this research is to examine the effect of learning orientation and leader heuristics transfer on employee creativity, and to examine their effects on employee creativity through employee creative self-efficacy. Learning orientation provides another perspective to look at creativity. Leader heuristics transfer is a new aspect of leadership. It is developed beyond the intrinsic motivation mechanism. Leader heuristics transfer is the delivery of skills-based leadership experience through rules of thumb. This research was conducted at operational and maintenance department of telecommunication industry in Indonesia. Questionnaire was distributed to 194 employees, but in this study only 132could be used. Two statistical techniques were used in this study. They were multiple regression and hierarchical regression techniques. Multiple regression technique was used to test the influence of learning orientation and leader heuristics transfer on employee creativity, while h ierarchical regression technique was used to examine how creative self-efficacy mediates the effect of employee learning orientation and leader heuristics transfer on employee creativity. The result shows that learning orientation has no significant effect on employee creativity. Another result shows that leader heuristics transfer i s significantly related to employee creativity, and has positively significant effect on employee creativity. The variable of self-efficacy does not s i g n i f i c a n t l y mediate the effect of creative learning orientation and heuristic leader transfer on employee creativity.
© 2014 Suryandari Istiqomah, Amin Wibowo. Published by Telkom Pub. Ltd. Selection and peer-review under responsibility of The ISCLO, Department of Communication, University of Telkom, 20342 Bandung, Indonesia. Key words: learning orientation, leader heuristics transfer, creative-self-efficacy, employee creativity, telecommunication industry
1. Introduction Employee creativity is one of the components of the organization that is believed to make an important contribution in innovativeness and sustainability of organization (Amabile, 1988 Ford, 1996). Initiation and implementation of creative ideas can be used to respond to market changes, and to capture opportunities so that companies can adapt, grow, and compete (Oldham & Cummings, 1996; Nonaka & Takeuchi, 1995). Creativity is also believed to be useful for individuals, teams and organizations (Oldham & Cumming, 1996). Gong, Huang, and Farh (2009) found a positive relationship between employee creativity and employee performance. Gilson, Mathieu, Shalley, and Ruddy (in Cheung, 2011) also found a positive relationship between creativity and performance on the team level. Employees with a creative idea can apply these ideas in their work, develop and transfer these ideas to other employees within the organization to use and re-developed this idea (Shalley & Gilson, 2004; Shalley, Zhou, & Oldham, 2004). Because of the many benefits of employee creativity to the organization, it is important to know the factors that can
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affect the creativity of employees in the organization (Shalley & Gilson, 2004; Zhou & Shalley, 2008). Creativity is a function of employee personal character, contextual character in which he worked and the interaction of these two characters (Woodman, Sawyer, & Griffin, 1993; Shalley, Zhou, & Oldham, 2004; Zhou & Shalley, 2003). Personal factors are factors that exist within the individual that can affect creativity whereas the social and contextual factors are the dimensions of the work environment that could potentially affect the creativity of employees, but not part of the individual (Shalley, Zhou, & Oldham, 2004). One of the personal characters thought to affect creativity is employee learning orientation. Learning and knowledge as one important component is believed to employee creativity (Amabile, 1988, Amabile & Grykiewicz, 1987; Shalley and Gilson, 2004). The use of learning orientation will provide another perspective of looking at creativity, the learning perspective. But so far studies looking at creativity from the learning perspective is still relatively small (Gong, Huang, & Farh, 2009; Hirst, Van Knippenberg, & Zhou, 2009). There are few studies examining the relationship between learning orientation and employee creativity. Gong, Huang, and Farh (2009) and Hirst, Van Knippenberg, and Zhou (2009) found the positive effect of learning orientation on employee creativity. While Redmond, Mumford, and Teach (1993) found no significant relationships between learning orientation and originality solutions of specific marketing tasks. In addition, a contextual factor that is often used as an antecedent of employee creativity is leadership (McMahon & Ford, 2013; Cheung, 2011). However, from many types of leadership that have been studied, intrinsic motivation is t h e most f r e q u e n t mechanisms used to explain t h e r e l a t i o n s h i p s between leadership and employee creativity (McMahon & Ford, 2013). Actually, there are other mechanisms that can be used to explain the relationships