LEMBAR

HASIL PENILAIAN SEJAWAT SEBIDANG ATAU PEER REVIEW

KARYA ILMIAH : JURNAL ILMIAH

..............................

Judul Jurnal Ilmiah (Artikel) : Governance structure choice in the supply chain of broiler chickens: an

empirical study in Central Java, Indonesia

Jumlah Penulis : 4 orang

Status Pengusul : penulis pertama/utama

Identitas Jurnal Ilmiah : a. Nama Jurnal : International Journal of Services,

Technology and Management,

b. Nomor ISSN : 1741525X, 14606720

c. Volume, nomor, bulan tahun : 24 (5/6), .414–444. Agustus 2018

d. Penerbit : Inderscience Publishers.

e. DOI artikel (jika ada) : DOI: 10.1504/IJSTM.2018.10014971

f. Alamat web jurnal :

JURNAL : http://www.inderscience.com/info/inarticle.php?artid=94442 ARTIKEL: http://eprints.undip.ac.id/64774/ .

g. Terindeks di Scopus/Scimagojr/SJR=0,14 (2017) dan Q4.

Kategori Publikasi Jurnal Ilmiah : Jurnal Ilmiah Internasional

(beri pada kategori yang tepat) Jurnal Ilmiah Nasional Terakreditasi

Jurnal Ilmiah Nasional Tidak Terakreditasi

Hasil Penilaian Peer Review :

Komponen

Yang Dinilai

Nilai Maksimal Jurnal Ilmiah

Nilai Yang

Diperoleh Reviewer 1 Reviewer 2

a. Kelengkapan unsur isi jurnal(10%) 2,35 2,50 2,43

b. Ruang lingkup dan kedalaman

pembahasan (30%) 5,88 6,25

6,07

c. Kecukupan dan kemutahiran

data/informasi dan metodologi

(30%) 7,06

6,25

6,65

d. Kelengkapan unsur dan kualitas

penerbit (30%) 4,71 5,00

4,85

Total = (100%) 20,00 20,00 20,00

Nilai Pengusul = (60%)*20,00 = 12,00

Semarang,

Reviewer 1

Prof.Ir. Togar M. Simatupang, M.Tech.,Ph.D.

NIP. 196812311993031015

Unit kerja: Sekolah Bisnis dan Manajemen

(SBM) Insititut Teknologi Bandung

Reviewer 2

Prof. Ir. I Nyoman M.Eng.Ph.D.

NIP. 196912311994121076

Unit kerja :Teknik Industri ITS

LEMBAR

HASIL PENILAIAN SEJAWAT SEBIDANG ATAU PEER REVIEW

KARYA ILMIAH : JURNAL ILMIAH

..............................

Judul Jurnal Ilmiah (Artikel) : “Governance structure choice in the supply chain of broiler chickens: an

empirical study in Central Java, Indonesia”

Jumlah Penulis : 4 orang

Status Pengusul : penulis pertama/utama

Identitas Jurnal Ilmiah : a. Nama Jurnal : International Journal of Services

Technology and Management

b. Nomor ISSN : 1741525X, 14606720

c. Volume, nomor, bulan tahun : 24 (5/6), .414–444. Agustus 2018

d. Penerbit : Inderscience Publishers.

e. DOI artikel (jika ada) : DOI: 10.1504/IJSTM.2018.10014971

f. Alamat web jurnal :

JURNAL : http://www.inderscience.com/info/inarticle.php?artid=94442

ARTIKEL: http://eprints.undip.ac.id/64774/

g. Terindeks di Scopus/Scimagojr/SJR=0,14 (2017) dan Q4.

Kategori Publikasi Jurnal Ilmiah : Jurnal Ilmiah Internasional

(beri pada kategori yang tepat) Jurnal Ilmiah Nasional Terakreditasi

Jurnal Ilmiah Nasional Tidak Terakreditasi

Hasil Penilaian Peer Review :

Komponen

Yang Dinilai

Nilai Maksimal Jurnal Ilmiah

Nilai Akhir

Yang

Diperoleh

Internasional

Nasional

Terakreditasi

Nasional

Tidak

Terakreditasi

a. Kelengkapan unsur isi jurnal (10%) 4,00 2,35

b. Ruang lingkup dan kedalaman

pembahasan (30%)

12,00 5,88

c. Kecukupan dan kemutahiran

data/informasi dan metodologi (30%)

12,00 7,06

d. Kelengkapan unsur dan kualitas

terbitan/jurnal (30%)

12,00 4,71

Total = (100%) 40,00 20,00

Nilai Pengusul = 60%*20,00 = 12,00

Catatan Penilaian artikel oleh Reviewer : 1. Kesesuaian dan kelengkapan unsur isi jurnal: Susunan paper telah memuat abstract, introduction, literature review, methods of the research,

results, and conclusions. Unsur paper sudah lengkap dan sesuai dengan petunjuk penulisan jurnal.2. Ruang lingkup dan kedalaman pembahasan: Ruang linkup paper termasuk dalam bidang Teknik Industri yang membahas tentang pilihan tata

kelola pada industri produksi ayam pedaging. Penulis telah berhasil dengan baik menurunkan hipotesis tentang pilihan tata kelola. Ada baiknya

model konseptual ditempatkan di awab sebelum menjelaskan hipotesis untuk memudahkan pembaca melihat gambaran besar dan alur penalaran dari model.

3. Kecukupan dan kemutakhiran data/informasi dan metodologi: Data yang dikumpulkan sejumlah 125 responden. Metode analisis yang

digunakan adalah Structural Equation Modelling (SEM) dengan prosedur yang lengkap. Referensi terbaru sudah memadai.4. Kelengkapan unsur dan kualitas terbitan: Paper telah diterbitkan baik dalam bentuk daring dan cetakan. Jurnal merupakan terindeks di SCOPUS

dengan kategori Q4. Penerbit inderscience termasuk yang diragukan oleh DIKTI

Bandung, 19 September 2018

Reviewer 1

Prof. Ir. Togar M. Simatupang, Ph.D.

NIP. 196812311993031015

Unit kerja : Sekolah Bisnis dan Manajemen (SBM)

Insititut Teknologi Bandung (ITB)

LEMBAR

HASIL PENILAIAN SEJAWAT SEBIDANG ATAU PEER REVIEW

KARYA ILMIAH : JURNAL ILMIAH

..............................

Judul Jurnal Ilmiah (Artikel) : Governance structure choice in the supply chain of broiler chickens: an

empirical study in Central Java, Indonesia

Jumlah Penulis : 4 orang

Status Pengusul : penulis pertama/utama

Identitas Jurnal Ilmiah : a. Nama Jurnal : International Journal of Services,

Technology and Management

b. Nomor ISSN : 1741525X, 14606720

c. Volume, nomor, bulan tahun : 24 (5/6), .414–444. Agustus 2018d. Penerbit : Inderscience Publishers.

e. DOI artikel (jika ada) : DOI: 10.1504/IJSTM.2018.10014971

f. Alamat web jurnal :

JURNAL : http://www.inderscience.com/info/inarticle.php?artid=94442 ARTIKEL : http://eprints.undip.ac.id/64774/

g. Terindeks di Scopus/Scimagojr/SJR=0,14 (2017) dan Q4.

Kategori Publikasi Jurnal Ilmiah : Jurnal Ilmiah Internasional

(beri pada kategori yang tepat) Jurnal Ilmiah Nasional TerakreditasiJurnal Ilmiah Nasional Tidak Terakreditasi

Hasil Penilaian Peer Review :

Komponen

Yang Dinilai

Nilai Maksimal Jurnal Ilmiah

Nilai Akhir

Yang

Diperoleh

Internasional

Nasional

Terakreditasi

Nasional

Tidak

Terakreditasi

a. Kelengkapan unsur isi jurnal (10%) 4,00 2,50

b. Ruang lingkup dan kedalaman

pembahasan (30%)

12,00 6,25

c. Kecukupan dan kemutahiran

data/informasi dan metodologi (30%)

12,00 6,25

d. Kelengkapan unsur dan kualitas

terbitan/jurnal (30%)

12,00 5,00

Total = (100%) 40,00 20,00

Nilai Pengusul = 60%* 20,00= 12

Catatan Penilaian artikel oleh Reviewer : 1. Kesesuaian dan kelengkapan unsur isi jurnal: Cukup lengkap dan bidangnya sesuai dengan bidang yang diklaim penulis di deskripsi tentang penulis.2. Ruang lingkup dan kedalaman pembahasan: Cukup baik, ada hypothesis yang diusulkan dan ada testing hypothesis secara statistik.. 3. Kecukupan dan kemutakhiran data/informasi dan metodologi: Menggunakan metode standard dan cukup, walaupun mungkin bisa ditambahkan beberapa analisis yang lumrah dilakukan untuk penelitian dengan metodologi survey seperti ini untuk menjaga rigors.

4. Kelengkapan unsur dan kualutas terbitan: Cukup baik, jurnal melalui proses review yang baik, walaupun reputasi jurnal maupun penerbitnya masih relatif rendah.

Surabaya, 23 September 2018

Reviewer 2

Prof. Ir. I Nyoman M.Eng.Ph.D.NIP. 196912311994121076 Unit kerja : Teknik Industri ITS

Scopus

Document details

16 of 38

Governance structure choice in the supply chain of broiler chickens: Anempirical study in Central Java, Indonesia (Article)

, , ,

Department of Industrial Engineering, Diponegoro University Prof Soedarto, Campus Tembalang, Semarang,IndonesiaBina Nusantara University, Jakarta, Indonesia

AbstractThis study aims to clarify the dominant factors (which can be defined as antecedent factors) influencing the structurechoice in the supply chain governance of traders and middlemen of broiler chickens. This study has utilised closed-ended questionnaires with a five-point Likert scale distributed to several traders and middlemen of broiler chickens inthe traditional town market in Semarang City of Central Java Province. One hundred and twenty-five copies of thequestionnaire were administered to the traders of broiler chickens in these marketplaces: North Johar, Central Johar,South Johar, Bulu, Karangayu, Peterongan, and Jatingaleh. Additional information was collected through follow-uptelephone interviews and archive records. Data acquired from the questionnaire were processed using structuralequation modelling (SEM). The findings indicate that the transaction cost economy and the collaborative advantagehave a significant positive effect on the level of integration; in this case, the effect of the transaction cost economics isstronger than that of collaboration advantages. The findings also suggest that the transaction cost economicssignificantly depends on uncertain conditions between traders and the middlemen; whereas, the collaborativeadvantage significantly depends on uncertain conditions and collaboration capability. Copyright © 2018 InderscienceEnterprises Ltd.

SciVal Topic Prominence

Topic:

Prominence percentile: 96.509

Author keywordsBroiler chicken Indonesia Level of integration Semarang Supply chain TCE collaborative advantage

Transaction cost economics

Funding details

Funding textBiographical notes: Aries Susanty is a Permanent Lecturer in the Department of Industrial Engineering, DiponegoroUniversity, Indonesia. Additionally, she is also a Lecturer in Operations Management at Mercu Buana University and aLecturer in International Classes at Telkom University. She received her Bachelor, Master, and PhD degrees all inIndustrial Engineering from Bandung Institute of Technology, Indonesia. She has published and presented herresearches nationally and internationally in the areas of industrial engineering, organisation performance, operationsand supply chain management, and corporate governance. Her researches have been funded by the IndonesianMinistry of Industry, Indonesian Institute of Corporate Governance (IICG), the Indonesian Ministry of Education, theRegional Planning Board of West Java Province, and the Indonesian Ministry of Energy and Mineral Resources.

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REVIEW PROCESS

RESUME KRONOLOGIS KORESPONDENSI DARI EMPIRICAL MODEL OF TRUST, LOYALTY, AND BUSINESS PERFORMANCE OF THE DAIRY MILK SUPPLY CHAIN:A COMPARATIVE STUDY

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18/06/2019 Gmail - Ganti password (IJSTM_157912 Submission Acknowledgement.

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aries susanty <ariessusanty@gmail.com>

Ganti password (IJSTM_157912 Submission Acknowledgement.1 message

Ahmad Syamil asyamil gmail com <asyamil@gmail.com> Tue, Oct 11, 2016 at 6:25 PMTo: aries susanty <ariessusanty@gmail.com>

AsSalaamu alaikum waRahmatuLlaahi waBarakatuh.

Trims.Alhamdulillah saya juga dapat langsung dari Inderscience.PS: Sebaiknya password di bawah digani karena sudah disebarkan ke orang lain :-)

WaSsalaamu alaikum waRahmatuLlaahi waBarakatuh

Ahmad SyamilBinus Business SchoolBina Nusantara (Binus) University Hang Lekir 1/ 6, SenayanJakarta 10170, Indonesia

http://www.linkedin.com/in/asyamil2

On Tue, Oct 11, 2016 at 4:51 PM, aries susanty <ariessusanty@gmail.com> wrote: ---------- Forwarded message ---------- From: "Online Submissions" <noreply@indersciencemail.com> Date: Oct 11, 2016 3:28 PM Subject: IJSTM_157912 Submission Acknowledgement To: "Dr. Aries Susanty" <ariessusanty@gmail.com> Cc:

Dear Dr. Aries Susanty,

Thank you for submitting your article entitled "AN EMPIRICAL STUDY OF THE ANTECEDENT FACTORSAFFECTING GOVERNANCE STRUCTURE CHOICE IN THE SUPPLY CHAIN OF BROILER CHICKENS INCENTRAL JAVA, INDONESIA" (Submission code: IJSTM-157912) for the International Journal of ServicesTechnology and Management (IJSTM).

