Effect of Corporate Governance, Integrated Quality Management, Corporate Social Responsibility on Competitive Capabilities and Operational Performance

By Renreng, Mulyahati; Serang, Serlin et al. | Researchers World, October 2016 | Go to article overview

Effect of Corporate Governance, Integrated Quality Management, Corporate Social Responsibility on Competitive Capabilities and Operational Performance


Renreng, Mulyahati, Serang, Serlin, Said, Syahnur, Mapparenta, Researchers World


INTRODUCTION:

Emerging paradigm shift in marketing theory that focus on long-term relationships, rather than short-term exchange transactions, led to significant improvements in companies. Through interacting with long-term customers, companies can gain access to a detailed and useful knowledge about the consumer. A loyal customer is one of the capital which is the most important relationship that the company should be more attentive. Companies build relationships and strategic alliances through different mediated business partners, such as networks, cross-boundary teams, supply chain partnering and strategic alliances to disseminate knowledge and innovation. Capital represents the consumer cooperative relations and strategic change partners (Roos & Roos, 1997). Competitive operational performance is determined by the quality of output, production cost, speed of delivery, flexibility of production systems and the quality of design which in turn impact the success of the company's operations.

Economic globalization, happening today, has brought changes in the business environment and competition. Competitive advantage is the heart of the company's performance to compete and develop, so the company is able to create a customer, and it can defend itself from the competitive pressures of the market. When an organization starts paying attention to the global competitive environment, the innovation will be one of the key success factors. In the concept of operations, innovation strategy will help organizations operate on a competitive level based on non-price competition factors such as quality, delivery, reliability, and responsiveness (Porter, 1980). The conditions show that in the context of the operation, an innovation strategy can be applied to the manufacturing industry, service industry and other organizations both for-profit and nonprofit (Chase, Aquilano, & Jacobs, 1998).

The global competition in the free trade area of ASEAN (AFTA) is a form of collective agreements of ASEAN countries to establish a free trade zone in order to improve the economic competitiveness of the region, by making ASEAN as a base production of world trade in creating a regional market for 500 million people. AFTA has both benefits and challenges for manufacturing companies in Indonesia, especially in Makassar. Such benefits that market opportunities increasingly large and spacious for Indonesian products to increase the incomes of the population, low production costs and provide certainty for employers to invest in the search for consumer choice or segment of the domestic market with the price level and the competitive quality and creation of a wide range of cooperation in run business is increasingly open alliance or alliance with other ASEAN countries. The challenges faced by the employers in the global competition are manufacturing companies are required to continuously improve the ability to conduct business in a professional manner which can only make them compete with product competitiveness as mediated several other countries. So it is important to achieve the operational performance by striving for continuous improvement.

The fact that happened today shows that in Makassar, an Industrial Area, there were 106 companies, with various types of businesses and their resulting production units. There are manufacturing companies which has considerably low operational performance. This can be measured by the quality level of output produced by the growth-declined companies, increased production cost, slow delivery speeds on the market, flexibility of the production system is erratic and design quality is low. This condition causes uncertain experiences to the company whereas the opportunities reduce and trends insolvent, due to the increasing operational costs of production. The following data show the percentage of the performance of our manufacturing operations in Makassar within five years (2009 - 2013):

The decline in the performance of our manufacturing operations happens because the company has not been able to foster the competitiveness among its competitors who are engaged in the same field both national and international manufacturers. …

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