As an archipelagic country, Indonesia has a great potential of shipping because it is located in the crossing of International trade routes. Shipping has become an important sector in supporting social, economic, government, defense, security, cultural and other sectors to unite separate islands and broad seas. Thus, ports automatically become an important facility in Indonesia.
One of the port services available in Indonesia is PT. Pelabuhan Indonesia (Pelindo) I which is a State-Owned Enterprise (SOE). The work area of Pelindo I is the western region of Indonesia, which directly faces Malacca Strait – the busiest waters in the world, so that the presence of Pelindo I also has a strategic role in connecting the sea transportation-based international trade network in Indonesia. Therefore, to continue its sustainability to improve the economy, Pelindo I is necessary to increase its competitiveness (port competitiveness). Port competitiveness is closely related to the corporate sustainability of PT. Pelindo I, considering that the world transportation system will change soon, automatically having an impact on sea transportation in Indonesia.
The description above implies that port competitiveness issues of PT. Pelindo I is seen as urgent and very urgent. Thus, the researchers were interested and challenged to study on how to improve the port competitiveness of PT. Pelindo I.
Changes in the organization are unavoidable, both because of external and internal factors. Change is a process of transitioning the current state to the expected state in the future. Organizational change is a constant thing that can occur over time. Managing organizational change is largely about managing aspects of Human Resources in the process. Human Resources in an organization can be the biggest obstacle in achieving and sustaining change. The failure of individual employees to prepare themselves to deal with changes in the company causes managers spend significant time and energy with resistance to change.
In addition to organizational change, Service Innovation also becomes important for organizations. Aas et al. (2010) said that Service Innovation includes new ideas, practices or objects for relevant organizations and environments, becoming the reference group of innovators. In the broadest sense, service innovation refers to all innovation behavior and activity-related services. Service Innovation uses the opportunity to create a combination of new resources derived from established knowledge and existing technology, which occurs between many actors and actor networks. From the customer’s perspective, how the combination of newly resources is developed is unimportant. The key is values created together through new services.
Corporate Image is a stakeholder perception of the actions, activities, and achievements of an organization. Each stakeholder class deals differently with the organization and, thus, has different perceptions about the organization (Fatt et al., 2000). The factors making up Corporate Image can be grouped into three categories of mixed identities as suggested by Van Riel et al. in Chattanon et al. (2007), namely behaviors (employee behavior, director’s reputation and employee roles), symbolism (visual identity and other physical evidence such as products, service quality, and history), and communication (advertisement and promotion).
Organizational Change Readiness, Service Innovation, and Corporate Image can be important keys in a company to identify and provide direct responses regarding perceived environmental setting. As the times passes by, competition among companies in various sectors is also getting higher. One sector that has become important in recent years is ports. According to Government Regulation No.69 of 2001 Article 1 Paragraph 1 on Port Affairs, a port shall be a place consisting of land and waters with certain borders as a place of administration and management activities, used as a place where ships berth, embark and disembark passengers and/ or load and unload goods, in the form of terminal and berthing place of ships equipped by navigation safety and security facilities and seaport supporting activities as well a place for the change in intra- and inter-transportation modes.
The use of Organizational Change Readiness, Service Innovation, and Corporate Image in improving Port Competitiveness is seen as one of the novelty in this research, specifically the use of the Organizational Change Readiness variable which is often used in high-flexibility companies but now used in port companies.
The purpose of this research is to test and explain the effect of Organizational readiness for change, Service Innovation, and Corporate Image on Perceived opportunity and challenge.
Conceptual Framework
The conceptual framework of this research connects the relationship between variables. In detail, this research examined the effect of Organizational Change Readiness, Service Innovation, and Corporate Image as independent variables on Port Competitiveness as the only dependent variable.
Referring to the conceptual framework and hypothesis model of this research, the theoretical relationship between variables in this research can be explained as follows:
The Effect of Organizational Change Readiness and Port Competitiveness
Cetinkaya et al. (2019) conducted a study entitled “Organizational Change and Competitive Advantage: Business Size Matters” with the aim of determining the impact of organizational changes on the competitive advantage and finding out whether the size of the company mitigates the relationship between organizational changes and competitive advantages. Data was obtained from employees working in the Chabahar industrial zone in Iran. A total of 233 valid questionnaires were received from companies operating in this zone. The data was then analyzed using descriptive statistics, exploration factor analysis (EFA), confirmation factor analysis (CFA) and linear regression techniques. The results showed that organizational changes have a positive impact on the competitive advantage. In addition, the size of the company plays a moderate role in the relationship between organizational changes and competitive advantages.
Weeks et al. (2004) conducted a study entitled “Organizational Readiness for Change, Individual Fear of Change, and Sales Manager Performance: An Empirical Investigation.” This study examined perceived organizational willingness to change and individual fear of changes related to individual performance. A total of 343 sales managers from various industries participated in this study. A significant positive correlation was found between the professional perception of the sales manager regarding his organizational willingness to change and his own work performance. Given the manager's fear of change, the relationship between the perceived organizational willingness to change and the work of the sales manager is improved. Implications for academics and practitioners are given along with instructions for future research.
Timmor and Zif (2010) conducted a study entitled “Change Readiness: An Alternative Conceptualization and an Exploratory Investigation”. Change readiness (CR) is viewed as multi-dimensional behavior that reflects a company's ability to do three things to respond to environmental opportunities and threats in its industry: triggering identification; Preparation for measures (preparation); and take new levels of action. The main goal of this research is to propose and test alternative conceptualizations for CR. Data was collected from 217 organizations in 14 countries. All respondents were responsible for or involved in the strategic decisions and implementation of their companies and filled out a structured questionnaire. It was found that CR is influenced by both internal and external variables, including management orientation (entrepreneurship, centralization), environmental barriers and the role of technology and innovation in corporate strategies. In addition, higher CR values correlate with better performance and a higher management rating of success in combating environmental triggers.
