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1 – 10 of 28Danu Patria, Petrus Usmanij and Vanessa Ratten
Traditional industry was initially built with kinship, cultural value, and unique characters representing a particular system of production. However, current industry challenges…
Abstract
Traditional industry was initially built with kinship, cultural value, and unique characters representing a particular system of production. However, current industry challenges pressurized traditional industry bond of primordial system with the need of adaptations to survive. Some traditional industry may resist the twenty-first-century challenges and pressures, but many of them are transforming their cultural and production characters to adapt modern business competitions. Indonesian traditional furniture industry Jepara has their familial system of productions which constitute “flexible specialization” where particular kinship and work contract created from a very specialized household small-scale furniture producer. However, this production system in fact struggles and is contrasted with the community needs to survive in the industry. The likely occurring progress of traditional industry are then remaining on the senior members of the industry to preserve knowledge which has empowered over many generations, while the younger generations consider transforming their ability for survivability and better financial rewards.
This chapter is the further elaboration of how Indonesian rural traditional furniture industry in Jepara presents its survivability and whether it is sustainable. This chapter exemplifies participants’ quotes and statements which create anxiety toward their future, cultural value, bond of industry kinship, and doubting their ability to withhold global and local pressures.
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Danu Patria, Petrus A. Usmanij and Vanessa Ratten
Small traditional industry has been recognized as an important local economy that support cultural industry and is significant in many parts of the world, particularly in…
Abstract
Small traditional industry has been recognized as an important local economy that support cultural industry and is significant in many parts of the world, particularly in developing countries. The significance of this type industry as a poverty barrier, enables jobs for local rural villagers, and their role in continuing local community based cultural activities have become obvious. However, as the current modern days global pressures affecting many traditional people in developing countries, pathways of small traditional industry toward local sustainable development remain unclear. Further continuous investigations are still required on how this industry provide the platform for greater local, regional and global sustainability. Literatures and debates on the sustainability of the rural developing country concerning small traditional industries may even begin from the establishment of Brundtland sustainability commission in 1987. The conflict between brown and green agenda in Brundtland commission may also point to small-scale traditional industry growth in the developing world. Cultural traditional industries in developing countries could better lead to local sustainability pathway. On the other hand, conflict of the use of natural resources and competition may create different stories. How traditional industry in developing country survive and further innovate for development is a significant knowledge to understand. This chapter uses Jepara traditional furniture industry in Central Java – Indonesia which has been the subject of prolonged study on how small-scale industry implicated to global competition and pressures of raw material resources decline. This chapter further reviews previous research and recent study on Jepara industry upgrade and innovation, and how likely innovation may prosper for the future sustainability of this type of industry.
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Conventional wisdom regarding the gains from globalization states that, if managed correctly, it can lead to increased market opportunities for firms to grow and prosper…
Abstract
Conventional wisdom regarding the gains from globalization states that, if managed correctly, it can lead to increased market opportunities for firms to grow and prosper, including small and medium enterprises (SMEs). Nevertheless, some sectoral case studies raise questions regarding the terms under which SMEs in developing countries participate in global production systems and the scope of opportunities that globalized markets actually do offer for industrial development and SME upgrading in developing countries.
Aries Susanty, Ling Sri Sumiyati, Syaiful Syaiful and Zahrotun Nihlah
First, this study aims to examine the level of implementation of lean manufacturing (LM) practices by the small- and medium-sized enterprises (SMEs) in the wooden furniture…
Abstract
Purpose
First, this study aims to examine the level of implementation of lean manufacturing (LM) practices by the small- and medium-sized enterprises (SMEs) in the wooden furniture industry in Jepara. Second is to examine the impact of LM practices on operational performance (OP) and business performance (BP). Third is to examine the impact of LM practices on BP with OP as a mediating and moderating variable. OP is the quantifiable aspect of the process of an organisation, such as production cycle time, reliability and inventory turnover, whereas BP is usually related to the responsibility of the firms to their shareholders and has the goal of profit maximization.