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18/06/2019 Gmail - Refereeing Process: Editor comments IJSTM-157912

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Refereeing Process: Editor comments IJSTM-157912 6 messages

Inderscience Online <noreply@indersciencemail.com> Mon, Feb 6, 2017 at 11:09 AMReply-To: Inderscience Online <noreply@indersciencemail.com>, Submissions Manager<submissions@inderscience.com>To: "Dr. Aries Susanty" <ariessusanty@gmail.com>, Dr Ahmad Syamil <asyamil@binus.edu>, Dr Hery Suliantoro<suliantoro_hery@yahoo.com>, Mrs Evelin Siburian <siburian.eveline@yahoo.com>, Benny Tjahjono<b.tjahjono@cranfield.ac.uk>

Dear Author(s), We have received the review reports for your paper "AN EMPIRICAL STUDY OF THE ANTECEDENT FACTORSAFFECTING GOVERNANCE STRUCTURE CHOICE IN THE SUPPLY CHAIN OF BROILER CHICKENS INCENTRAL JAVA, INDONESIA". We require now that you implement in your submission the following recommendations made by the reviewers, by nolater than 1 March 2017: Reviewer A Comments: ================== Changes which must be made before publication: The paper presents a study on the factors affecting governance structure of chicken supply chain. The study wasconducted in Central Java with data collected from chicken traders that supply middlemen for ultimate supply totraditional markets. Overall the paper is quite well written and the analysis looks sound. However, I have fewconcerns: 1. The sample is taken from chicken traders only while other supply chain players are not involved. In addition, therelationships addressed is only between chicken traders and the middlemen. It seems to me that this study deals witha dyadic relationships, but from the perspective of chicken traders. I think this has to be mentioned somewhere in thepaper. 2. The title should be revised. It is too long. In addition, if "broiler chicken" is important to be mentioned in the title thanone would expect the results are for broiler chicken only. But the author used the framework of pork supply chain.Wouldn't this mean that the framework and determining factors could well apply for different commodities? The sameapplies for Central Java. The introduction does not mention anything specific about Central Java. Are the resultsintended to be specific for Central Java or Central Java is just a place to take the sample (and the results may begeneralize-able for Indonesia or wider population)? 3. Introduction is too wordy but not quite effective in convincing the readers why this research is important? Fromknowledge point of view, what new knowledge that this paper may contribute? Why the current papers are not able toanswer the factors affecting the choice of supply chain governance in chicken supply chain? 4. I think Table 2 should be improved. It appears in the table that CC has only one item (but I think it actually has 4items). It also applies for WC. 5. The respondents are mostly the owner of very small enterprises. How would you ensure that they understand thequestions? 6. Some paragraphs are too long (example page 20, page 23, etc.). There are some language problems. Here are some that I noticed: Page 1: "... in literature" should be "in the literature" Page 4: "... be more prefer..." (grammatically wrong) Page 4: ".... which is remove.." Page 4: ".... would be make a cost..." Page 4: ".... could be more higher..." Page 15: "This study was conducted by using SEM..". I think this statement should be revised. SEM is only formodelling / data analysis. Page 16: "...the researcher measuring..." ==> should be "...the researcher is measuring..." Page 16: "...to measures how well the authors...." ==> should be "....to measure how well the authors..." Page 16: "...were deemed to be invalid..." ==> should be "..were deemed invalid..." Reviewer B Comments: ==================

18/06/2019 Gmail - Refereeing Process: Editor comments IJSTM-157912

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Suggestions which would improve the quality of the paper but are not essential for publication: REVIEW: Abstract: • The methodology part of this paper and the analysis are mainly based on the survey data (from questionnaire).However, the abstract stated that semi-structured interviews were also used to draw the conclusion. I cannot find inthe paper how the interviews data were used to complement the study. Please be consistent whether both interviewsand surveys were used or not in this study. • I think, it is not appropriate to state the name of the software (AMOS 22) in the abstract. • The last sentence of the abstract has no context with previous sentences. CONTENT: • Paragraph 2 states: “According to Cooper and Ellram (1993), the scope of integration in SCM (from internal to external coordination) isrelated to supply chain governance structure. There were two extreme conditions in the supply chain governancestructure, i.e. spot market and integral integration……. Does it mean “external integration”? I think the spectrum of supply chain governance structure is from arm-lengthtransaction (spot market) to external integration. • There have been many study on TCE (transaction cost economics) and supply chain. Please clarify how thisresearch this research differs with the previous works. In other words, strong argument on the significant of thisresearch is required. • It is obvious that this manuscript used the conceptual model developed by Ji, Felipe, Briz, and Trienekens (2012).The only difference of this study with Ji et al (2012) is the object of the study. Therefore, the authors need to clarifyWhy Ji et al.’s framework was used? • Please explain why this manuscript uses the level of integration to measure the governance structure. • AEC stands for ASEAN Economic Community. It is not ASEAN Economic Development. Moreover, the paragraphdiscussing AEC is unclear and confusing. • Literature Review: o As this study use the conceptual framework from Ji et al (2012), in which all hypotheses are essentially the same, Ido not see urgency to establish other arguments for hypotheses development. • Section 3.2 The Sample of Study o The first sentence of this section mentioned that “….with help from LISREL software” while other parts of the paperstated that this research used AMOS 22 software. Please be consistent. • Section 3.4 o What is the purpose of semi-structured interviews (see previous comments) • Section 3.3 Instruments and Measures o Please make sure which instruments were derived from Ji et al (2012) and which were developed from Grover andMaholtra (2003) o Some of instruments used in this study are questionable. The instruments for The level of integration is notconvincing, please clarify this by referring to the established instruments for measuring the level of integrations suchas: ♣ Flynn, B.B., Huo, B., Zhao, X., 2010. The impact of supply chain integration on per- formance: a contingency andconfiguration approach. Journal of Operations Management 28, 58–71. ♣ Narasimhan, R., Kim, S.W., 2002. Effect of supply chain integration on the rela- tionship between diversification andperformance: evidence from Japanese and Korean firms. Journal of Operations Management 20, 303–323. o Instruments to measure “collaborative advantage” differ with Ji et al’ (2012), and those used by this paper aremisleading. Please elaborate this. • Section 4.1 Validy and Reliablity: o Please provide strong arguments why Spearmen correlation was used to measure construct validity. As thisresearch used SEM, why this paper did not use the validity test provided by SEM (please see Anderson & Gerbing,1982 or Ahire and Devaraj, 2001) • Figure 2 does not give any meaning. • Figure 3. All R values in this Figure are above 1. Please use standardize value of SEM. • The paragraph after Figure 3 is well too long. Please summarize it. • Please provide Bi-variate relationship amongst variables (both latent and observed variables) • Section 4.4 Hypotheses Test o The paragraph and bullet points below Table 5 are useless as they are similar with Table 5. Authors should focusmore on discussing what do the results mean to the theory as well as to the practice. o The discussion below the bullet points are also unclear. The unsupported relationship between asset specify andTCE might be caused by the fact that asset specify in the trader-middleman transaction is very low. The SEM used in this study are merely explaining the relationship between latent variables, explaining the cause ofunsupported hypothesis using the item level i.e. mean of AS1, AS2 etc. (instead of latent variable level) is notappropriate. Please provide better arguments Reviewer's annotated version file: http://www.inderscience.com/revFile.php?id=1365536 NOTE: Please send an email to the editor to acknowledge the reception of this email notification. The editor needs tomake sure that messages reach the authors and don't delay the review process.

18/06/2019 Gmail - Refereeing Process: Editor comments IJSTM-157912

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- - - - - - - - - - - - - - - - - - - - - Instructions 1) To help the reviewer(s) verify that you have made the required corrections, please append a point-by-point reportdetailing how the changes have been made in line with each reviewer's comments at the beginning of your revisedmanuscript. 2) Responses to reviewers' comments and the revised manuscript must go together in the same single MS Word orPDF file, without revealing authors' identifications. 3) Append figures, images and tables at the end of your revised manuscript. 4) To upload your revised manuscript, please: Login via http://www.inderscience.com/ospeers/login.php (if you do not remember your username or password, you can recover it via http://www.inderscience.com/forgotpw.php) Then point your browser to http://www.inderscience.com/ospeers/admin/author/articlestatus.php?id=157912 andscroll-down to find the input box "Author's revised version of file". Click on 'Browse...' to select the revised document to be submitted and click 'Upload'. 5) Click on "Editor/Author Comments" to access the referee(s) comments and possible annotated files. 6) We advise you to use MS Word to edit your submission and make sure that the revisions within the document arepresented as "tracked changes" so they would be more easily seen by the editor and the reviewers. It is preferablethat you upload your revised manuscript using a MS Word file. If you have problems uploading the file with your revised manuscript please contact submissions@inderscience.comindicating the submission ID of your article. - - - - - - - - - - - - - - - - - - - - - Your prompt attention is much appreciated. Benny Tjahjono Int. J. of Services Technology and Management (IJSTM) submissions@inderscience.com

aries susanty <ariessusanty@gmail.com> Tue, Feb 7, 2017 at 4:16 AMTo: Inderscience Online <noreply@indersciencemail.com>, Submissions Manager <submissions@inderscience.com>

Dear Dr. Benny Tjahjono Thank you for your email I will try my best to finish revise my paper before your deadline. Best regards[Quoted text hidden]

Submissions <submissions@journalservice.net> Tue, Feb 7, 2017 at 4:24 PMTo: Benny Tjahjono <b.tjahjono@cranfield.ac.uk>Cc: aries susanty <ariessusanty@gmail.com>

Dear Benny Tjahjono,

FW for your information.

18/06/2019 Gmail - Refereeing Process: Editor comments IJSTM-157912

https://mail.google.com/mail/u/0?ik=1b72e64c13&view=pt&search=all&permthid=thread-f%3A1558555304887647619&simpl=msg-f%3A1558555… 4/5

Best regards,

Joane

submissions@inderscience.com

[Quoted text hidden]

This email has been checked for viruses by Avast an�virus so�ware. www.avast.com

Tjahjono, Benny <B.Tjahjono@cranfield.ac.uk> Mon, Feb 20, 2017 at 5:04 PMTo: "Dr. Aries Susanty" <ariessusanty@gmail.com>, Dr Ahmad Syamil <asyamil@binus.edu>, Dr Hery Suliantoro<suliantoro_hery@yahoo.com>, Mrs Evelin Siburian <siburian.eveline@yahoo.com>

Dear Authors,

This is just a gentle reminder of the deadline for the revised manuscript on 1 March 2017.

As the Special Issue editor, I once again ask you to align your manuscript with the theme of the specialissue, i.e. how this paper can possibly support the ASEAN Economic Community (AEC). This needs tobe clearly indicated in the Introduction section.

Should you require further clarification about the requested modifications, please do not hesitate tocontact me. I will try my best to support.

Best regards,

Benny Tjahjono

On behalf of the Special Issue Editors

[Quoted text hidden]

aries susanty <ariessusanty@gmail.com> Mon, Feb 20, 2017 at 5:07 PMTo: "Tjahjono, Benny" <B.Tjahjono@cranfield.ac.uk>

Dear Dr Benny..Thank you for your emailNoted...I will send my revised paper in this weekend Regards Aries[Quoted text hidden]

Tjahjono, Benny <B.Tjahjono@cranfield.ac.uk> Mon, Feb 20, 2017 at 5:16 PMTo: aries susanty <ariessusanty@gmail.com>

Dear Aries,

18/06/2019 Gmail - Refereeing Process: Editor comments IJSTM-157912

https://mail.google.com/mail/u/0?ik=1b72e64c13&view=pt&search=all&permthid=thread-f%3A1558555304887647619&simpl=msg-f%3A1558555… 5/5

Take your time, it was just a reminder.

Regards,

Benny

[Quoted text hidden]

1

ANSWERS FOR REVIEWER A Comment Answer Changes which must be made before publication: The paper presents a study on the factors affecting governance structure of chicken supply chain. The study was conducted in Central Java with data collected from chicken traders that supply middlemen for ultimate supply to traditional markets. Overall the paper is quite well written and the analysis looks sound. However, I have few concerns:

1. The sample is taken from chicken traders only while other

supply chain players are not involved. In addition, the relationships addressed is only between chicken traders and the middlemen. It seems to me that this study deals with a

dyadic relationships, but from the perspective of chicken traders. I think this has to be mentioned somewhere in the paper.

1.1. Following your suggestions, we have added additional statements. Please see the blue color text in Section 3.2. “The Sample of Study” on page 15.

2. The title should be revised. It is too long. In addition, if

"broiler chicken" is important to be mentioned in the title than one would expect the results are for broiler chicken only. But the author used the framework of pork supply chain.

Wouldn't this mean that the framework and determining factors could well apply for different commodities? The same applies for Central Java. The introduction does not mention anything specific about Central Java. Are the results intended to be specific for c (and the results may be generalize-able for Indonesia or wider population)?

2.1. We have revised the tittle

2.2. We have added the explanation why this study uses the pork supply chain framework on page 3:

“The conceptual model is used because there are some commonalities between the pork supply chain in China and the broiler chicken supply

chain in Indonesia. For example, actors of the broiler chicken supply chain consist of suppliers

of raw materials (day old chicks/DOCs, feeds, medicines and vaccines, as well as livestock equipment), the farmers, the middlemen

(collectors), the processors (slaughterhouses), the retailers and traders in the traditional market

(Oktavera and Andajani, 2013). On the other hand, the pork supply chain in China also consists of breeders, farmers (producers),

slaughterers, processors, middlemen, wet market, and supermarkets or grocery stores

(Kinsey, 2002). Furthermore, the issue addressed by Ji et al (2012) is quite similar to

this study, i.e., ensuring the quantity and quality of pork/broiler chicken through supply chain governance structure.”

2.3. The explanation about Central Java as the location of study has been added to the introduction section. Please check the text with blue color in the introduction section on page 5.

“In this research, the choice of supply chain

2

Comment Answer governance structure between traders and

middlemen is represented by the relationship between traders and middlemen in several traditional markets in Semarang City, Central

Java Province. Chicken business activities are dominant on Java Island especially in Central

Java Province (Muladno, 2008). Furthermore, the development of the chicken business follows the development of the wet markets around the

large populations of West, East, and Central Java. This has been supported by the

development of feed factories close to the ports of major population centers such as Jakarta and

Surabaya. Furthermore, the broiler chicken production in Central Java Province in 2011 was 105.839 metric tons, which was a huge number

compared with that of in other Indonesian provinces (United States Agency for

International Development, 2013). Furthermore, Semarang was chosen as a specific location for this study since most broiler meats are

consumed by people living in the big cities (Soedjana, 1999), such as Semarang”

2.4. The result of this study may not be generalized because of limited sample locations. We have added this explanation on page 28. Please check the text with blue color.

3. Introduction is too wordy but not quite effective in convincing the readers why this research is important? From knowledge point of view, what new knowledge that this paper may contribute? Why the current papers are not able to

answer the factors affecting the choice of supply chain governance in chicken supply chain?

3. Thank you very much for your suggestions. We have mentioned those issues in the previous version of this paper. However, we made some modifications to highlight those issues in this latest version. Please refer to page 3 onward.