Based on the description above, the first hypothesis in this research is stated as follows:
(H1) Organizational Change Readiness has a significant effect on Port Competitiveness
The Effect of Service Innovation and Port Competitiveness
Doğan (2016) conducted a study entitled “The Effect of Innovation on Competitiveness” with the aim to analyze the factors that determine innovation for the competitiveness of the Member States and candidate countries of the European Union. The analysis used in this study was a panel data analysis. The empirical results showed that there are two determinants of innovation that have a positive impact on competitiveness, namely knowledge and technological and creative results.
Tongzon (2004) conducted a study entitled “Determinant of Competitiveness in Logistics: Implication for the Region. International Conference on Competitiveness: Challenges and Opportunity for Asian Countries”. The aim of this study was to determine various variables of the port service, including the efficiency of the terminal port, the cost of cargo handling, the reliability, the preference for port selection and the depth of the ship channel. Tongzon used several variables that determined the competitiveness of the port, namely efficiency, frequency of port visits, completeness of infrastructure, location, port costs, quick response to customers and improvement of the reputation of product defects. In order to determine attributes in the dimension of the port service, the characteristics of the port service activities must be understood. The main function of port services is to smooth the movement of modes of transport within and between modes of transport as the center of maritime transport services and the center of goods distribution and consolidation. Therefore, ports offer various services for these functions.
Yap and Zahraei (2018) conducted a study entitled “Liner shipping alliances and their impact on shipping connectivity in Southeast Asia”. This paper aims to analyze the impact of this development on countries. The shipping connectivity of the main container hub in Southeast Asia is Port Klang, Singapore, and Tanjung Pelepas. The rationalization of services was significant during the period when the number of shipping services in the port decreased by 38%. Participation in the alliance is important so that the shipping channel in the Asian-European trading channel can successfully exist in the new shipping landscape. The terminal operator should expect a further rationalization of the service if excess capacity remains. Maintaining hub status requires the ability to meet the strategic, operational, and commercial needs of all alliances, rather than just focusing on the main shipping lane.
A study entitled “Service Quality and Global Competitiveness: Evidence from Global Service Firms” was conducted by Sun and Pang (2017) with the aim to explore the relationship between service quality and global competitiveness of companies in the service industry. A number of moderation effects have been formulated to further demonstrate how the relationship changes under different circumstances. In this article, the model was examined using data from various sources such as the world's most admired company and COMPUSTAT. The empirical model estimate used two strong types of regression for panel data. Service quality has been found to significantly increase global competitiveness. In particular, the impact for large service companies is stronger, and if the global environment is characterized by low ammunition, high dynamics or high complexity.
Based on the explanation above, the second hypothesis proposed in this research is as follows:
(H2) Service Innovation has a significant effect on Port Competitiveness
The Effect of Corporate Image and Port Competitiveness
Hamid (2018) carried out a study entitled “Factor Analysis for Balanced Score Card as Measuring Competitive Advantage of Infrastructure Assets of Owned-State Ports in Indonesia: Pelindo IV, Makassar, Indonesia”. The aim of this study was to examine the factor analysis for the Balanced Score Card (BSC) to measure the competitive advantage of the Indonesian port infrastructure: Pelindo IV, Makassar, Indonesia. Pelindo IV's competitive advantage depends on 81.2% of the financial, customer, internal process and learning perspective, while the rest of 18.8% depends on other factors. The results of the measurement model for the competitive advantage in Figure 2 are significant (p-value <0.05), measured on the basis of the financial perspective, the customer perspective, the internal process perspective and the performance of the learning perspective. Using the highest coefficient load factor, it can be shown that the competitive advantage is measured most from the learning perspective. The high value of Pelindo IV's competitive advantage, Makassar, Indonesia, is seen primarily from a learning perspective. The BSC sequence for measuring competitive advantage is as follows: learning perspective performance, financial perspective performance, customer perspective performance and internal process perspective performance.
Barnet et al. (2000) conducted a study entitled “Towards One Vision, One Voice: A Review Essay of the 3rd International Conference on Corporate Reputation, Image and Competitiveness”. The 3rd International Conference on Corporate Reputation, Image and Competitiveness brings together scientists and practitioners from different fields to discuss many critical questions about how a company's reputation can contribute to corporate performance. Several presentations were discussed in this paper to illustrate the general theme of the papers in this conference. After identifying the general topic, a unified framework was offered to bring together different areas that contribute to a general topic, namely corporate reputation. Establishing a general framework is very important in order to develop the study of company reputation and its impact on company performance.
Kyurova and Yaneva (2017) conducted a study entitled “The Impact of the Corporate Image on the Competitiveness of Interior Design Enterprises”, aimed to identify the size of the company image, the competitiveness of the company and the relationship between the two. This study used a statistical method (analysis of variance, regression and correlation) to examine the impact of corporate image on the competitiveness of companies in the field of interior design. Questionnaires were used to collect primary data. The indicators examined were rated on a 7-point Likert scale. The survey results showed a strong correlation between the company's image and its competitiveness. In summary, the corporate image is an important tool for realizing a sustainable market and achieving a strong competitive advantage.
Based on the description above, the third hypothesis proposed in this research is as follows:
(H3) Corporate Image has a significant effect on Port Competitiveness