Proposed SCM Framework LITERATURE REVIEW Definition of Supply Chain Mgmt SCM
MIICEMA 2014 10-11 November 2014
Hotel Bangi-Putrajaya, Malaysia
201
2.5 Research Questions This research intends to bridge the gap in the existing literature. We seek to understand
how leadership practices and organization performance interact in supply chin activity. In particular, we investigate how goods regulatory pressure as institutional factor facilitate
supply chain activities in movement of goods in term of the impact that it will bring to the connection between leadership and organization performance . Our research questions
thus are: 1-How leadership practices in cargo transfer through port supply chain activities
influence organization performance?
2-How regulatory pressure in cargo transfer through port supply chain activities influence organization performance?
3-How regulatory pressure moderates the relationship between leadership practices and organization performance in moving goods through port supply chain activities?
3. RESEARCH METHODOLOGY Method
Methodology of the explorative study is based upon qualitative approach. Extensive interviewed has been conduct for management level practitioner in relation to port supply
chain activities. Academic review SCM Professor from local university and a Doctor of Business Administration holder who is also member of supply chain was also sought to
help identified the logical and systematic approach of the analysis. And the findings did inform the researcher that the interviewed data were truthful and reasonable.
This paper used qualitative research design to explore group or individual issue that need to be
identify and measure, or disclose silence voices that only be achieve through talking and interviewing directly with the people Creswell, 2007, p.40.
A self administered survey interview instrument with open ended was utilized as the meant of data collection Appendix A. This type of structure interview is suitable for
large sample and its straight forward manner as mention by Tracy 2013. The type of information that qualitative studies yield is rich in detail. Sample size is only good as it
quality not necessarily the quantity. Tracy 2013 mentioned in her book that not enough sample will result in trivial and sour contribution while too many will result in a
paralyzing data that will discourage transcription and form incisive understanding. She suggests five to eight interviewers as pedagogically valuable. Data will start to provide
rich contribution to research goals after as few as 12 interviews as mentioned by Guest, Bunce, and Johnson 2006. The location has being chosen because of Port Klang
position as the busiest port in Malaysia.
MIICEMA 2014 10-11 November 2014
Hotel Bangi-Putrajaya, Malaysia
202
Port supply chain participants Respondents selected were the participants of port supply chain that have experience in
facilitate the movement of goods for other or for themselves that include port activities as integral part of their supply chain in Port Klang. This has prompted me to interview a
total number of 16 qualified respondents of management level. The respondents comprise of various supply chain members that involve in material flow along the supply chain
namely; 1 Forwarding local and Multinational, 2 Transportation local, 3 Shipping International Shipping line, 4 Producer of goods and services national research centre,
national car manufacturer, aircraft industry player, 5 Logistic and warehouse Multinational and local player, 6 Regulatory agencies Port Klang Authority, 2 Royal
Malaysian Customs officer, Atomic Energy Licensing Board, and Terminal operator Southport and Northport executive. The profile of the respondents shows all of them are
male and that their range duration of SCM experience as a officer who basically have technical knowhow and knowledge are between 5 to 35 years. All the interviewing
session was recorded in the month of July 2013, April 2014, and June 2014. The session is conducted using both English and Bahasa Malaysia.
Data collection The purposive sampling strategy as mentioned by Creswell 2007, p.125 will decide and
selects individual and site for research that can decisively inform researcher about the understanding of problem and central phenomenon that has occurred. Researcher need
clearly decide about who or what should be sampled, what form the sampling will acquire, and how many respondent or sites need to be sampled, and whether sampling
will be reliable with information needed.
Appointment was made for interview after selected officer were contacted, and inviting them to participate in study by verbal invitation and telephones. Four interviews were
done at the office, and the balance twelve chooses to participate after office hour. The interviews lasted for an average of 30 minutes. A recorder was used to facilitate the
interviews. Comprehensive notes of the answers were taken and transcribe into interview report immediately after each session.
Credibility In the beginning, formal consent was sought from the participant as well as
confidentiality was assured with regard to the data and it purposed was intended only for the research Gibson and Brown, 2009. Thick description, triangulation and member
reflection were used to establish credibility of data collection and analysis Tracy, 2013. Thick description is achieved when researcher spend time in the environment and acquire
MIICEMA 2014 10-11 November 2014
Hotel Bangi-Putrajaya, Malaysia
203
experience through port activities in order to understand the assume values of a certain group, system, or organization.
Triangulation was performed by collecting data from major actors, service provider and regulator. This allowed research to cross check information and fully appreciate port
supply chain activities and operational process. Member reflections were conducted by consulting 4 of participants 2 major actors, 1 service provider, and 1 regulator. Each
participant examined the result and agreed that the outcome is consistent with their view as well as sharing their reflection on future improvement of the study.
Delimitations of the study The major limitation was generalizing ability of the study on its conclusions. Emerging
themes from the research accept the relevancy with only the context of Port Klang as the busiest seaport in Malaysia. Restrictions of the studies were firmed for research, which
limited to the exploration of port supply chain participant in the area. Self selected participant were the only approach that were choose based on its cost, time, and
accessibility constraint. Consequently, the study based only on port supply chain participant opinion on leadership and regulatory pressure as predictor for organization
performance. The gap in this approach is open for future exploration on other type of dry, river, and airport situation that also involve in cargo transfer and supply chain activities.