“This research aims to make an empirical model for supply chain governance structure in the

broiler chickens supply chain. The previous studies have been mainly focused on

establishing the relationship between TCE and the choice of supply chain governance structure. This study will expand that relationship by

adding one important factor that should be considered when choosing the supply chain

governance structure. We argue that the choice of supply chain governance structure depends on not only TCE but also on collaborative

advantage between two actors in the supply chain. Moreover, we explore the factors that

influence transaction cost and collaboration advantages. “

3

Comment Answer

4. I think Table 2 should be improved. It appears in the table

that CC has only one item (but I think it actually has 4 items). It also applies for WC

4. Following your suggestions, we have revised Table 2.

5. The respondents are mostly the owner of very small enterprises. How would you ensure that they understand the questions?

5. The explanation about how to ensure that the respondents understand the questions has been added. Please check the text with blue color in Section 3.4. “Data Collection Procedure” on page 16. “Because the respondents are mostly the owners of very small enterprises, we accompanied the

respondents when they filled the questionnaire to make sure that they understood the questions.

We also gave the respondents some real-world examples when they could not understand the

meaning of questions. Sometimes, we help the respondents by translating the questionnaire into local Javanese language.”

6. Some paragraphs are too long (example page 20, page 23,

etc.). There are some language problems. Here are some that I noticed:

Page 1: "... in literature" should be "in the literature" Page 4: "... be more prefer..." (grammatically wrong) Page 4: ".... which is remove...” Page 4: ".... would be make a cost..."

Page 4: ".... could be more higher..." Page 15: "This study was conducted by using SEM...”. I think this statement should be revised. SEM is only for modelling / data analysis. Page 16: "...the researcher measuring..." ==> should be "...the

researcher is measuring..." Page 16: "...to measures how well the authors...." ==> should be "....to measure how well the authors..." Page 16: "...were deemed to be invalid..." ==> should be "...were deemed invalid..."

6. 6.1. We have separated some individual paragraphs into two or more paragraphs. 6.2. We have fixed the language problems.

ANSWERS FOR REVIEWER B Comment Answer ABSTRACT:

The methodology part of this paper and the analysis are mainly based on the survey data (from questionnaire). However, the abstract stated that semi-structured interviews were also used to draw the conclusion. I cannot find in the paper how the interviews data were used to

This study only used questionnaire to collect the data

although we also used interview to validate the result of questionnaires. However, following your suggestions, we deleted “semi-structured interviews were also used to draw the conclusion” from the abstract and also from the paper to reduce the

4

Comment Answer complement the study. Please be consistent whether both interviews and surveys were used or not in this study.

I think, it is not appropriate to state the name of the software (AMOS 22) in the abstract.

The last sentence of the abstract has no context with previous sentences.

confusion. The name of the software (AMOS 22) in the abstract

has been deleted

The last sentence of the abstract has been deleted CONTENT

Paragraph 2 states: “According to Cooper and Ellram (1993), the scope of

integration in SCM (from internal to external coordination) is related to supply chain governance

structure. There were two extreme conditions in the supply chain governance structure, i.e. spot market

and integral integration…….

Does it mean “external integration”? I think the spectrum of supply chain governance structure is from arm-length transaction (spot market) to external

integration.

It should have been vertical integration We have changed the sentences. Please see the text

with red color in the introduction section:

“According to Cooper and Ellram (1993), the scope of integration in SCM (from external to internal

coordination) is related to supply chain governance structure. There are two extreme conditions in the

supply chain governance structure, i.e. spot market and vertical integration…”

There have been many study on TCE (transaction cost economics) and supply chain. Please clarify how this research this research differs with the previous works. In other words, strong argument on the significant of this research is required.

The argument about the significance of the research has been added. Please see the text with red color in the introduction section as we mentioned earlier in our response to the first reviewer.

“This research aims to make an empirical model for

supply chain governance structure in the broiler chickens supply chain. The previous studies have been mainly focused on establishing the relationship

between TCE and the choice of supply chain governance structure. This study will expand that

relationship by adding one important factor that should be considered when choosing the supply chain governance structure. We argue that the choice

of supply chain governance structure depends on not only TCE but also on collaborative advantage

between two actors in the supply chain. Moreover, we explore the factors that influence transaction cost and collaboration advantages. “

The reason Ji et al. framework is used in this study has been added similar to our response to the first reviewer. Please see the text with red color in the

5

Comment Answer It is obvious that this manuscript used the conceptual

model developed by Ji, Felipe, Briz, and Trienekens (2012). The only difference of this study with Ji et al (2012) is the object of the study. Therefore, the authors need to clarify why Ji et al.’s framework was used?

Please explain why this manuscript uses the level of integration to measure the governance structure.

introduction section.

“The conceptual model is used because there are some commonalities between the pork supply chain in China and the broiler chicken supply chain in Indonesia. For example, actors of the broiler chicken supply chain consist of suppliers of raw materials (day old chicks/DOCs, feeds, medicines and vaccines, as well as livestock equipment), the farmers, the middlemen (collectors), the processors (slaughterhouses), the retailers and traders in the traditional market (Oktavera and Andajani, 2013). On the other hand, the pork supply chain in China also consists of breeders, farmers (producers), slaughterers, processors, middlemen, wet market, and supermarkets or grocery stores (Kinsey, 2002). Furthermore, the issue addressed by Ji et al (2012) is quite similar to this study, i.e., ensuring the quantity and quality of pork/broiler chicken through supply

chain governance structure..”

This manuscript uses the level of integration to measure the governance structure because there are different typologies in governance structure which depend on the level of integration, i.e., from the spot market, short-term contract, long-term contract, joint venture, strategic alliance, and vertical integration. The explanation about the different typologies in governance structure can be seen in the introduction section (the text with red color).

We have fixed it. Furthermore, we made several changes to discuss AEC more clearly.

“Regarding with the ASEAN Economic Community (AEC), the choice of supply chain governance structure between traders and middlemen of broiler chicken might be different before and after the AEC implementation. Because AEC will raise the trade and economic development among AEC countries, the traders of broiler chicken may prefer to choose transactions with the middlemen in spot market because AEC will enable easier movement of goods, services, investment, capital, and people including the increasing number of middlemen. Ultimately, AEC will offer new ways of coordinating supply chains, or access to new markets for established products. AEC will improve the scale efficiencies, dynamism, and competitiveness of ASEAN members (Sujatanond, et al 2013). In this case, “a single market and production base” by 2015, which means removing trade barriers and impediments, would make the costs of internal

6

Comment Answer

AEC stands for ASEAN Economic Community. It is

not ASEAN Economic Development. Moreover, the paragraph discussing AEC is unclear and confusing.

coordination (such as the costs of employees and managers) could be higher than the costs of using independent market such as external providers (Duval and Feyler, 2016). There will be the free flow of goods, services, investment capital and skilled labor following the liberalization. These will include tariff reductions and streamlining of certain administrative procedures (Sujatanond, et al 2013). However, their propositions must be proven by further research.

Literature Review: o As this study use the conceptual framework from

Ji et al (2012), in which all hypotheses are essentially the same, I do not see urgency to establish other arguments for hypotheses development.

We still put some hypothesis arguments. Although this study uses the conceptual framework from Ji et al (2012), we support each hypothesis using different literatures.

Section 3.2 The Sample of Study o The first sentence of this section mentioned that

“….with help from LISREL software” while other parts of the paper stated that this research used AMOS 22 software. Please be consistent.

We used AMOS and have changed several mistakes.

Section 3.4 o What is the purpose of semi-structured interviews

(see previous comments)

As we mentioned earlier in our response to the first reviewer, this study only used questionnaire to collect the data although we also used interview to validate the result of questionnaires. However, following your suggestions, we deleted “semi-structured interviews were also used to draw the conclusion” from the abstract and also from the paper to reduce the confusion.

Section 3.3 Instruments and Measures o Please make sure which instruments were derived

from Ji et al (2012) and which were developed from Grover and Maholtra (2003)

o Some of instruments used in this study are questionable. The instruments for The level of integration is not convincing, please clarify this by referring to the established instruments for measuring the level of integrations such as:

Flynn, B.B., Huo, B., Zhao, X., 2010. The impact of supply chain integration on performance: a contingency and configuration approach. Journal of Operations Management 28, 58–71.

Narasimhan, R., Kim, S.W., 2002. Effect of supply chain integration on the relationship between diversification and performance: evidence from Japanese and Korean firms. Journal of Operations Management 20, 303–323.

To make it easier to understand which instrument is derived from Ji et al (2012) and which one is derived from Grover and Maholtra (2003), we have added the source of each instrument in Table 2.

Thank you very much for your suggestion. Flynn et al (2010), Narasimhan and Kim (2002) and this paper capture supply chain integration. However this paper is little bit different. For example, the study conducted by Flynn et al focused more on the degree of information sharing between an organization and its partners or suppliers. Furthermore, this study does not focus on information sharing but how far the traders have the relationship with the middlemen by focusing on the level of governance stability and level of the governance intensity.

7

Comment Answer

o Instruments to measure “collaborative advantage” differ with Ji et al’ (2012), and those used by this paper are misleading. Please elaborate this.

Regarding with the measurement items in the

questionnaire, an answer above 3, such as 4 (agree) and 5 (strongly agree), indicates a high collaboration or a high stability/intensity of the governance between traders of broiler chicken and middlemen; whereas, an answer below 3, such as 1 (strongly disagree) and 2 (disagree), indicate a low collaboration or low stability/intensity of the governance. In this case, traders of broiler chicken prefer to use spot market than making long term commitment with the middlemen.

The instrument to measure “collaborative advantage”

is not different from Ji et al (2012). Please refer to a screen shoot bellow. In this case, Collaboration Advantages measure : Logistics Advantages (LGA) Cash Response Advantages (CRA) Information Use and Exchange Advantages

(IEA) Technology Advantages (TEA) Innovation Advantages (INA) Quality Management Advantages (QMA)

Section 4.1 Validity and Reliability: o Please provide strong arguments why Spearmen

correlation was used to measure construct validity. As this research used SEM, why this paper did not use the validity test provided by SEM (please see Anderson & Gerbing, 1982 or Ahire and Devaraj, 2001)

Please refer to section 4.1. “Validity and reliability.”

This research uses validity and reliability tests for several purposes. First, this study uses validity and reliability tests for the initial questionnaire which was distributed to 30 respondents and too small for SEM. The initial construct validity test was used to measure the intended construct. The initial construct validity was associated with convergent validity and was calculated using the Spearman correlation coefficient.

8

Comment Answer After removing all items which were invalid, then we had a new set of questionnaire as the final questionnaire. The final questionnaire was then distributed to 125 traders of boiler chicken and the validity and reliability of the data collected from this questionnaire were tested using SEM technique. For example, the convergent validity was verified using the Confirmatory Factor Analysis (CFA) approach.

Figure 2 does not give any meaning Thank you for your suggestion. We have deleted Figure 2

Figure 3. All R values in this Figure are above 1. Please use standardize value of SEM.

We have changed the R values with standardized values of SEM.

The paragraph after Figure 3 is well too long. Please summarize it.

We have separated this paragraph into two paragraphs.

Please provide Bi-variate relationship amongst variables (both latent and observed variables)

We have added bivariate analysis. Please refer to Table 5.

Section 4.4 Hypotheses Test o The paragraph and bullet points below Table 5 are

useless as they are similar with Table 5. Authors should focus more on discussing what the results mean to the theory as well as to the practice.

o The discussion below the bullet points are also unclear. The unsupported relationship between asset specify and TCE might be caused by the fact that asset specify in the trader-middleman transaction is very low. The SEM used in this study are merely explaining the relationship between latent variables, explaining the cause of unsupported hypothesis using the item level i.e. mean of AS1, AS2 etc. (instead of latent variable level) is not appropriate. Please provide better arguments

We have changed the explanation below Table 5 (now becomes Table 6) and followed your suggestions.

We have added a simple discussion regarding the

unsupported relationship between asset specify and TCE. Please see the text with red color in the discussion section.

9

An Empirical Study Governance Structure Choice in the Supply Chain of Broiler Chickens in Central Java, Indonesia

Abstract. This study aims to clarify the dominant factors (which can be defined as antecedent factors) influencing the supply chain governance structure choice between traders and middlemen of broiler chickens. The investigation will represent several traders and middlemen of broiler chickens in the traditional town market of Semarang district, central Java. This study utilized closed questionnaires with 5-Likert Scale. One hundred and twenty-five copies of the questionnaire were administered to the traders of broiler chickens in North Johar market, Central Johar market, South Johar market, Bulu Market, Karangayu market, Peterongan market, and Jatingaleh market. Additional information was collected through follow-up telephone interviews and archive records. Data acquired from the questionnaire were processed using Structural Equation Modelling (SEM). The findings of this study indicate that the transaction cost of economics and collaborative advantage have a positive significant effect on the level of integration; in this case, the effect of transaction cost economics on the level of integration is stronger than collaboration advantages. The findings of this study also indicate that transaction cost economics significantly depend on uncertain conditions between traders and the middlemen of broiler chickens; whereas, the collaborative advantage significantly depends on uncertain conditions and collaboration capability. Keywords: Transaction cost economics; collaborative advantage; level of integration; broiler chicken supply chain; Semarang

1. Introduction

Nowadays Supply Chain Management (SCM) has become an important concept. There are many definitions of

SCM in the literature. According to the Council of Supply Chain Management Professionals (CSCMP), SCM is

related to the planning and management of all actions involved in sourcing and procurement, conversion, and all

logistics management actions. Notably, it also consists of coordination and collaboration with suppliers,

intermediaries, third-party service providers, and customers. It can be said that SCM incorporates supply and

demand management within and across companies (Naslund and Williamson, 2010). Lambert et al (1998) stated

that SCM can be defined as the integration of the main business processes from end-users through to the original

suppliers of products, services, and information that add value for customers and other stakeholders. According to

Stock and Boyer (2009), SCM can be defined as the management of a network of relationships within a firm and

between interdependent organizations and business units consisting of material suppliers, purchasing, production

facilities, logistics, marketing, and related systems that facilitate the forward and reverse flow of materials,

services, finances and information from the original producer to final customer with the benefits of adding value,

maximizing profitability through efficiencies, and achieving customer satisfaction. For those definitions of SCM,

we can see that the concept of SCM is related to material and information flow from one company to others or the

concept of SCM starts when the integration scope is extended from internal to external coordination.