between leadership and employee creativity, i.e. domain-relevant skills and creativity relevant processes (Amabile, 1988). One type of leaderships that is developed by a mechanism beyond the intrinsic motivation is the leader heuristic transfer developed by McMahon and Ford in 2013. Leader heuristic transfer is defined as the delivery of skills-based leadership experience through heuristic rules of thumb (McMahon & Ford, 2013). Transfer articulation heuristics includes the heuristics of a leader used for pattern recognition, discovery and problem-solving that can be generalized across settings and context of the decision (McMahon & Ford, 2013). Therefore, his new theory of leader heuristics transfer in leadership theory and its influence on employee creativity is needed to provide additional results for the theory of leader heuristics transfer on employee creativity. Another variable used in this study is a creative self-efficacy. Gong, Huang, and Farh (2009) stated that previous researches are inconclusive possible due to the influence of other variables which connect learning orientation with creativity. Gong, Huang, and Farh (2009) used the variable of creative self-efficacy as a mediating variable for learning orientation on employee creativity. Creative self-efficacy is the belief that one has the ability to produce creative outcomes (Tierney & Farmer, 2002). The use of creative self-efficacy is also supported by Payne, Youngcourt and Beaubien (2007) who stated that a high learning orientation will enhance the specific self-efficacy, which in this study i s c a l l e d the creative self-efficacy. In addition, Tierney and Farmer (2002) found positive associations between creative self-efficacy and creativity. Similarly, the Leader Heuristic Transfer will enhance subordinates creative self-efficacy. Tierney and Farmer (2002) stated that the leader can affect self-efficacy of creative subordinates with modeling and verbal persuasion methods. Based on the research gap described above, the aim of this study is t o p r o v i d e a n empirical examination of learning orientation, leader heuristic transfer and creative self- efficacy on employee creativity. This study is still very relevant and needed to provide more convincing evidence. This paper will be divided into four main topics, they are: background, hypotheses development, research method, results and discussion, and conclusion.
2. Hypotheses Development Orientation learning is a concern and dedication to develop 1988). Individuals with learning orientation are characterized by the the level of mastery (Dweck, 1986; Dweck & Leggett, 1988). They new ways and things (Dweck, 1986; Dweck & Leggett, 1988). A
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self-competence (Dweck, 1986; Dweck & Leggett, ability to view and forged and enhanced attention to tend to increase their knowledge and to learn about person with a learning orientation will support the
The Influence Of Learning Orientation And Leader Heuristics Transfer On Employee Creativity With Creative Self-Efficacy As Mediating Variable
acquisition of knowledge that will be able to create creative things in their work environment (Brett & VandeWalle, 1999; Gong, Huang & Farh 2009). Ames and Archer (1988) stated that individuals with a learning orientation will tend to look for challenges that give them an opportunity to learn. Individuals with a learning orientation would seek self-improvement information from t h e i r co-workers or their connections and they are more knowledgeable or experienced to help t h e m s e l v e s identify t h e areas for improvement (Payne, Youngcourt & Beaubien, 2007). They will be able to produce creative performance by continuing to look for alternative ways to improve practices, or find a completely different way (novel) to complete the given tasks (Cheung, 2011). When faced with setbacks, individuals with learning orientation will address the setbacks with creative efforts, persistence, and a winning effort (Cheung, 2011). Relevant creative process to create new ideas will be created, such as trying to use different strategies to solve the problem. They maintain concentration and cognitive resources to generate creative ideas to solve complex problems (Cheung, 2011). From various descriptions summarized above, the hypothesis can be constructed as follows: Hypothesis 1: Learning orientation has a positive effect on employee creativity. 