4. FINDINGS
Supply chain activities Respondents have described variety understanding of supply chain management when the
question being forwarded. Most of them agree that it is not just about internal organization but rather an approach of continuous business process of product movement
from corner to corner right until it arrives to the last organization. The major arguments relates are movement of good from point A to point B, from the upstream raw material
and goes to the downstream finish goods activities, from beginning of the goods being supply either locally or abroad right until it reach it intended final customer, the network
of organizations that interact together in bring goods from abroad or sending out to overseas, and the essence of it all is about the flows. Some respondents explain further
about participant of supply chain and the essence of supply chain flows:
[…] supply chain network where all industry players such as at my place we have our shipping and forwarding agents, we have importer and exporter that are together inside the network and
they all involve in bringing cargo and other […] Assistant Manager Southport, Port terminal operator.
MIICEMA 2014 10-11 November 2014
Hotel Bangi-Putrajaya, Malaysia
204
[…]Suepply chain management in the port industry as I see is where the container being received , and then when the container being manage before its being released by the relevant
government agencies, and after the government agencies released the container to be transfer to the next responsible parties […] Senior Manager Northport, Port terminal operator.
[…] I can summarize into three flows of working rules, first of all in terms of our commodity products , secondly it’s about the information flow of command which we share in the supply
chain , and the thirdly is the finance flow or capital flow […]Manager , Aircraft Industry Player Leaderships
In term of leadership in supply chain, there are several emerging theme that were mentioned by the respondents. There are several arguments appears to describe the matter
relating to how leader inspire and lead the employee to work , how leader present and effortlessly provide assistance and how leader instruct the employee to follow the clear
guideline in job completion . This issue where nicely summarized by this two respondents:
[…] it involves the commitment of top management in leading the effective implementation of supply chain […] Professor, Local Public University
[…] here the leadership emphasizes integration of employees... create understanding among employees so in the manner required by the company to complete something that relate to the
task... and we also have Standard Operating Procedures to be followed in term of managing employee work outcome so that it does not shy away from the goal intended […] Doctorate of
Business Administration, General Manager of Multinational logistic and warehouse
[…] what we find in my organization is a style of leadership that based on the time […] because this is what we promised to the customer […] Manager, Local car manufacturer
[…] leadership by example which means as a leader he has to know all the company movements, structure of operations , accounts, and human resource so when a boss knew everything his
officer will respect him automatically […] Chief Operating Officer, Local transportation
Organizational performance
With regard to organizational performance in supply chain activities, it has been brought up into attention by the respondents on this topic in various perspectives. The
performance of an organization is measured through specific monetary objective, effective use of resources, cost and time saving, and satisfaction to all type of customer in
the supply chain. This issue where eloquently summarized by this two respondents:
[…] three aspect of benchmarks in terms of key performance indicator that are constantly observe and attract lot of attention are quality, speed and cost […] Manager, Aircraft Industry Player
MIICEMA 2014 10-11 November 2014
Hotel Bangi-Putrajaya, Malaysia
205
[…]key performance indicator that we have to achieved for example in terms of customer satisfaction, sales target and reduction of defective item, and in the warehouse we have all the
procedures in place to be followed in order to facilitate and to ensure the smooth running of supply chain […] Assistant Manager, local logistic and warehouse
Regulatory pressure
The final aspect that being mentioned by the respondents was the element of regulatory pressure as being narrated by the respondents:
[…] my understanding of regulatory it involves government bodies such as customs involving tax collection in the supply chain […] in warehouse where we store goods which is sometime control
and need approval from relevant body for example medicine that must have approval from Ministry of Health, and if it is a dangerous good it required authorization from Environmental
Department […]Assistant Manager, local logistic and warehouse
[…] movement of goods from point A to point B must have some sort of control because this
thing as I said earlier is associated with safety and security issues […] this thing should be control because as you said anything can happen now day and there must be a means of regulatory
mechanisms exist and its not to restrict public but this thing is about safety and security […] Executive, Port Authority
Direct effect
Further approach is to get the respondents feedback on the relationship between leadership independent and organizational performance dependent. This has been
proved by several earlier empirical researches but limited research being done in Malaysia that cover supply chain management practices which focusing on material flow
along the port supply chain. This study found overwhelming agreement on the 16 respondents Appendix B that consent with the leadership style will definitely impact
organizational performance organization. This also have similar effect as being argued by the respondents pertaining to the research question on whether regulatory pressure can
influence organizational performance. Fourteen respondents in some way agree that organizational performance will be affected if the regulatory pressure present in supply
chain material flow.