According to Cooper and Ellram (1993), the scope of integration in SCM (from external to internal coordination)

is related to supply chain governance structure. There are two extreme conditions in the supply chain governance

structure, i.e. spot market and vertical integration. The spot market is at zero level of integration. The spot market

usually has a short-term focus and relations in the spot market are usually based on the mechanism of price. In

the spot market, the composition of the actors involved changes frequently. Different from the spot market, in

terms of vertical integration, there was one actor involved in the supply chain that held different stages of the

10

supply chain (Wever et al, 2010; Williamson, 1991). Thus, between those two extremes (the spot market and

vertical integration), there were different kinds of collaborations, from short-term contracts, long-term contracts,

and joint venture. Particularly, collaboration allows for an intermediate form of hybrid governance (Cao and

Zhang, 2010). According to Nyaga et al (2010), collaboration puts more emphasis on governance through

relational strategies in addition to governance through contract definition. It seems that collaboration emerges as

the alternative to avoid the problems arising from both hierarchies and markets (Koh and Venkatraman, 1991) by

decreasing: a) the costs of opportunism and monitoring related to market transactions through mutual trust; b) and

increasing the partner’s interest in the partnership (Croom, 2001).

Previous studies on supply chain governance have mainly been concerned with establishing the relationship

between Transaction Cost Economics (TCE) theory and choice of supply chain governance structure. The TCE

theory is often linked with the work of Williamson (1975). According to Barringer and Harrison (2000), TCE

provides an important analytical framework explaining the firms’ organization and their relationships along the

supply chains. According to TCE, the decision to use either the spot market or vertical integration depends on the

relative monitoring costs that arise from bounded rationality and uncertainties due to partners’ self-interest and

opportunism (Kaufman et al., 2000). Specifically, within the framework of TCE, the level of vertical integration

is determined by the relative costs of using markers or employing resources within the firm and the supplier-

buyer relationships should structure themselves in such a way to minimize transaction costs (Williamson, 1993).

In other words, TCE assumes that the market will always be the lowest-cost producer of certain goods or services

because of economies of scale and scope. Alternatively, the specific level of integration is preferred when

transaction costs are high because opportunistic behaviors lead to the risk of one-time transactions (Ji et al,

2012).

This research aims to make an empirical model for supply chain governance structure in the broiler chickens

supply chain. The previous studies have been mainly focused on establishing the relationship between TCE and

the choice of supply chain governance structure. This study will expand that relationship by adding one

important factor that should be considered when choosing the supply chain governance structure. We argue that

the choice of supply chain governance structure depends on not only TCE but also on collaborative advantage

between two actors in the supply chain. Moreover, we explore the factors that influence transaction cost and

collaboration advantages. This study uses the conceptual model of supply chain governance structure choice in

the pork supply chain in China which was developed by Ji et al. (2012). The conceptual model is used because

there are some commonalities between the pork supply chain in China and the broiler chicken supply chain in

Indonesia. For example, actors of the broiler chicken supply chain consist of suppliers of raw materials (day old

chicks/DOCs, feeds, medicines and vaccines, as well as livestock equipment), the farmers, the middlemen

(collectors), the processors (slaughterhouses), the retailers and traders in the traditional market (Oktavera and

Andajani, 2013). On the other hand, the pork supply chain in China also consists of breeders, farmers

(producers), slaughterers, processors, middlemen, wet market, and supermarkets or grocery stores (Kinsey, 2002).

Furthermore, the issue addressed by Ji et al (2012) is quite similar to this study, i.e., ensuring the quantity and

quality of pork/broiler chicken through supply chain governance structure.”

11

This study does not encompass the supply chain governance structure choices between all actors in the supply

chain of broiler chicken; this study is limited to the supply chain governance structure choices between two actors

in the broiler chicken supply chain, e.g. the small middlemen (collectors) and the traders of broiler chicken in the

traditional market. In this case, small middlemen act as the collectors of the broiler chicken from the farmers, and

then deliver the broiler chicken to the traders in the traditional market. The middlemen may sell directly to the

traditional market after slaughtering the birds in simple facilities before trucking them to the traditional market.

In Indonesia´s broiler chicken chains, the middlemen and the traders of broiler chicken in traditional market are

two of the important agents of the chain as they drive the chains´ governance structure development through

connecting the farmers to the consumer of broiler chicken in the urban area. The traders rarely make direct

contact with the farmers without the middlemen.

According to the preliminary interviews with 15 traders of broiler chicken in three traditional town markets in the

Semarang district (Damar traditional market, Jatingaleh traditional market, and Johar traditional market),

sometimes the relationship between the traders and middlemen in the traditional market faces a number of

uncertainties. In general, there are three sources of uncertainty in the supply chain of broiler chicken, i.e.

customer demand, a price of broiler chicken, and supply of broiler chicken. The quality of broiler chicken, lead

times, and transportation are several examples of uncertainty that belong to the supply side. The quality of broiler

chickens from the middlemen varies. The middlemen cannot guarantee the same level of quality. All those

uncertainties can affect the performance of the supply chain, both in terms of service levels in the order

fulfillment processes, and cost levels.

High uncertainty levels in demand information have an unfavorable impact on supply chain performance,

resulting in lost sales or obsolete inventories and inefficient utilization of resources. To overcome those

uncertainties, some of the traders must expend extra costs to monitor the performance of their middlemen.

Whenever the cost of monitoring is becoming higher, some traders start to offer the higher level of collaboration

with their middlemen using mechanisms such as long-term contracts. Moreover, some of the traders start to make

vertical integrations when the demand, the price and the external supply of broiler chicken could not be

controlled. Conversely, when the demand, price, and external supply of broiler chicken could be controlled, the

traders preferred to continue transactions with the middlemen in spot market relationships or did not want to offer

a higher level of collaboration.

In fact, the decision to carry out higher levels of collaboration does not only depend on the uncontrolled

conditions described above but also depends on the ability and the willingness of the middlemen to collaborate.

So, based on the condition encountered by middlemen and the traders of broiler chicken in the traditional market,

the empirical model resulted from this research can be used by the traders to choose the supplier strategy, create

supplier portfolio, and supplier negotiation and contract to award. In this case, all of that choice will depend on

the on the asset used in transaction, level of certainty of the environment faced by the traders, and the willingness

and capability to collaborate.

12

Regarding with the ASEAN Economic Community (AEC), the choice of supply chain governance structure

between traders and middlemen of broiler chicken might be different before and after the AEC implementation.

Because AEC will raise the trade and economic development among AEC countries, the traders of broiler chicken

may prefer to choose transactions with the middlemen in spot market because AEC will enable easier movement

of goods, services, investment, capital, and people including the increasing number of middlemen. Ultimately,

AEC will offer new ways of coordinating supply chains, or access to new markets for established products. AEC

will improve the scale efficiencies, dynamism, and competitiveness of ASEAN members (Sujatanond, et al

2013). In this case, “a single market and production base” by 2015, which means removing trade barriers and

impediments, would make the costs of internal coordination (such as the costs of employees and managers) could

be higher than the costs of using independent market such as external providers (Duval and Feyler, 2016). There

will be the free flow of goods, services, investment capital and skilled labor following the liberalization. These

will include tariff reductions and streamlining of certain administrative procedures (Sujatanond, et al 2013).

However, their propositions must be proven by further research.

In this research, the choice of supply chain governance structure between traders and middlemen is represented

by the relationship between traders and middlemen in several traditional markets in Semarang City, Central Java

Province. Chicken business activities are dominant on Java Island especially in Central Java Province (Muladno,

2008). Furthermore, the development of the chicken business follows the development of the wet markets around

the large populations of West, East, and Central Java. This has been supported by the development of feed

factories close to the ports of major population centers such as Jakarta and Surabaya. Furthermore, the broiler

chicken production in Central Java Province in 2011 was 105.839 metric tons, which was a huge number

compared with that of in other Indonesian provinces (United States Agency for International Development,

2013). Furthermore, Semarang was chosen as a specific location for this study since most broiler meats are

consumed by people living in the big cities (Soedjana, 1999), such as Semarang.

So, in order to clarify the dominant factors (which can be defined as antecedent factors) influencing the supply

chain governance structure choice between traders and middlemen, the paper is organized as follows. Section 2

will present the main findings from the review of the previous work on antecedent factors influencing supply

chain governance structure choice and then develop the main hypothesis and conceptual model for testing.

Section 3 will explain the methodological approach and the development of the questionnaire. Section 4 will

present the findings and discuss these findings relating them to the theoretical background. The last section will

present the main conclusions along with suggestions for further research.

2. Literature Review

The literature review will consist of previous work on antecedent factors influencing supply chain governance,

and then develop the main hypothesis and conceptual model for testing.

2.1. Transaction cost economics and the choice of supply chain governance structure

Governance become a new subject in scientific area for the last period. It was dominated by corporate governance

concept. The corporate governance concept refers to the organizations as single entities and in the beginning, the

13

corporate governance concept talk about the relationship between shareholders and managers which is called the

shareholder’s perspective (Thomson and Jain, 2006). The problem arising between shareholders and manager is

called the principal–agent problem (Ruuska, et al, 2010). A more advanced view of corporate governance refers

to the relation between organizations and stakeholders, called the stakeholder perspective (Ruuska, et al, 2010).

In detail, Ruuska et al. define governance as the mechanisms or processes that affect how either a single

transaction or recurrent transactions are organized ex-ante and carried out ex-post between two or more actors,

either within the boundaries of a single organization or between two or more organizations. Specifically, the

governance involving two or more organizations is known as supply chain governance (Crisan et al., 2011).

It is essential to differentiate supply chain management and supply chain governance. Supply chain management

denotes the integration of all activities associated with the control, planning, processing and flow of goods and

services from companies that supply raw material to the end user, including the flow of information internally

and externally (Chen and Paulraj, 2004). Besides the focus on integration and flow between the companies and

the end customers, supply chain management focuses on operations and on efficiency related to the final

customer (Ketchen and Hult 2007). Supply chain governance, on the other hand, focuses on understanding

different aspects of supply chain engagement while giving less importance to the end customers and the material

flow itself (Dolci et al, 2013). The main question in governance is whether the coordinator or the coordinators of

the chain have the possibility to influence partners’ actions and how this influence happens (Crisan et al., 2011).

According to literature, there were six governance structure type in the agribusiness contexts, i.e. spot markets,

long-term relationships, marketing contracts, production contracts, contract farming, and vertical integration (e.g.

Ferguson, 2004; Kim, 1998; Mighell and Jones, 1963; Barkema and Drabenstott, 1995; Hobbs, 1996; Peterson

and Wysocki, 1997). In the sport market (SM), price is the main factor for closing the transaction and goods are

traded between numerous seller and buyer in the current time (Hobbs, 1996). In the long-term relationships (L-

TR), there were long-term non-contractual relationship that bounded two parties (buyer and seller) which are

independent each other. Thus, in the marketing contract (MC), there were agreement from the buyer to the seller

to provide a market for their output. In production contracts (PC), buyer was the party that supply and manages

the farm, whereas the famers was the party that provide their land and labor. In the contract farming (CF),

farmers conduct a production system and supply the product to the buyer under forward contract. The last, in the

vertical integration (VI), products passage between numerous stages of production, processing and distribution as

a result of within-the-firm managerial orders rather than due to the direction of prices

As we mentioned in the previous explanation, the decision about supply chain governance structure type is

mainly determined by the Transaction Cost of Economics (TCE). Several results of studies concerned with the

relationship between choice of the supply chain structure and TCE theory can be explained as follows. According

to a study conducted by Frank and Henderson (1992), TCE are a primary motivation to vertically coordinate.

Weleschuk and Kerr (1995) said that the TCE approach can be used by sellers to make a choice between signing

production contracts with buyers or selling their product on the spot market. Mudambi and Mudambi (1995)

introduced a model of the buyer's switching decision that integrates the tenets of both TCE and relationship

marketing. The model analyzes how the switching decision is affected by parameters such as: transaction-specific

14

assets, information quality and time. Hobbs and Young (2000) presents a framework which links the product

characteristics with transaction characteristics and transaction costs and changes in vertical coordination. More

recently, a study conducted by Ji et al (2012) proves the positive relationship between TCE and the level of

integration; a higher transaction cost will encourage the chain actors to increase the level of integration.

Therefore, based on the relationship between the choice of supply chain governance structure and TCE from the

previous literature (Frank and Henderson, 1992; Weleschuk and Kerr, 1995; Mudambi and Mudambi. 1995;

Hobbs and Young 2000;, and Ji et al., 2012), this study proposes that:

H1: The transaction cost economics between the traders and middlemen of broiler chicken have a significant

positive effect on the choice of supply chain governance structure which is represented by the level of integration

between them.

2.2. Asset specificity, uncertainty and transaction cost economies

According, to Williamson (1979, 1981, and 1985), there were three antecedent factors of TCE, i.e. asset

specificity, uncertainty, and transaction frequency. In line with the study conducted by Ji et al (2012), this

research only uses two instead of three factors as antecedent factors that influence the transaction cost economics

between traders and middlemen of broiler chicken. Those two factors were asset specification and uncertainty.

According to Williamson (1985), asset specificity can be defined as long-lasting investments that needed to

support the particular transactions. Asset specificity can also define as an investment in physic or human that are

committed to a particular partner in the business and the redeployment of this asset needs to consider the

switching cost (Erramilli and Rao, 1993; Heide, 1994). From another approach, according to Klein (2007), asset

specificity is an asset that has a significantly higher value within a particular transacting relationship than outside

the relationship. Usually, when the asset specificity is high, the firm favor in-house production than making the

relationship with another because the high asset specificity will make the costs of the transaction increasing. In

this case, the positive relationship between asset specificity and transaction cost economics have been proven by

Ji et al (2012). This positive relationship can be explained by two reasons. The first reason, usually, the risk of

opportunism is significant in the transactions that need highly particular asset investment (Rindfleisch and Heide,

1997). High specificity will create sunk cost and the party who undertakes an asset is vulnerable to the risks of

the opportunism of the trading partner who may intimidate to finish the project too early and cause the investor to

lose the assets (Vining and Globerman, 1999). Based on this condition, to protect the investor, the transactions

with significant particular investments will request a contract or mechanism. In order to avoid being placed in an

unfavorable condition, the investor will request for a longer period of the contract or the investor will build

bilateral adjustment mechanisms into the contract (Aubert, et al. 1996). This contract and bilateral adjustment

mechanisms will make the costs of the transaction increasing. The second reason, high asset specificity leads to a

decrease in market production cost advantage (Williamson, 1981), and thus, the relative governance costs of

markets will increase as the assets needed for the transaction become more specific progressively. The highly

specific asset is categorized as totally specified to a particular use or user only. This asset will have a low

15

transferability to another user. So, based on the relationship between asset specificity and transaction cost

economics from the previous literature this study proposes that:

H2: The asset specificity between the traders and middlemen of broiler chicken has a significant positive

effect on the transaction cost economics, which in turn will affect the choice of supply chain governance structure

between them.