Design/methodology/approach
This study used primary data collected through an offline questionnaire. The questionnaire was intended to identify the extent of the implementation of LM practices and the level of OP and BP achieved by SMEs. The LM practices consist of 6 dimensions with 26 indicators; OP, 4 dimensions with 11 indicators; and BP, 3 dimensions with 9 indicators. The data obtained from the questionnaire were processed via partial least squares (PLS) regression using the SmartPLS software. PLS is generally used to assess the extent to which LM practices predict values in OP and BP.
Findings
A total of 100 questionnaires were administered, of which 81% were properly filled, completed and returned. The result of the study confirms that LM practices should be applied collectively and comprehensively as each practice is interdependent. Moreover, it confirms that these practices have a direct effect on OP and BP and that OP can drive broader BP measures. Finally, the result confirms that these practices can improve BP indirectly with OP as a mediator variable. While the empirical evidence in this study supported the role of OP as a mediating variable between the implementation of LM practices and OB, it did not support the role of OP as a moderating variable.
Research limitations/implications
First, it is arguable that LM practices, OP and BP are only measured by the Likert scale, which would likely create bias and inconsistency from the owners or managers of SMEs in expressing the level of LM practices and performances achieved by the SMEs in the wooden furniture industry. Future research may help establish qualitative approaches to better measure the LM practices as well as the OP and BP through observation and probing. Second, this study was limited geographically (limited to only the SMEs in the wooden furniture industry in Jepara and did not cover all regions in Central Java as well as in Indonesia). Therefore, a wider geographical area could be considered, including the other regions in Indonesia which also produce wooden furniture.
Practical implications
This study practically contributes to the LM body of knowledge by identifying the relationships among the LM practices, OP and BP in SMEs. Understanding these relationships will help the owner or managers of SMEs make better decisions in achieving the OP and BP. The owner or managers of SMEs who implement the LM practices individually may experience disappointing performance results as these practices should be applied collectively and comprehensively.
Social implications
The LM practices may help the owners or managers of the SMEs to be competitive and achieve the optimum result.
Originality/value
This is the first known study that adopts the PLS framework to examine how OP measurement affects the relationship between the LM practices and BP in the case of the SMEs in Indonesia.
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The Indonesian government has been trying to support the development of small and medium enterprises (SMEs) in the country, as these enterprises are expected to play a crucial…
Abstract
Purpose
The Indonesian government has been trying to support the development of small and medium enterprises (SMEs) in the country, as these enterprises are expected to play a crucial role not only for employment creation but also for GDP formation and export development. The paper aims to address the following three questions. First, are networks important for the development of SME clusters, especially for those involved in export activities? Second, in what type of clusters are networks well developed? Third, what is the role of government; does it also play as an important network for SME cluster development?
Design/methodology/approach
This paper is based on an ongoing research on the importance of networks in the development of export‐oriented SME clusters in Indonesia. Although the paper also discusses other important issues related to the development of SMEs in the country, i.e. constraints facing the enterprises and women entrepreneurs, the paper focuses on the importance of networks.
Findings
First, SMEs are of overwhelming importance to Indonesia because they account for more than 90 percent of all firms outside of the agricultural sector. Second, the main constraints faced by small entrepreneurs are, lack of finance and difficulties in marketing. Third, the representation of women entrepreneurs in Indonesia is still relatively low which can be attributed to various factors, e.g. low level of education and lack of training opportunities that make Indonesian women severely disadvantaged in both the economy and society. Finally, although in general Indonesia is not well represented with small and medium industrial clusters that feed into global commodity chains, some clusters have gradually become export‐oriented. Among many factors, well developed networks especially with traders, trading houses, and foreign tourists are indeed an important factor for their increasingly export activities. Even these agents have played more important role than supports from government for their successful export.
Originality/value
The paper examines the importance of networks for the export‐oriented SME clusters in Indonesia.
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Martin Perry and Tulus Tahi Hamonangan Tambunan
The purpose of this paper is to use case study evidence to explain that enterprise agglomeration in itself may not advantage business development. Agglomeration has the potential…
Abstract
Purpose
The purpose of this paper is to use case study evidence to explain that enterprise agglomeration in itself may not advantage business development. Agglomeration has the potential to bring enterprise advantage but whether this occurs depends on additional supportive conditions.