2.1. Influence of Leader Heuristics Transfer on Employee Creativity Amabile (1988) quoted in McElvaney (2006), formulated three main components of creativity, i.e.: the domain relevant skills, creativity relevant processes, and task motivation. One of the processes that affect the relevant creativity is creativity heuristics to generate new ideas that are unique. Heuristics can be interpreted as a simple rule of thumb that focuses on catching opportunities in a process (Bingham, Eisenhardt & Davis, 2007). Individuals use heuristics to help themselves make creative outcomes (McMahon & Ford, 2013). Heuristics can be used by the man himself and or can also be adopted by others, although in different ways or in different challenges. A leader can collect and use the heuristics for himself/herself and he/she can pass it on to their employees through the heuristics transfer (McMahon & Ford, 2013; Argote, McEvily & Reagan, 2003). This may also apply to transfer heuristics owned by the leader to his employees. Transfer articulation heuristics include the heuristics of the leader used for pattern recognition, discovery and problem solving (McMahon & Ford, 2013). Leader heuristics transfer focuses more on improving the ability of employees to solve the problem by introducing t h e patterns of problems, the process of finding the problem, and to provide solutions for solving those problems. Leader heuristics transfer will engage employees in recognizing situations and problems that occur. Leader heuristics transfer can provide creative training. It can improve the employee experience by teaching creative problem solving techniques, and help t o develop new cognitive and heuristic way to more creative problem solving (Amabile, 1988). Leader heuristics transfer will improve cognitive framework and the ability of employees to generate new heuristics that can be used in solving the problems faced by employees. Increased cognitive abilities will help employees in the face of new circumstances or unanticipated situations (McMahon & Ford, 2013). From the description above, the hypothesis can be constructed as follows:
Hypothesis 2: Leader heuristics transfer has a positive effect on employee creativity. 2.2. Creative Self- Efficacy Mediating the Effect of Employee Learning Orientation on Employee Creativity Why can learning orientation enhance employee creativity? The question indicates a process through which learning orientation enhances employee creativity. Gong, Huang, and Farh (2009) believed that creative self- efficacy comes from learning orientation. This was in line with Payne, Youngcourt and Beaubien (2007) who stated that high learning orientation will enhance the specific self-efficacy. Tierney and Farmer (2002) also stated that a person will tend to be creative, if they have a creative self- efficacy. Gong, Huang, and Farh (2009) stated that learning orientation i s appropriate to establish creative selfefficacy for several reasons First, learning orientation is based on the incremental ability conceptions which assume that ability is malleable and soft, and it can be improved (Dweck, 1986; Dweck & Leggett, 1988), and the conception of creative self- efficacy i s a construct (Payne, Youngcourt & Beaubien, 2007). Individuals with learning orientation will support the acquisition of new knowledge and skills to improve their competence (Brett & Vandewalle, 1999). Employees who understand the nuances of their work and the creative self- efficacy are more likely to be
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able to produce creative performance (Tierney & Farmer, 2002). Second, learning orientation focuses on the development of competencies. Learning-oriented employees tend to accumulate the mastery of successful experience. Th e capital about mastery of successful experiences will encourage employees to have a creative self-efficacy, and they are more likely to produce creative results. Third, when faced with setbacks, individuals with learning orientation view failure as lack of effort or the use of less efficient strategies and see that the increase in business will provide a better end results. Properties owned by individual learners will help nurture creative self-efficacy to produce creative results. By focusing on improving competencies, individuals with learning orientation will be able to maintain creative self-efficacy and generate creativity (Gong, Huang, & Farh, 2009).When someone has a creative selfefficacy, he/she will be able to produce creative performance (Tierney & Farmer, 2002). Creative self-efficacy is emerged as the momentum in a strong self-efficacy as an individual attempts to deal with challenging situations (Tierney & Farmer, 2002). Employees will not engage in the creative behaviors when they see the creative performance will not work (Ford, 1996). Therefore one's creative self-efficacy is very important to motivate someone to do creative performance. From the description, the hypothesis can be constructed as follows:
Hypothesis 3: creative self-efficacy mediates the positive effect of learning orientation on employee creativity 2.3. Creative Self-Efficacy Mediating the Effect of Leader Heuristics Transfer on Employee Creativity Although the mechanism of leader heuristics transfer increases employee creativity to improve the skills of pattern recognition, discovery and settlement of the problem, but it does not rule out the existence of other mechanisms linking the two constructs. This research proposes to use a creative self-efficacy as a mediating variable between leader heuristics transfer and employee creativity. Leader is a potential driving force in shaping employee creative self-efficacy (Tierney & Farmer, 2002). A leader has an important role in shaping the confidence and trust of our employees to shape the behavior that produces creativity (Amabile & Gryskiewicz, 1987). Leader heuristics transfer will arm employees with more skills for recognition, discovery, and problem solving (McMahon & Ford, 2013). Through the guidance, the leader heuristics transfer will enhance the mastery of one's experience (enactive mastery) that will increase employee creative self-efficacy to produce creative performance. Leader heuristics transfer can improve employee creativity through creative self- efficacy through indirect experience (vicarious experience). Bandura (1997) stated that the vicarious experience can boost a person's self-efficacy with observational learning, i.e. by observing the behavior of others (models) and looking at the consequences derived from the behaviors. Leader heuristics transfer affects employee creative self-efficacy by transferring knowledge and teaching effective strategies to cope with the various demands of the environment that will foster self-confidence to be able to do creative performance. This is in line with the concept of leadership where leader heuristics transfer will transfer the heuristics to employees to improve their skills through patterns of recognition, discovery and problem solving (McMahon & Ford, 2013). Increasing employee skills acquired will increase self-efficacy in generating creative performance. Leader heuristics transfer can also provide verbal persuasions (suggestions and advice) to employees in order to improve their skills through pattern recognition, discovery and problem solving. Therefore, the employees with creative self-efficacy can create creative outcomes. Verbal persuasion can be used to persuade employees because they have the ability to achieve the goals they want to achieve. People who have high persuasive ability will have more confident to accomplish a given task than those who do not have verbal persuasive ability. When someone has a creative self-efficacy, then he or she will be able to produce creative performance. This is supported by Ford (1996) w h o stated in a creative act, that the success of employee confidence is a core component of innovation. If employees see t h a t t h e r e i s hope that the creative performance will be successful, then the employee will engage in a creative act. Therefore, the possession of creative self-efficacy would encourage someone to do creative performance (Tierney and Farmer, 2002; 2004). From the description above, the hypothesis can be constructed as follows:
Hypothesis 4: creative self-efficacy mediates the positive effect of leader heuristics transfer on employee creativity.
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3. Research Methods Respondents used in this study were individuals who work in operations and maintenance division of the telecommunications industry in Indonesia. Sampling in the telecommunications industry was based on the characteristics of work which allowed the emergence of employee creativity at work. Employee creativity might arise in the process of handling the existing problems in this department. In addition, the selection considered that employees who work in this section had the opportunity to create greater heuristics. This happened because the types of work were not glued to the use of SOPs (Standard Operating Procedure) to resolve problems that arise. The type the industry with rapid technological development also supported the use of employee learning orientation. In this study, data were collected through a survey method, by distributing questionnaire directly to the sample. The questionnaire consisted two parts. The first part of the questionnaire ( t o b e f i l l e d o u t b y e m p l o y e e s ) consisted statements regarding t o employee learning orientation, leader heuristics transfer and creative self-efficacy. The second part (to be filled out by the supervisors) consisted o f statements regarding employees’ creativity. Data collection through the questionnaire was conducted for2 months from June to July. The questionnaire was distributed to 194 employees including 60 supervisors. Out of 194 staffs, the total of 160 were returned (the response rate was approximately 82.5%). From those retuned, 28 were not valid because of various reasons (such as some items were not answered orally; items were answered with the same scale). This meant that the respondents for this research were132 employees, including 57 supervisors. Statistical technique used for data analysis was hierarchical regression analysis by using the software of SPSS version 16.0. The scale used in the questionnaire was a Likert’s Scale of 1 - 5 (1 = strongly disagree, 5 = strongly agree). The operational definitions of the variables used was as follows:
a. Employee learning orientation is an individual recognition that their competence can be developed through the mastery of skills, knowledge and new situations. The items used to measure this variable were selected and modified from the measurement tools initially developed by Elliot and Church (1997). Examples of the items are: 1) I want to learn as much as possible from my work; 2) I hope to get a broader and deeper knowledge when I finish my work.