Uncertainty can be defined as the cost related with the unpredicted outcome and asymmetry of information

(Williamson, 1985). Uncertainty can also be viewed as a level of unpredicted changes in the circumstances

surrounding the transaction (Grover and Malhotra, 2003) and thus indicates a shortage of information (Aubert et

al., 1996). According to Williamson (1979), there were two categories of uncertainty, i.e. behavioral uncertainty

and environmental. Behavioral uncertainty is talking about the problems in performance assessment or in

checking whether both of the parties have been compliance with established contracts has been prepared. Indeed,

it is usually challenging and costly to assess the real performance of the suppliers, especially in the case of

services. Behavioral uncertainty is determined by the degree of intangibility, customization and professionalism

of the service tasks. Service transactions that possess a high degree of intangibility and little tangible components

imply that they are dominated by performance and procedures. As intangibility increases, transaction complexity

rises, and then, the companies have less evidence available to assess the supplier's performance both before and

during the contract (Promsivapallop, 2009). Different with behavioral uncertainty, environmental uncertainty is

talking about the unpredictability of the environment and the volume of products or services. Environmental

uncertainty can also be seen as the changes of the external environment which are unaffected by the actions of

economic. Environmental uncertainty surrounding the basic transaction that arises from altering conditions in

random acts of nature and/or the economic environment in competition, technology, and regulations.

Since long time ago, uncertainty has been viewed as dominant contingency and uncertainty is one of the

underlying determinants of high transaction costs (Williamson, 1975). More explicitly, the relationship between

uncertainty and transaction cost can be explained as below. According to Williamson (1979), transaction costs

will increase as the environment in which an exchange takes place more unpredictable. In this case, transaction

cost which an exchange takes place are the impact of the complexity and the uncertainty of the system of

economic system related to the nature of human beings and differences in the character of the exchange level.

The higher level of uncertainty usually implies a higher transaction cost because each of the parties in the

transaction will expend extra time and effort in watching the process of transaction. Opportunistic behavior is

likely and difficult to avoid when several aspects of the transaction are highly uncertain and a market transaction

is unlikely to offer sufficient control mechanisms to manage this transaction. (Lietke and Boslau, 2007).

Sometimes, contracts can be used to resolve the uncertainty to some degree, but they are however costly and

incomplete. There is no clear consensus in the literature whether a market or hierarchy is the best response to

environmental uncertainty. Thus, the positive relationship between the level of uncertainty and transaction cost

economics can be seen in Noordewier et al.(1990), Teo et al (2004), Geyskens et al (2006), Lietke and Boslau

(2007), Promsivapallop (2009), Ji et al. (2012) and Chen et al. (2013).

16

So based on the theoretical background discussed above (e.g., Williamson, 1979; Williamson, 1985) and the

result of previous research (including research conducted by Ji et al, 2012), the current study proposes that:

H3: The uncertain conditions between the traders and middlemen of broiler chicken has a significant positive

effect on the transaction cost economics, which in turn will affect the choice of supply chain governance structure

between them.

2.3. Collaborative advantage and the choice of supply chain governance structure

Collaboration is an important part of every operating market economy, and businesses tend to look for

collaboration because it can provide the relative advantage to the firms rather than not collaborating. According

to Jap (1999), there were some advantages of collaboration. Collaboration can broaden the size of the joint

benefits and collaboration can give each participant a share of a greater gain that could not be created by each

participant by its own. Collaboration can make several supply chain partners work together as if they were a

portion of a single enterprise (Lambert et al., 2004). Collaboration can also increase the joint competitive

advantage (Jap, 2001). Thus, to capture all of the rewards from collaboration, some researchers have proffered

the notion of collaborative advantage (Dyer, 2000; Huxham and Vangen, 2005; Lank, 2005). Specifically,

according to Kanter (1994) (as cited in Foss and Nielsen, 2012), collaborative advantage can be defined as the

particular advantages that may accumulate in firms that built a strategic partnership with other firms (e.g. joint

ventures) by virtue of such cooperation. According to Ferratt et al. (1996) (as cited in Cao and Zhang, 2010)

collaborative advantage can be seen as the benefit gained by a group of firms as the result of their cooperation

rather than their competition. Collaborative advantage relates to the desired synergistic outcome of the

collaborative activity that could not have been achieved by any firm acting individually (Vangen and Huxham,

2003). The collaborative advantage permits partners to appreciate the opportunities afforded by working together

as an alternative to the destructive forces of working individually against the purpose of the collaboration (Cao

and Zhang, 2011). Thus, supply chain collaborative advantage can also be seen as synergistic benefits gained by

the firms more than their competitor in a marketplace because those firms make partnership in supply chain and

partner-enabled knowledge creation, and such synergistic benefits could not be achieved by acting individually

(Jap, 2001; Vangen and Huxham, 2003; Malhotra et al.. 2005). In this case, partnership in supply chain involves

several of collaborative activities such as synchronizing decisions, sharing information and complementary

resources, and aligning incentives with partner’s risks and costs. The collaborative advantage resides not within

the single firm but across the boundaries of a firm through its relationship with their partners in the supply chain

(Dyer, 1996; Dyer and Singh, 1998; Jap, 2001). In the research conducted by Ji, et al. (2012), collaborative

advantages have a positive impact on choice of supply chain governance structure; in this case, to maintain or to

increase the collaborative advantage, exchanging partners in supply chain be likely to apply more intensity in the

level of integration and built a stable governance structure.

Based on the theoretical background discussed above and the results of previous research, this study proposes

that:

17

H4: The collaborative advantage between traders and middlemen of broiler chickens have a significant

positive effect on the choice of supply chain governance structure which is represented by the level of integration

between them.

2.4. Uncertainty, capability to collaborate, willingness to collaborate and collaborative

advantage

Uncertainty was seen as a primary driver of collaboration. In this case, uncertainty can have a negative effect on

the relationship quality (Kumar et al, 1995). Under conditions of uncertainty, the partner may not be sure that the

counterpart seeks the interests of the collaboration (Caglio and Ditillo, 2008). In their research, Ji et al. (2012)

proved the negative effect of uncertainty on the collaborative advantage. So based on the theoretical background

discussed above (e.g., Kumar et al., 1995; Caglio and Ditillo, 2008) and the result of previous research conducted

by Ji et al. (2012), the current study proposes that:

H5: The uncertainty between traders and middlemen of broiler chickens has a significant negative effect on

the collaborative advantage between them.

Collaboration capability is one of the important factors for managing collaboration between firms. Collaboration

capability has been defined as the firm’s ability to build and manage relationships based on mutual trust,

communication, and commitment (Blomqvist and Levy 2006). In this case, the trust will increase network

members’ commitment and make the cooperation more straightforward and efficient (Dhanaraj and Parkhe,

2006). Collaboration capability also can improve group working and knowledge sharing. Keen (1991) explained

this concept as linking people and allowing collaboration beyond spatial barriers. Based on the previous

theoretical background about collaborative advantage (i.e. Vangen and Huxham, 2003; Cao and Zhang, 2011) and

collaboration capability (i.e. Keen, 1991; Blomqvist and Levy, 2006) and the result of the research conducted by

Ji et al (2012) which can prove a positive effect of collaboration capability to collaborative advantage, this study

proposes that:

H6: The collaboration capability of traders and middlemen of broiler chicken has a significant positive effect

on the collaborative advantage between them.

The willingness to collaborate is conceived as active communication, involvement with others during the process

of decision-making. Conceptually, this means a willingness to participate in decision-making but also includes a

willingness to negotiate and be assertive (Anderson, 1993). Willingness to collaborate shows the commitment

from supplier to sustain the relationship (Zineldin, 1998). Willingness to collaborate in a networked organization

is associated with the attitude and intentions of the partners towards real collaboration circumstances

(Camarinha-Maltos and Rosas, 2010). In the context of relationship and inter-organizational collaboration

success, willingness to collaborate is one of the factors that have the significant contribution (Raišienė, 2011).

Related to those contributions, Ji et al (2012) are one of the researchers that can prove a positive relationship

between willingness to collaborate with collaboration advantage. In this case, willingness to collaborate can

improve the coordination of policies and related activities (Bramwell and Sharman, 1999). On the other side,

18

there were some aspects which account for willingness to collaborate, among others the external incentives, the

perceived risks, or the existence of a fierce competition (Camarinha-Maltos and Rosas, 2010).

Based on the previous theoretical background about willingness to collaborate (i.e. Anderson, 1993; Zineldin,

1998; Camarinha-Maltos and Rosas, 2010; Raišienė, 2011; Bramwell and Sharman, 1999), this study proposes

that:

H7: The willingness to collaborate between traders and middlemen of broiler chickens has a significant positive

effect on their collaborative advantage.

Based on these hypotheses, the conceptual model of this study can be seen in Figure 1.

Fig. 1. The conceptual model of antecedent factors influencing supply chain governance structure choice between traders and middlemen of broiler chickens

3. Method of Research

The method of research consists of an explanation about the population and sample of the study, instrument and

measures, and data analysis tools.

3.1. The Population of Study

This study was conducted in Semarang, Central Java. This study chose the traders of broiler chicken in traditional

markets as a target population. The reason for this choice can be seen in the following explanation. There was

some characteristic of modern markets. First, the modern market (e.g. supermarket) have the buying power that

permits them to control their suppliers to an extent which would not be possible if there were the equitable

balance of bargaining power between them (Nicholson and Young, 2012). Second, modern market has a tendency

to supply their commodity from larger and more established suppliers (Reardon, et al 2007; Natawidjaja et al.,

2007; Reardon and Berdegué, 2002). Third, in the procurement system, the modern market implements private

standards results that scan the high-quality products from traditional wholesale value chains (Chang, et al, 2015).

Compared with the modern market, a trader of broiler chicken usually has poor bargaining power with their

supplier and they tend to source from small and non-established suppliers. It is not always easy for them to

The uncertainty condition between the trader and middleman of broiler

chicken

The asset specificity between the trader and middleman of broiler

chicken

The collaboration capability of the trader and middleman of broiler

chicken

The transaction cost economics between the trader and middleman of

broiler chicken

The collaborative advantage between the trader and middleman of broiler

chicken

The level of integration between the trader and middleman of broiler

chicken

H1+

H2 +H3 +

H4 +H5

-

The willingness to collaborate from the trader and middleman of broiler

chicken

H6

H7

+

+

19

determine the price or specify the quality of their supplier. This condition makes some traders in the traditional

market face problems, such as sudden cancellation of sourcing from suppliers, or the uncertainty of the

advantages of collaboration due to the prices offered by suppliers.

Traditional markets are places that offer numerous commodities for daily needs, including live birds. In the

traditional markets, the poultry section usually consists of live bird selling, slaughtering, and carcass selling

activities with insufficient hygienic and sanitary situations. Often small slaughter places are found in these

markets. The traditional market operates every day. Then, a traditional market can be categorized as modern

based on the condition of the physical aspects of the building, the human resources, and the trading system

(Sumiarto and Arifin, 2008). There are 51 traditional markets in Semarang which can be grouped into two

categories according to their size, i.e. traditional town market and traditional district market. The traditional town

market was bigger than the traditional market. There were 7 traditional town markets (such as North Johar

market, Central Johar market, South Johar market, Bulu market, Karangayu market, Peterongan market, and

Jatingaleh market) and 44 traditional district markets (such as Dargo market, Tanah Mas market, Damar market,

Jangli market, and so on). In comparison to the traditional town market and traditional district market, more

specifically, this study chooses the traders of broiler chicken in the traditional town market as the target

population. This is because the traditional town market was larger than the traditional district market and there

were more traders of broiler chicken in the traditional town market than in the traditional district market. In total,

there were 555 traders of broiler chicken in the traditional town market.

3.2. The Sample of Study

In this study, the sample is taken from chicken traders only while other supply chain players are not involved. In

addition, the relationships addressed is only between chicken traders and the middlemen. Then, in order to meet

the prerequisites of variance-based Structural Equation Modeling (SEM), as much as one hundred and twenty-

five broiler chicken traders were chosen as the sample of this study. The samples with SEM using the Maximum

Likelihood method require a minimum sample size as much as 5 times the items in the questionnaire and the

recommended sample size range is 100 to 200 (Ghozali, 2011; Hair et al.. 2006). The sampling technique used in

this study was a proportional stratified random sampling. Stratification is a means of sample design by which the

population of interest is divided into groups, called strata, according to the known characteristic(s) (Khan and

Khalid, 2013). The population of interest was divided proportionally into 7 groups, according to the traditional

town market the traders came from. This study used stratified random sampling because the population frame

could be properly defined in each traditional town market during the period of collection of data with regard to

the actual number of traders of broiler chicken in each traditional town market. Besides that, stratified sampling

was performed in this study to ensure that all the important views from traders are represented in the samples.

The traders of broiler chicken as the sample of this study as can be seen in Table 1.

Table 1. Sample of study from each traditional town market. No. Name of market Number of traders of

broiler chicken Number of

samples 1 North Johar 3 2 2 Central Johar 80 15 3 South Johar 1 3 4 Bulu 119 34 5 Karangayu 217 43

20

6 Peterongan 106 21 7 Jatingaleh 29 7

Total 555 125

3.4. Data Collection Procedure

This study utilized closed questionnaires for data collection. The 125 questionnaires were administered to traders

of broiler chicken in North Johar market, Central Johar market, South Johar market, Bulu market, Karangayu

market, Peterongan market, and Jatingaleh market. Additional information needed for this study was collected

through follow-up telephone interviews and archival records. Because the respondents are mostly the owners of

very small enterprises, we accompanied the respondents when they filled the questionnaire to make sure that they

understood the questions. We also gave the respondents some real-world examples when they could not

understand the meaning of questions. Sometimes, we help the respondents by translating the questionnaire into

local Javanese language.

3.3. Instrument and Measures

In the beginning of the research, thirty-one items were selected to test the relationship between asset specificity,

uncertainty condition, collaboration capability, willingness to collaborate, transaction cost economics,

collaborative advantage, and level of integration between the traders and middlemen of broiler chicken in the

traditional town markets. After considering the result of the validity and reliability test from the initial and final

questionnaire, twenty-three items passed the test and could be used to test the relationship between asset

specificity, uncertainty condition, collaboration capability, willingness to collaborate, transaction cost economics,

collaborative advantage and level of integration. In this case, twenty-five items passed the validity and reliability

test for initial questionnaire and then, twenty-three items passed the validity and reliability test for final

questionnaire. Out of these thirty-one items, four items were used to measure asset specificity, four items were

used to measure uncertainty condition, five items were used to measure collaborative capability, two items were

used to measure willingness to collaborate, seven items were used to measure transaction cost economics, five

items were used to measure collaborative advantage, and four items were used to measure the level of integration.