Design/methodology/approach
The paper re‐examines case studies of Indonesia clusters from a more critical perspective than adopted in their original presentation. This critical perspective follows a realist assessment of agglomeration in which advantages depend on specific business environments.
Findings
Five processes are identified that limited the advantage obtained from agglomeration: internal segmentation; enterprise independence; technological pooling; excessive competition and linkage dependencies. Three attributes that influence whether agglomeration assists business and regional development: enterprise diversification, entry barriers and cluster scale.
Research limitations/implications
The paper is limited by its reliance on previously completed case studies rather than a set of purpose‐designed case studies.
Practical implications
Business promotion agencies should be aware that not all enterprise clusters have an equal likelihood of sustaining economic growth.
Originality/value
The combined evidence from previously published case studies of Indonesian cluster experiences adds to the understanding of the conditions required for agglomeration advantages to be realised.
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Aries Susanty, Diana Puspita Sari, Dyah Ika Ika Rinawati, Ratna Purwaningsih and Faisal Hasbullah Sjawie
The purpose of this paper is to implement the combined approach of Decision Making Trial and Evaluation Laboratory (DEMATEL) and system dynamic (SD) for examining the impacts of…
Abstract
Purpose
The purpose of this paper is to implement the combined approach of Decision Making Trial and Evaluation Laboratory (DEMATEL) and system dynamic (SD) for examining the impacts of several elements on the implementation of green supply chain management (GSCM) practices in the furniture industry concerning the amount of wood waste resulted and the demand of wood materials.
Design/methodology/approach
The paper develops an SD-based model by using four approaches, i.e., “demand of furniture”, “raw material”, “revenue of furniture industry” and “the implementation of green supply chain management (GSCM) practices”.
Findings
The simulation results have shown that the best conditions occur in the fourth scenario or a combined scenario. This scenario can guarantee a decrease in need of wood and discarded wood waste due to the use of wood waste for raw material by some industries. This scenario can thus increase the share of wood waste used as raw materials.
Research limitations/implications
The first limitation of this study is on the calculation of the amount of wood, which has used the data of wood products obtained from the Central Java Provincial Agency of the Environment and Forestry. This calculation has not taken into account the forest area degradation. Second, the demand for furniture has been converted from the historical data of domestic and foreign sales. Third, the model used in this study has not considered the decrease of the production cost and the increase of the profit gained by the wooden furniture small- and medium-sized enterprises that use the wood waste as part of their raw material.
Practical implications
This research provides essential insights into the context of implementing the policies to increase the implementation of GSCM practices.
Originality/value
This research can make a difference in two aspects. First, it has tested policies, not in isolation. It has simultaneously tested various combinations of policies because the furniture industry can be seen as a system with complex relationships among the elements. Second, this study can broaden scientific insights related to the use of the DEMATEL method in the SD methodology.
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Yuli Budiati, Wisnu Untoro, Lilik Wahyudi and Mugi Harsono
This study aims to examine the effect of entrepreneurial orientation (EO) on performance and mediation differentiation strategies and market development in small and medium…
Abstract
Purpose
This study aims to examine the effect of entrepreneurial orientation (EO) on performance and mediation differentiation strategies and market development in small and medium enterprises (SMEs).
Design/methodology/approach
This research was conducted using a survey method with a population of furniture SMEs in Jepara, Central Java, Indonesia using a sample area by collecting 158 questionnaires. The data analysis method used the partial least square.
Findings
The result shows that EO has an impact on differentiation, market development and performance. Differentiation strategies and market development mediate the influence of EO and performance. The differentiation strategy further mediates the influence of EO on market development and market development mediates the effect of differentiation on performance.
Practical implications
Managers instill entrepreneurial practice in the organization by proactively creating the market and taking high-risk jobs to provide quality products and services. SMEs require capabilities that are difficult to imitate in creating designs and product quality that are different, providing pre and post-sales services and maintaining good relationships with customers and partners. SMEs emphasize flexibility and speed of operation by adjusting the production process to short waiting times and reliable delivery. The government must support general training and market information, network development, access to capital and knowledge transfer.
Originality/value
This paper explains the importance of differentiation and market development strategies in determining the relationship between EO and performance that has not been explored in the context of SMEs in developing countries.
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