b. Heuristric transfer is defined as the degree of confidence of the employees that their supervisors deliver heuristics to help assist them in recognizing a pattern, find and resolve the problem. T h e i te ms to measure this variable w ere mo d if ie d fro m th e five-point questions developed by McMahon and Ford (2013). Examples of items are: 1) my boss increases my ability to recognize more detail in the environment around me; 2) my boss taught me the process that I can apply to the tasks that I face.
c. Creative self-efficacy is defined as the beliefs of the individuals that they are able to produce creative results. The items used to measure this variable are those developed by Tierney and Farmer (2002). Examples of the items are: 1) I feel that I can generate new ideas; 2) I have a talent or knack to develop my idea or ideas of others.
d. Employee creativity is defined as the perception of supervisor related to the development of products, processes, and procedures creatively generated by employees. Items to measure this variable were modified from those developed by George and Zhou (2001). Examples of the items are: 1) the employee is proposing new ways to achieve the goals or objectives; 2) The employee filed new ideas and practical to improve performance; 3) the employee is proposing creative solutions to problems encountered. Control variables used in this study were age, length of work between superior- subordinate, and level of education. Ages became one control variable because it was considered as one of the factors that affect the creativity of employees (Gong, Huang, & Farh, 2009). The older person will have a negative effect on employee creativity (Lehman, 1953 in McMahon & Ford, 2013). Finally, long working between superiorsubordinate will probably affect the assessment superiors to subordinates. Hence the old superiorsubordinate relationship is used as a control tool (Shin & Zhou, 2003). The level of education in this study w a s also controlled because education may affect the important domain knowledge or expertise relevant to creativity (Gong, Huang, & Farh, 2009; Tierney, Farmer, & Graen, 1999).
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4. Result and discussions Testing validity of the constructs was done by using confirmatory factor analysis twice. The second round was done by removing the learning orientation question items 5 and 6 b e c a u s e t h e y had cross loading. The second round of testing resulted the value of KMO (Kaiser- Meyer-Olkin) of 0.845 and Bartlett's Test of significance of 0.000. The reliability test was done by looking at Cronbach's Alpha value of each variable. The test results show that all of the instruments used are reliable because the value is above 0.6 (Hair, Black, Babin, & Anderson, 2010). The results of validity and reliability tests results can be seen in Table 1. Table 1 Results of Validity and Reliability Tests Variable Learning orientation Leader heuristic transfer Creative self-efficacy Employee creativity Learning orientation
KMO MSA
Range of Loading Factor 0,728-0,812 0,658-0,788 0,717-0,793 0,570-0,774 0,728-0,812
0,845
Cronbach”s Alpha 0,844 0,820 0,841 0,916 0,844
Source: Primary data were processed (2013) Table 2 presents the results of descriptive analysis consisting of mean, standard deviation, and coefficient between variables. Table 2 shows that there is a correlation between variables. Employee learning orientation correlated significantly with the leader heuristic transfer (r = 0.279, p

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