Most of those items were developed from Ji et al. (2012) and only items used to measure transaction cost

economics were developed from Grover and Malhotra (2003). In detail, all of the items used to measure asset

specificity, uncertainty condition, collaboration capability, and willingness to collaborate, transaction cost

economics, collaborative advantage and level of integration and the source of each item are described in Table 2.

This study used a 5-point Likert scale (1= strongly disagree, 2=disagree, 3=neither agree nor disagree, 4=agree,

and 5= strongly agree) to measure the condition of all of the items.

3.5. Data Analysis Tools

The data was analyzed through SEM which was run through an Analysis of Moment Structure (AMOS) 22

program. The SEM is a second generation data analysis technique for estimating complex relationships among

multiple constructs (Byrne, 2013). There are significant differences between SEM and traditional statistic

methods such as regression, regression, analysis of variance, and logit. SEM have advantages compared to

21

traditional statistic methods. SEM can construct latent variable and then, measure a complex causal path (e.g.,

recursive, hierarchical) among latent variables, whereas, traditional statistic methods can only check pairwise

relationships between observed variables. A latent variable is abstract concepts that cannot be measured directly.

Therefore, the SEM technique is becoming more widely used in social work research, behavioral science, and

management science, for modeling complex and multivariate relationships. With the availability of user-friendly

statistical software, such as LISREL, AMOS and EQS, SEM has become more widely used and reported in social

work journals (Guo et al., 2009)

4. Result

This section consists of the explanation about the result of the validity and reliability tests, the characteristics of

the respondents, the results of the model of fitness test, and the results of the hypothesis testing.

4.1. Validity and Reliability

Validity and Reliability for Initial Questionnaire

Validity is concerned with the significance of research instrument. Validity test is intended to ensure that the

researcher is measuring what they proposed to measure, especially when they are measuring behaviors. There

were four types of validity test, i.e. statistical conclusion validity, internal validity, construct validity, and

external validity (Drost, 2011). This study uses construct validity to measure how well the authors converted or

transformed a construct (concept, idea, or behavior) into a functioning and operating reality, the

operationalization (Trochim, 2006).

The initial construct validity test was conducted before the final questionnaire distributed to the 125 traders of

broiler chicken. The initial construct validity was used to anticipate the differences between the issue and sector

addressed by the original questionnaires with the current condition of broiler chicken supply chain in Indonesia

It was no simple metric can be used to quantify the extent to which a measure can be described as construct valid.

Researchers typically establish construct validity by presenting correlations between a measure of a construct and

a number of other measures that should, theoretically, be associated with it (convergent validity) or vary

independently of it (discriminant validity) (Westen and Rosenthal, 2003). For initial questionnaire which was

tested on 30 traders as respondents, the initial construct validity was associated with convergent validity and was

quantified by using the Spearman correlation coefficient. The items of the questionnaire were deemed invalid if

that item has a Spearman correlation coefficient of less than 0.361 (1-tailed test; α=0.05; n=30, respondent for the

preliminary survey). Otherwise, the items of the questionnaire are said to be valid. The results of the validity test

indicated that six items have a value of the Spearman correlation coefficient less than 0.361, i.e. one item in asset

specificity, one item in uncertainty condition, one item in collaboration capability, one item in transaction cost of

economics, one item in collaborative advantage, and one item in level of integration.

After removing all of the items which have a value of the Spearman correlation coefficient less than 0.361, the

internal reliability was verified by computing the Cronbach’s alpha. Internal reliability is intended to measure the

internal consistency of the individual indicators that belong to one construct. A higher value of internal reliability

22

provides greater confidence to the researcher that individual indicators of one construct can use to measure a

particular situation consistently. Nunnally (1978) suggested that a minimum Cronbach’s alpha of 0.6 sufficed for

the early stages of research. After removing all the items which are invalid, the asset specificity, uncertainty

condition, collaboration capability, willingness to collaborate, transaction cost economics, collaborative

advantage and level of integration have a Cronbach’s alpha above 0.60, ranging from 0.618 to 0.832. This

condition demonstrates an acceptable level of internal consistency of each of the construct indicators. The final

items used for the questionnaire for this study (after removing the items which have a value less than 0.361) and

the results of the validity and reliability test for initial questionnaire can be seen in Table 2.

Validity and Reliability for Final Questionnaire

After removing all the items which are invalid, this study have a new questionnaire which called final

questionnaire. The final questionnaire is distributed to 125 traders of boiler chicken and the validity and

reliability of the data collected from this questionnaire is tested using SEM technique. Under this technique, the

convergent validity is verified using the Confirmatory Factor Analysis (CFA) approach. The CFA analysis

provides standardized loading factor of each indicator where the research variable is quantified from a series of

statement known as manifest variable. The convergent validity was assessed by means of factor loadings (given

as Regression Weights in the AMOS), Average Variance Extracted (AVE), and Composite Reliability (CR). With

regard to Factor Loadings, Hair et al. (2006) recommend that Standardized Regression Weights obtained through

the AMOS should be 0.5 or higher, ideally 0.7 or higher and at a minimum statistically significant. As noted by

Hair et al. (2006), AVE value should be above 0.5; whereas, CR values should be greater than 0.6. The value of

VE that is smaller than 0.5 indicates that more error remains in the items than variance explained by the latent

factor structure imposed on the measure and the CR value lower than 0.6 indicates that the items do not

consistently measure the hypothesized latent construct and (Hair et al., 2006). The result of convergent validity

and discriminant validity from final questionnaire which was distributed to 125 traders of broiler chicken can also

be seen in Table 2.

Table 2. Results of convergent and reliability test for initial and final questionnaire

Construct Items

Initial questionnaire Final questionnaire Spearman correlation coefficient

Cronbach’s Alpha

Standardized Regression

Weights

AVE CR

Asset specificity (AS)

The traders of broiler chicken will lose all physical asset (facilities and tools) have been invested, if they switch to the others product (AS1)*

0.399 0.618

dropped 0.635

0.670

The traders of broiler chicken will lose the time have been invested in building the good collaboration with former middlemen, if they switch to the new middlemen (AS2)*

0.452 1.023

The traders of broiler chicken will lose the effort have been invested in building the good collaboration with former middlemen, if they switch to the new middlemen (AS3)*

0.579 0.543

The traders of broiler chicken will lose a lot of investment If they switch to other products (AS4)*

dropped

Uncertainty condition (UN)

Demand for broiler chicken is uncertain (UN1)* 0.482 0.775

0.787 0.620

0.676 I and my middlemen cannot exchange business information well (UN2)*

0.536 0.766

My middlemen is not reliable for anything that has 0.379 0.793

23

Construct Items

Initial questionnaire Final questionnaire Spearman correlation coefficient

Cronbach’s Alpha

Standardized Regression

Weights

AVE CR

relationship with partnership (UN3)* Regulations of the market of broiler chicken change frequently (UN4)*

dropped

Collaboration capability (CC)

Between me and my middlemen, at least one has capital to enhance your collaboration (CC1*

0.657 0.800

0.799 0.661

0.733

Between me and my middlemen, at least one has strategic logistics systems to support the supply of broiler chicken (CC2)*

0.647 0.658

Between me and my middlemen, at least one has good business reputation in the supply chain of broiler chicken (CC3)*

0.726 0.719

Between me and my middlemen, at least one has good managerial skills to manage the relationship (CC4)*

0.824 0.677

Between me and my middlemen, at least one holds key technology to support the logistic activity of broiler chicken (CC5)*

dropped

Willingness to collaborate (WC)

As a trader of broiler chicken, I have great willingness to know my middlemen' s preference (WC1)*

0.574 0.727 0.680 0.619 0.678

I have great willingness to make a great effort to maximize the joint value between me and my middlemen (WC2)

0.574 0.845

Transaction cost economics (TC)

It is very difficult to get the information about the condition of my middlemen when I try to make collaboration with my middlemen (TC1)**

0.603 0.821

0.744 0.629

0.688

It is very difficult to exchange information with my middlemen about the performance of this collaboration (TC2)**

0.369 dropped

It is very difficult to identify root causes of each problem between me and my middlemen (TC3)**

0.386 0.784

It is very difficult to solve each problem between me and my middlemen (TC4)**

0.395 0.782

It is very difficult for my middlemen to give me the correct information about the quality of broiler chicken (TC5)**

0.483 0.758

In my opinion, there is a great tendency for my middlemen to get benefit for themselves (TC6)**

0.384 0.739

I need significantly effort to explain the role of each individual to support this collaboration (TC7)**

dropped

Collaborative advantage (CA)

Logistics system that exists between me and my middlemen can ensure the availability of broiler chicken (CA1)*

0.563 0.832

0.782 0.616

0.670

Payment between me and my middlemen could be realized quickly (CA2)*

0.591 0.800

Cost between me and my middlemen is lower than that of between me and another processor (CA3)*

0.75 0.764

Communication system between me and my middlemen can facilitate us to share all information that important for the successful of the broiler chicken supply (e.g. quality, price) (CA4)*

0.77 0.808

I and my middlemen can share information about cost, price, product safety, quality, and quantity etc. (CA5)*

dropped

Level of Integration (LI)

Frequency of transactions between me and my middlemen is higher than that between me and a common upstream chain agent (LI1)*

0.66 0.749

0.758 0.647

0.713

I and my middlemen have a long time of cooperation, at least more than 6 months (LI3)*

0.674 0.731

Either me and my middlemen gives up to the cooperative relationship easily (LI3)*

0.363 0.726

Both I and middlemen rarely betray the contract dropped

24

Construct Items

Initial questionnaire Final questionnaire Spearman correlation coefficient

Cronbach’s Alpha

Standardized Regression

Weights

AVE CR

(LI4)*

* Ji et al. (2012); ** Grover and Malhotra (2003).

The result of convergent validity test for final questionnaire indicated that there were two items must be removed

from final questionnaire because those items have Standardized Regression Weights less than minimum or less

than 0.5. The first item, the traders of broiler chicken will lose all physical asset (facilities and tools) have been

invested, if they switch to the others product (AS1) and the second item was, it is very difficult to exchange

information with my partner about the performance of this collaboration(TC2). Among valid items, there was 1

items have Standardized Regression Weights above 1. However, according to Jöreskog (1999), the standardized

coefficient of 1.04, 1.40 or even 2.80 does not necessary imply that something is wrong, although, it might

suggest that there is a high degree of multicollinearity in a data. The multicollinearity is a phenomenon in which

two or more predictor variables in multiple regression models are highly correlated, meaning that one can be

linearly predicted from the others with a substantial degree of accuracy. That is, a model with correlated

predictors can indicate how well the entire bundle of predictors predicts the outcome variable, but it may not give

valid results about any individual predictor, or about which predictors are redundant with respect to others. Then,

after removing two non-valid items, the AVE value in the range of 0.619 and 0.661 and the CR value in the range

0.676 and 0.733, indicated the satisfactory convergent validity of each construct.

4.2. Profile of Respondents

The characteristics of the 125 respondents who completed a questionnaire in this study (not including the 30

preliminary respondents) can be seen in Table 3. Most of the respondents are female with less than 2 employees.

Only thirty percent of the respondents have five or more employees. In terms of duration of working as traders of

broiler chickens, most of the respondents have become a traders broiler chickens for 15 years or more, followed

by 5 years to less than 10 years, 10 years to less than 15 years, and less than 5 years. Then, in terms of average of

broiler chicken that can be sold, most respondent can sell an average of 100 to 300 kilograms of broiler chicken

in one day, followed by less than 100 kilograms, 300 kilograms to less than 500 kilograms, and 500 kilograms

and more.

Table 3. Characteristics of respondents Characteristics Category Percentages

Gender Male 46%

Female 54%

The number of employees

0 – 2 employees 85%

3 – 5 employees 12%

5 or more employees 3%

Duration of working as a trader of broiler chickens

Less than 5 years 6%

5 - 10 years 26%

10 – 15 years 17%

15 or more years 52%

Average number of broiler chickens that can be sold in one day

0 – 100 kg 22% 100 – 300 kg 50% 300 – 500 kg 22%

25

Characteristics Category Percentages

500 or more kg 6%

4.3. Model Fitness Test

The hypothesized model of the antecedent factor affecting governance structure choices in the supply chain of a

broiler chicken is presented in Figure 2 with seven latent constructs. Figure 2 shows the finalized model of the

antecedent factor affecting governance structure choices in the supply chain of broiler chicken after considering

all statistical fit index tests and modification index.

Fig 2. The finalized model of the antecedent factor affecting governance structure choices in the supply chain of

broiler chicken

This study did not use the value of chi-square (χ2) as statistical fit indices to assess the fitness of the model. The

Chi-Square value is the traditional measure for assessing the overall model fit and assessing the magnitude of the

discrepancy between the sample and fitted covariance matrices (Hu and Bentler, 1999). A good model fit would

provide an insignificant result at a 0.05 threshold (Barrett, 2007), thus the Chi-Square statistic is often referred to

as either a ‘badness of fit’ (Kline, 2005) or a ‘lack of fit’ (Mulaik et al., 1989) measure. Although the Chi-

Squared test is one of the popular statistical fit indices, there were a number of limitations when researchers using

chi-square test. Firstly, the chi-Square test assumes severe deviations from normality and multivariate normality

can result in model rejections even when the model is appropriately specified (McIntosh, 2007). Secondly, the

Chi-Square test is sensitive to sample size, which means that the Chi-Square statistic nearly always rejects the

model when the researcher using large samples (Bentler and Bonett, 1980; Jöreskog and Sörbom, 1993). On the

other hand, when a researcher using a small sample, the Chi-Square statistic lacks power and because of this

condition, the chi-square may not be able to discriminate between good and poor fitting models (Kenny and

McCoach, 2003). Due to the restrictiveness of the Model Chi-Square, researchers (including this study) have

sought alternative indices to assess model fit. One example of a statistic that minimizes the impact of sample size

on the Model Chi-Square is Wheaton et al. (1977) relative/normed chi-square (Relative Chi-square (CMIN/DF:

the chi-square/degree of freedom; χ2/df). Although there is no consensus regarding an acceptable ratio for this

statistic, recommendations range from as high as 5.0 (Wheaton et al., 1977) to as low as 2.0 (Tabachnick and

Fidell, 2007).