Indirect effect It has been indicated that the findings has answer the research question that regulatory
can be potentially act as an external moderator in supply chain. Moderating variable describe as those which affect the direction or strength of a relation between an
independent… and dependent variable.” Respondents were asked to identify whether regulatory pressure would moderate the relationship between leadership as predictor on
supply chain outcome of organizational performance. The study found variety of
MIICEMA 2014 10-11 November 2014
Hotel Bangi-Putrajaya, Malaysia
206
arguments with 14 majority respondents agreed Appendix B, single respondent undecided, one respondent doesn’t agree, and 2 respondents were excluded. Here some of
the argument being highlighted by the respondents;
[…] regulatory of existing regulation can promote positive performance but there are time the regulatory did turn back the performance negatively because unfairly applied […]Chief
Operating Officer, Local transportation […]but Im sure when there is regulatory pressure on the material flows it will impact heavily on
the leadership style of the leaders commitment for example lobbying the government for additional information […]Professor, local public university
[…]this new element… of course leadership will slightly change depending on the extent of the impact that the new regulation bring to the organization…this agency requirement in terms of
the impact will required some sort of change in terms of technology and manpower […]Executive, Port Authority
[…]Any new regulatory implementation will create some kind of reaction during initial stages […] organization should continuously state the important and the need for the new regulation […]
in some cases this regulation will bring a negative impact to the organization Manager, National Research Centre
[…]Leadership is the major factor that makes things happens ... if someone don’t understand the regulation or do not stress its important it will definitely influence the organizational
performance. Manager, Local Car Manufacturer
Respondents also believe the present of new regulatory pressure will surely need the leader to make some adjustment in business process in order to ensure the worker
effectively implement regulatory requirement in supply chain activities. The alteration need time to effectively apply in the system and its definitely will add another business
process, additional cost, additional manpower, and additional process time that can slightly affect organizational performance if it is inadequately adopted.
4.1 Discussion From the study, it has been found that leadership style will definitely determine the
organization performance whether in term of monetary or quality achievement. Not surprisingly, respondents from regulatory bodies have coincide that transactional
leadership was seem favorable most of the time particularly in major decision making. In more complex and sophisticated business requirement for producer of product and
services for instance Aircraft industry player and National Research Centre it seem like open style charismatic leadership that were being exercise by the organization.
Startlingly, a automotive manufacturer was being described as being stereotyping transactional style because of over emphasize on time management that usually
overshadow other crucial business process. For other company that provides service that
MIICEMA 2014 10-11 November 2014
Hotel Bangi-Putrajaya, Malaysia
207
has foreign association with Japan or Korea companies, it’s generally practiced a participative leadership that motivates togetherness among employee in job performance.
For small locally own company that support port supply chain activity through delivery of service in cargo transfer, they are surprisingly practice both style either transactional or
transformational leadership that based on their preferred choice, their anticipation of the market and their company own capabilities.
In term of organizational performance, respondent that appears from organization that offered services to supply chain or moving and facilitating other people goods usually
very sensitive to their client need. Generally all of them either regulatory or service provider shipping, warehouse, logistic, transport has the goal to match organization
objective with the ever changing need of customer that always required services of the highest quality, in a reasonable time with an acceptable cost. Where else the organization
that move their own goods car manufacturer, research center, Aircraft assembler and maintenance typically have specific goal in term of quality and cost of producing the end
product that should have competitive edge over rival which can be transform into a realization of a higher sales.
Majority of the respondent is aware of the requirement set by the authority to monitor the movement of cargo well before it left the international port. Because any illegal cargo
that slip pass the regulatory agencies at the border will seriously threaten the livelihood of the public. To detect the illicit cargo and to exercise damage recovery after it left the
point of arrival will definitely cause tremendous amount of harm, cost, loss reputation and public unrest that will threaten the social and economic well being of the public.
These reason why they belief the present of regulatory pressure will have some kind of influence on the way the leaderships of the organization pursue higher business
performance in supply chain activities. 4.2 Implication
Contribution
An important aspect of this research has three contributions. First, theoretical significant is to apply an established theory in a new context of port supply chain activities in term
of the movement of goods conduct in the present of regulatory pressure that would moderately effect the linkage between leadership and organizational performance.
Companies should be willing to understand regulatory pressure through leadership and act upon these differences. Given the contradictory role of regulatory that interfere the
connection, companies can focus on supply chain management mechanism improvement in order to increase organization performance organization.
Second, methodological significance contribution in qualitative empirical research that will contribute by opting to study participant through extensive interview session as
oppose to predominant quantitative approach in investigating relationship between leadership practices of companies in Port Klang and the effectiveness and fulfilling firm
MIICEMA 2014 10-11 November 2014
Hotel Bangi-Putrajaya, Malaysia
208
obligation in the context of port supply chain management in cargo transfer. Moreover we assess the effect of supply chain management practices on the organization
performance. Multi context approach is engaged in order to enhance external validity of our outcome.
Finally, the managerial contribution will be that companies must carefully analyze the pros
and cons of regulatory requirement effects on company’s leadership practices and the organization outcome that was expected. Regulatory pressure demand attention and
resources from the internal practices of companies to avoid unnecessary cost that can ex
ceed companies’ potential benefit and ruined firm performance. Once the collaboration relationships have been developed it must be continuously monitored. Changes in
relationships context of SCM leadership practices must be analyze and evaluated in relation to the question of what justified degree of regulatory pressure that moderate the
specific connection to the organization performance in port supply chain activities.