26

Besides CMIN/DF, this study also used five other measures to test of model fitness, i.e.: Goodness-of-Fit Index

(GFI), Adjusted Goodness-of-Fit Index (AGFI), Tucker-Lewis index (TLI), Normed Fit Index (NFI), Root Mean

Square Error of Approximation (RMSEA). GFI, AGFI, TLI, and NFI are incremental fit indexes. Incremental fit

measures assess how well the estimated model fits relative to some alternative baseline model. Values for GFI,

AGFI, TLI, and NFI range between 0.0 and 1.0 with values closer to 1.0 indicating a good fit. A value of GFI,

AGFI, TLI, and NFI ≥0. 95 is indicative of good fit (Browne and Cudeck, 1993; Verschuren, 1991; Bentler,

1990; Hu and Bentler, 1999), although the conventional cut-off of this indicator is about 0.90 (Russell, 2002).

According to Ghozali (2011), the value of GFI, AGFI, TLI, and NFI from 0.0 to 0.50 are presently recognized

as indicative of marginal fit; the value of the value of GFI, AGFI, TLI, and NFI from 0.5 to 0.80 are presently

recognized as indicative of adequate fit; the value of the value of GFI, AGFI, TLI, and NFI from 0.80 to 0.90 are

presently recognized as indicative of good fit; and the value of the value of GFI, AGFI, TLI, and NFI from 0.9 to

1.00 are presently recognized as indicative of very good fit. According to Browne and Cudeck (1993), RMSEA

values ≤ 0.05 can be considered as a good fit, values between 0.05 and 0.08 as an adequate fit, and values

between 0.08 and 0.10 as a mediocre fit, whereas values > 0.10 are not acceptable. Marsh et al. (2004) suggest

that 0.08 should be acceptable in most circumstances (see also Wijayanto, 2008). The final results of the six

statistical fit index to measure of model fit can be seen in Table 4. To increase the statistical fit index according

to their cut-off value, items of AS1 and TC1 have to be deleted from the hypothesized model.

Table 4. Statistical fit indices to measure of model fit Statistical fit index to measure of model fit

Result Cut off value Meaning

CMIN/DF 3.009 2 ≤CMIN/DF ≤ 5 Good Fit GFI 0.773 0≤GFI, AGFI, TLI, and NFI < 0.5 marginal fit

0.5≤GFI, AGFI, TLI, and NFI < 0.8adequate fit 0.8 ≤GFI, AGFI, TLI, and NFI < 0.9 good fit

0.9≤GFI, AGFI, TLI, and NFI ≤1. 0 very good fit

Adequate fit AGFI 0.714 Adequate fit TLI 0.762 Adequate fit NFI 0.726 Adequate fit RMSEA 0.052 RMSEA ≤ 0.05 (good fit

0.05 < RMSEA ≤ 0.08 adequate fit 0.08 < RMSEA ≤ 0.10 mediocre fit,

Adequate fit

4.3. Bivariate Analysis among Variables

The bivariate analysis aims to analyze the relationship between two variables. The result of

bivariate analysis between latent and predictor variables can be seen in Table 5

Table 5. Result of Bivariate Analysis between Latent and Predictor Variables

AS AS1 AS2 AS3 AS 1 0.676** 0.802** 0.785** AS1 0.676** 1 0.255** 0.250** AS2 0.802** 0.255** 1 0.556** AS3 0.785** 0.250** 0.556** 1

UN UN1 UN2 UN3 UN 1 0.860** 0.816** 0.817** UN1 0.860** 1 0.568** 0.581** UN2 0.816** 0.568** 1 0.458** UN3 0.817** 0.581** 0.458** 1

27

WC WC1 WC2 WC 1 0.899** 0.874** WC1 0.899** 1 0.574** WC2 0.874** 0.574** 1

CC CC1 CC2 CC3 CC4 CC 1 .843** .761** .779** .778** CC1 .843** 1 .634** .526** .495** CC2 .761** .634** 1 .359** .422** CC3 .779** .526** .359** 1 .564** CC4 .778** .495** .422** .564** 1

TC TC1 TC2 TC3 TC4 TC5 TC 1 .762** .473** .794** .793** .760** TC1 .762** 1 .150 .640** .547** .469** TC2 .473** .150 1 .284** .260** .276** TC3 .794** .640** .284** 1 .499** .518** TC4 .793** .547** .260** .499** 1 .478** TC5 .760** .469** .276** .518** .478** 1 TC6 .756** .448** .151 .475** .647** .570**

CA CA1 CA2 CA3 CA 1 .820** .808** .824** CA1 .820** 1 .598** .497** CA2 .808** .598** 1 .566** CA3 .824** .497** .566** 1

LI LI1 LI2 LI3 LI 1 .808** .827** .814** LI1 .808** 1 .489** .471** LI2 .827** .489** 1 .540** LI3 .814** .471** .540** 1

The result of bivariate analysis between the latent variable, it turned out that all of the predictor variables show a

statistically significant relationship with latent variable. It can be said that the entire bundle of predictors predicts

the outcome latent variable.

4.4. Hypothesis Test

The results of the hypothesis testing are presented in Table 6. Hypothesis testing is done by testing the direct

influence of Critical Ratio (CR) on each line direct effect partially. If the value of CR> 1.96 and the p-value is

less than 5% (p < 0.05), we accept the hypothesis (it means we reject the null hypothesis - there is no effect).

Table 6. Result of hypothesis testing Hypothesis Relationship Critical Ratio p-value Result

H1 Transaction cost of economics Level of integration (+) 9.180 < 0.05 Accepted

H2 Asset specificity Transaction cost of economics (+) 1.125 > 0.05 (0.260) Rejected

H3 Uncertainty condition Transaction cost of economics (+) 10.286 < 0.05 Accepted

H4 Collaborative advantage Level of integration (+) 10.129 < 0.05 Accepted

H5 Uncertainty condition Collaborative advantage (-) -6.884 < 0.05 Accepted

H6 Collaboration capability Collaborative advantage (+) 5.262 < 0.05 Accepted

H7 Willingness to collaborate Collaborative advantage (+) 1.626 > 0.05 (0.104) Rejected

It can be seen that not all the hypotheses given by the study are proven by the model in the case of the supply

chain of broiler chicken. Although this study refers to the conceptual model of a previous study belonging to Ji et

al. (2012), the results of this study are slightly different. Ji et al. (2012) found that all the hypotheses given by the

study are proven by the model in the case of China´s pork chain, but could not be proven in the case of broiler

28

chicken chain. Both studies could prove the significant effect of the transaction cost of economics and

collaborative advantage on the level of integration. This study also found that the effect of transaction costs is

stronger than collaboration advantages on the level of integration. However, this study only can prove the effect

of uncertain conditions on the transaction cost of economics between traders and the middlemen. At the level of

significance of 0.05, this study failed to prove that asset specificity between the traders and the middlemen has a

positive significant effect on the transaction cost economics. According to Williamson (1981), high asset

specificity leads to increases on the transaction cost economics because the asset is fully specialized to a single

use or user only. This asset, therefore, assumes low transferability to another use or user. The broad advice is that

when assets are not specific to an exchange the market may be the most efficient way (or the best way for

minimizing costs) to organize it (Williamson, 1989). The degree of asset specificity ranges from nonspecific to

mixed to idiosyncratic (Williamson, 1979, 1985). The asset specificity assumption might be called the locomotive

or driving assumption of TCE as Williamson himself states the importance of asset specificity to transaction cost

economics is difficult to exaggerate (Williamson, 1985). So based on the statement from Williamson (1981,

1985, 1989), we argue that the unsupported relationship between asset specify and TCE might be caused by the

fact that asset specify in the trader-middleman transaction is very low. In this case, most of our sample are small

traders of broiler chicken, which did not need assets that are specially designed for the use of just one particular

transaction with one broiler chicken middlemen. This asset can be used for other broiler chicken’s processors (or

middlemen) without huge adaptation. It is the reason, why in the broiler chicken chain, this study could not prove

the significant effect of asset specificity on the transaction cost economics. The hesitancy of the existence of

asset specifications could also be seen from the mean of item AS2 (mean=3.128) and AS3 (mean=3.224); which

is the traders of broiler chicken will lose the time and effort have been invested in building the good collaboration

with a former middleman, if they switch to the new middleman. The mean of those items closes in 3 rather than

4. This condition indicates that, on average, traders of broiler chickens were not sure of the existence of asset

specifications between them and their broiler chicken middlemen. The traders were not sure about losing all

physical assets (facilities and tools) that had been invested if they switched to another product. The traders were

also not sure about losing the time and effort that had been invested in building good collaboration if they

switched to a new middleman. Moreover, asset specificity could be claimed to be the most important construct of

the transaction cost paradigm because of opportunism (Jaakko, 2015). So, since our sample consists of small

traders of broiler chicken with very low asset specify, the asset specificity could not be claimed as an important

factor for transaction cost because no threat of opportunism or no beneficial for the middlemen to behave

opportunistically.

The other difference of this study with Ji et al. (2012), is that this study only can prove the effect of uncertainty

conditions and collaboration capability on the collaborative advantage. At the level significance of 0.05, this

study also failed to prove that willingness to collaborate from the traders and the middlemen has a positive

significance effect of the collaborative advantage between them. According to Camarinha-Maltos and Rosas

(2010), willingness to collaborate depends on a variety of aspects, including the perceived risks, external

incentives, or the presence of a fierce competition. Related to the previously rejected hypothesis (hypothesis 2),

the insignificance of the effect of willingness to collaborate on the collaborative advantage could be happening

because the traders do not perceive a significant risk or incentive or fierce competition in making relationships

29

with their middlemen due to the absence of specific assets between traders and middlemen. The hesitancy of

willingness for the traders to collaborate with their middlemen could also be seen from the mean of item WC1

(mean=3.208) and item WC2 (mean=3.368). This condition indicates that, on average, the traders were not sure

about their willingness to collaborate with the middlemen by knowing better their middlemen preference and

giving greater effort to maximize the joint value between them.

Related to the past study about transaction cost economics, asset specificity, and uncertain condition, the findings

of this study suggest that, for transactions which do not involve a fully specialized asset to a single use or user

only, transaction cost economics are less influenced by the asset specificity. Then, relating to the past study about

collaborative advantage, uncertainty condition, collaboration capability, and willingness to collaborate, the

findings of this study suggest that, for the condition of market, which is perceived as low risk, low incentive, and

low competition, the collaborative advantage is less influenced by the willingness to collaborate.

5. Conclusion

This study aims to investigate the relationship between asset specificity, uncertainty condition, collaboration

capability, willingness to collaborate, transaction cost economics, collaborative advantage, and the level of

integration between traders and middlemen of broiler chicken. Specifically, the investigation took place at seven

traditional town markets in Semarang, Central Java province (North Johar market, Central Johar market, South

Johar market, Bulu market, Karangayu market, Peterongan market, and Jatingaleh market). Based on the results

of data processing, this study found that not all the hypotheses given by the study are proven by the model. This

study could prove the significant effect of transaction cost of economics and collaborative advantage on the level

of integration and the effect of transaction cost is stronger than collaboration advantages on the level of

integration. This study also found that the effect of transaction cost is stronger than collaboration advantages on

the level of integration. Transaction cost economics significantly depend on uncertainty condition between

traders and the middlemen of broiler chicken; whereas, the collaborative advantage significantly depends on

uncertainty condition and collaboration capability. This study failed to prove that asset specificity between the

traders and the middlemen of broiler chicken has a significant effect on the transaction cost economics. This

study also failed to prove that willingness to collaborate from the traders and middlemen has a significant effect

on the collaborative advantage between them. The authors argue this condition could be happening because this

study uses small traders and middlemen, which did not use fully specialized assets for a single use or user only.

This condition meant the traders did not perceive a significant risk or incentive or fierce competition in making

relationship with their middlemen; on average, the traders were not sure about their willingness to collaborate

with the middlemen by knowing their middlemen preference better and making a greater effort to maximize the

joint value between them.

This study has some limitations. The first limitation relates to the sample size. The sample size of the current

study was 125 traders. Although this sample size met the minimum requirement, this sample study only came

from traders of broiler chicken of 7 traditional town markets in Semarang, Central Java and most of our sample

consisted of small traders with average sales of broiler chicken from 100 kg to 300 kg a day. Therefore, the

results of the study may not be generalized to the entire population or to another object in the supply chain. It is

30

possible that the results of the study may be subject to the characteristics of the object of the supply chain. Thus,

future research should attempt to examine the relationship between asset specificity, uncertainty condition,

collaboration capability, willingness to collaborate, transaction cost economics, collaborative advantage, and the

level of integration between the traders and middlemen of broiler chickens across many different markets

(traditional market, modern market) and with samples from other geographical areas. This will give the

opportunity to make comparisons between different markets and between different geographical areas.

The second limitation related to the size of the trader of broiler chicken, which became a sample of this study.

Although we argue that hypothesis 2 is rejected, perhaps due to size of the traders; in fact, this study did not

include the size of the traders and middlemen as a variable to differentiate the effects of asset specificity,

uncertainty condition, collaboration capability, willingness to collaborate, transaction cost economics, and

collaborative advantage. The third limitation of this study is related to performance measurement. This study did

not conduct any performance measurements due to inability to gather the required financial data. Based on the

second and the third limitations of this study, future research should attempt to include the size of the object and

performance measurement as variables to strengthen this study.

In terms of theoretical implication and practical implication, this study has concluded as follows. This study

contributes to the existing body of knowledge by examining the effect of asset specificity, uncertainty condition,

collaboration capability, willingness to collaborate, transaction cost economics, collaborative advantage, and the

level of integration. Although previous studies in the pork supply chain from Ji et al. (2012) suggest that asset

specificity and uncertain conditions have a significant effect on transaction cost economics and uncertainty

condition, collaboration capability, willingness to collaborate have a significant effect on collaborative

advantage, this empirical study in the broiler chicken supply chain shows different results. So, in terms of

theoretical implication, the characteristics of the supply chain may give a different result for the factors which

can influence transaction cost economics and collaborative advantage. In other words, it can be said that the

factors which are influencing the transaction cost economics and the factors which are influencing the

collaborative advantage may be slightly different due to the characteristics of the supply chain. In terms of

practical implications, the outcome of this research has given valuable feedback which can be used for designing

the supply chain governance structure in the broiler chicken supply chain. This feedback is important since there

were several types of supply chain governance structure in use for agribusiness, from spot markets until vertical

integration (e.g. Ferguson, 2004; Kim 1998; Mighell and Jones 1963; Barkema & Drabenstott 1995; Hobbs 1996;

Peterson and Wysocki 1997). The actors (traders) in the broiler chicken supply chain should remember that some

factors have a more significant effect on building levels of integration, i.e. transaction cost economics, uncertain

conditions, collaboration capability, and collaborative advantage. Traders of broiler chicken should ensure that

their business has the high transaction cost economics and uncertain condition, their partner has high

collaboration capability and the relationship has the high collaborative advantage before they decide to design

integration with their partner.

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aries susanty <ariessusanty@gmail.com>

Refereeing Process: Editor comments IJSTM-157912 6 messages

Inderscience Online <noreply@indersciencemail.com> Fri, Mar 10, 2017 at 9:57 PMReply-To: Inderscience Online <noreply@indersciencemail.com>, Submissions Manager<submissions@inderscience.com>To: "Dr. Aries Susanty" <ariessusanty@gmail.com>, Dr Ahmad Syamil <asyamil@binus.edu>, Dr Hery Suliantoro<suliantoro_hery@yahoo.com>, Mrs Evelin Siburian <siburian.eveline@yahoo.com>, Benny Tjahjono<b.tjahjono@cranfield.ac.uk>

Dear Author(s), We have received further comments from the Panel of Reviewers for your paper "AN EMPIRICAL STUDY OF THEANTECEDENT FACTORS AFFECTING GOVERNANCE STRUCTURE CHOICE IN THE SUPPLY CHAIN OFBROILER CHICKENS IN CENTRAL JAVA, INDONESIA" We request you to implement in your latest author's revised version (AV) file the following new recommendationsmade by the reviewers, no later than 20 March 2017: Reviewer A Comments: ================== Basically I think the author has addressed all my comments in the revised version of the paper. However, there arefew minor points that require further revisions, including: 1. The revised title "An Empirical Study Governance Structure Choice in the Supply Chain of Broiler Chickens inCentral Java, Indonesia" is a bit too long and has a grammatical problem. It would be better to start with .."Governance Structure Choice in the Supply Chain:........" where the sub-title come after : 2. The language needs attention. Few examples in the revised parts: Governance become a new subject ..... (page 12) the relationships addressed is only ....... (page 19) this study have a new questionnaire ....... (page 22) there was 1 items have Standardized Regression ...... (page 24) The use of professional proofreader is recommended. Reviewer B Comments: ================== I have seen some improvement on the revised submission, however there are still several areas that require authorattention to be improved: - There are many language errors, please proof read the final version. - The paragraph discussing AEC in the introduction has been revised, however I don't see strong relevant with thepaper. - Data collection: -what is the response rate of the survey? -As the researcher helped the respondents in answering questionnaire, how to ensure there is no bias? It mightuseful to consider common method variance. - Fig 2: Please do not screen-shot from AMOS. RESULTS: - The structure of this section need to be revised. 4.1 should be respondent profile, followed by validity and reliabilitytest and bi-variate correlation. However bi-variate correlation should be amongst latent variable ONLY. - As most of the fit-indices are below requirement, author need to argue how to ensure the robustness of the modelas well as the results. Hypotheses tests: The sentence in the paragraph: ...... The hesitancy of the existence of asset specifications could also be seen from the mean of item AS2(mean=3.128) and AS3 (mean=3.224); which is the traders of broiler chicken will lose the time and effort have beeninvested in building the good collaboration with a former middleman, if they switch to the new middleman. The mean

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of those items closes in 3 rather than 4. ..... All hypotheses in this study were essentially testing the relationship amongst LATENT variable. Analyzing the resultson the item level is in-appropriate. CONCLUSION: _ please do not just summarize, instead DRAW a conclusion. The last sentence in the conclusion: "Traders of broiler chicken should ensure that their business has the high transaction cost economics and uncertaincondition, their partner has high collaboration capability and the relationship has the high collaborative advantagebefore they decide to design integration with their partner." - This is contain logical fallacy. Transaction cost comes from the type of product, and other factor of the business. Canwe raise the transaction cost? please have a look again the TCE theory. - As TCE states, when transaction cost is hight then long-term collaboration should be sought in order or achieve totaloptimal condition. Collaboration and integration should not be sought in supply chain. There are ample of literaturediscussing this. Reviewer's annotated version file: http://www.inderscience.com/revFile.php?id=1365536 Instructions: ------------ 1. To help reviewers to verify that you have made the required corrections, you must append the summary ofmodifications made to the paper at the beginning of your revised manuscript. 2. To upload your revised version, please login at: http://www.inderscience.com/ospeers/login.php (if you do not remember your Username/Password, visit http://www.inderscience.com/forgotpw.php) 3. After login, point your browser to http://www.inderscience.com/ospeers/admin/author/articlestatus.php?id=157912 here you should scroll-down to find the input box "Author's revised version of file:". Please click on "Browse…" to findyour revised version and then click on "Upload" to include your revised version in our databases. 4. Click on "Editor/Author Comments" to see all the recommendations made by the reviewers. Your prompt attention is much appreciated. Benny Tjahjono Int. J. of Services Technology and Management (IJSTM) submissions@inderscience.com

aries susanty <ariessusanty@gmail.com> Sat, Mar 11, 2017 at 12:47 AMTo: Inderscience Online <noreply@indersciencemail.com>, Submissions Manager <submissions@inderscience.com>

Dear Dr BennyCan I submit the revision paper at 25 March, because I will go to Europe in this weekend until 18 March 2017? Best regardsaries[Quoted text hidden]

aries susanty <ariessusanty@gmail.com> Sat, Mar 11, 2017 at 12:50 AMTo: Ahmad Syamil <asyamil@gmail.com>

Assalamualakukum wr wb Pak seminggu ini saya mau pergi ke Eropa (insyalloh)untuk menghemat waktu, bapak check grammarnya aja lagi...terus beri warna beda untuk grammar yang sudahdiperbaiki (kasih warna ijo deh). Jadi kita sama-sama kerja. Saya dah minta reschedule ama Dr, Benny agar bisadiberi kelonggaran waktu sampe tanggal 25 maret.

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Best regardsaries[Quoted text hidden]

Submissions <submissions@journalservice.net> Sat, Mar 11, 2017 at 2:32 PMTo: Benny Tjahjono <b.tjahjono@cranfield.ac.uk>Cc: aries susanty <ariessusanty@gmail.com>

Dear Benny Tjahjono,

FW for your kind attention.

Best regards,

Joane

submissions@inderscience.com

[Quoted text hidden]

This email has been checked for viruses by Avast an�virus so�ware. www.avast.com

Tjahjono, Benny <B.Tjahjono@cranfield.ac.uk> Sat, Mar 11, 2017 at 2:39 PMTo: aries susanty <ariessusanty@gmail.com>

Dear Aries, Yes that's fine, I am looking forward to receiving it on 25th March 2017. Regards, Benny Dr Benny Tjahjono Senior Lecturer in Supply Chain Operations Building 32, Cranfield University, Cranfield, Bedfordshire MK43 0AL T: +44 (0) 1234 750111 x2852 E: b.tjahjono@cranfield.ac.uk

From: Submissions <submissions@journalservice.net> Sent: 11 March 2017 07:32:29 To: Tjahjono, Benny Cc: 'aries susanty' Subject: FW: Refereeing Process: Editor comments IJSTM-157912 [Quoted text hidden]

aries susanty <ariessusanty@gmail.com> Sat, Mar 25, 2017 at 9:08 PM

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To: aries susanty <ariessusanty@gmail.com>

---------- Forwarded message ---------- From: Inderscience Online <noreply@indersciencemail.com> Date: Fri, Mar 10, 2017 at 9:57 PM Subject: Refereeing Process: Editor comments IJSTM-157912 To: "Dr. Aries Susanty" <ariessusanty@gmail.com>, Dr Ahmad Syamil <asyamil@binus.edu>, Dr Hery Suliantoro<suliantoro_hery@yahoo.com>, Mrs Evelin Siburian <siburian.eveline@yahoo.com>, Benny Tjahjono<b.tjahjono@cranfield.ac.uk> [Quoted text hidden]

1

ANSWER FOR REVIEWER

Reviewer A Comments:

Comment Answer Basically I think the author has addressed all my comments in the revised version of the paper. However, there are few minor points that require further revisions, including: 1. The revised title "An Empirical Study

Governance Structure Choice in the Supply Chain of Broiler Chickens in Central Java, Indonesia" is a bit too long and has a grammatical problem. It would be better to start with .. "Governance Structure Choice in the Supply Chain:........" where the sub-title come after :

Following your suggestions, we have revised the title of this paper. New title: “Governance Structure Choice in the Supply Chain of Broiler Chickens: An Empirical Study in Central Java, Indonesia”

2. The language needs attention. Few examples in the revised parts: Governance become a new subject ..... (page 12) the relationships addressed is only ....... (page 19) this study have a new questionnaire....... (page 22) there was 1 items have Standardized Regression ...... (page 24) The use of professional proofreader is recommended.

Following your suggestions, a native and professional proofreader has revised our paper.

Reviewer B Comments:

Comment Answer I have seen some improvement on the revised submission, however there are still several areas that require author attention to be improved: 1. There are many language errors, please proof

read the final version A native and professional proofreader has revised our paper.

2. The paragraph discussing AEC in the introduction has been revised, however I don't see strong relevant with the paper.

We have revised the paragraph discussing the AEC.

3. Data collection: What is the response rate of the survey?

This study utilized closed-ended questionnaires

for data collection. To ensure that the final number of collected data met the prerequisites of SEM, the 157 closed questionnaires were administered to the broiler chicken in North Johar market, Central Johar market, South

2

Comment Answer

As the researcher helped the respondents in

answering questionnaire, how to ensure there is no bias? It might useful to consider common method variance.

Johar market, Bulu market, Karangayu market, Peterongan market, and Jatingaleh market. We have received 125 valid responses out of 157 closed-ended questionnaire, which represent a response rate of more than 80%

Following your suggestions, we have added the result of testing for CMV in the Data Collection Procedure section and in the section The Result of Common Method Variance Test for Final Questionnaire section. We also added some paragraphs below:

We also gave the respondents some real-world examples when they could not understand the meaning of questions. Sometimes, we helped the respondents by translating the questionnaire into local Javanese language. However, because of this study used a single survey respondent as the source for both the independent and dependent data in one instrument, there were the possibility of bias in answering the questionnaires. Additionally, the design of the survey instrument itself can cause raters to bias their responses. In this case, Common Method Variance (CMV) is used to test the observation of such bias The goal of testing for CMV is to determine to what degree any such biases exist. There were three different methods or techniques that can be used to test the CMV or to estimate the degree to which the data may be influenced by biases caused by the survey method or tool, namely Harman Single Factor, Common Latent Factor, and Common Marker Variable (Eichhorn, 2014). In this study, we used the Common Latent Factor Method as method to test the CMV The Common Latent Factor Method is used to test the CMV. In this method, a common latent variable was added and regressed to every observed item to determine the common variance among all observed items. Then, the standardized regression weights from common latent factor model should be compared to the standardized regression weights of a model without the common latent factor (Shu et al, 2015). The result in Table 2 indicated that the difference of standardized regression weights of all observed items was less than 0.2, suggesting that no CMV was found or no bias was found (see Podsakoff et al. 2003).

3

Comment Answer

Fig 2: Please do not screen-shot from AMOS. RESULTS:

The structure of this section need to be revised. 4.1 should be respondent profile, followed by validity and reliability test and bi-variate correlation. However bi-variate correlation should be amongst latent variable ONLY.

As most of the fit-indices are below requirement, author need to argue how to ensure the robustness of the model as well as the results.

We have fixed the Figure 2

We have fixed the structure of this section and conduct bi-variate test among latent variable only

We have added some arguments related with

the robustness of the model as well as the results “Basically, a variety of alternative goodness-of-fit indices (such as GFI, AGFI, TLI, NFI, and RMSEA) have been developed to supplement the chi-square statistic. All of these alternative indices attempt to adjust for the effect of sample size, and many of them also take into account model degrees of freedom, which is a proxy for model size. SEM software programs routinely report a handful of goodness-of-fit indices. Some of these indices work better than others under certain conditions. It is generally recommended that multiple indices be considered simultaneously when the overall model fit is evaluated. Despite the sample size sensitivity problem with the chi-square test, it is also recommended for reporting the model chi-square value with its degrees of freedom in addition to the other fit indices. Moreover, when the hypothesized model is rejected based on goodness of-fit statistics, SEM researchers are often interested in finding an alternative model that fits the data until the model is accepted based on goodness of-fit statistics (Lei and Wu, 2007).

The final hypothesized model in this study was found after some modifications to increase the statistical fit indices and the model was measured using the chi-square value with its degrees of freedom and other goodness-of-fit indices. All of indices used to measure the model have values within the acceptable ranges, i.e., the chi-square value with its degrees of freedom was belonging to good fit criteria and the

4

Comment Answer

values of other fit indices were belonging to adequate fit criteria. Therefore, we could say that final hypothesized model was robust enough to explain the antecedent factors affecting governance structure choices in the supply chain of broiler chicken.

4. Hypotheses tests: The sentence in the paragraph: ...... The hesitancy of the existence of asset specifications could also be seen from the mean of item AS2 (mean=3.128) and AS3 (mean=3.224); which is the traders of broiler chicken will lose the time and effort have been invested in building the good collaboration with a former middleman, if they switch to the new middleman. The mean of those items closes in 3 rather than 4. ..... All hypotheses in this study were essentially testing the relationship amongst LATENT variable. Analyzing the results on the item level is in-appropriate.

We have deleted the item-level results.

Furthermore, we have added some analyses related to the relationships among latent variables: “…..asset specificity could be claimed to be the most important construct of the transaction cost paradigm because of opportunism (Jaakko, 2015). So, since our sample consists of small traders with very low asset specificity, the asset specificity could not be claimed as an important factor for transaction cost because no threat of opportunism or no beneficial for the middlemen to behave opportunistically” “…..willingness to collaborate depends on a variety of aspects, including the perceived risks, external incentives, or the presence of fierce competition. This insignificance, which is related to the previously rejected hypothesis (hypothesis 2), could be happening because the traders do not perceive a significant risk or incentive or fierce competition in making relationships with their middlemen due to the absence of specific assets between traders and middlemen”

5. CONCLUSION: Please do not just summarize, instead

DRAW a conclusion. The last sentence in the conclusion: "Traders of broiler chicken should ensure that their business has the high transaction cost economics and uncertain condition, their partner has high collaboration capability and the relationship has the high collaborative advantage before they decide to design integration with their partner."

Following your suggestions, we have revised the conclusion and the last sentence in the conclusion.

5

Comment Answer This is contain logical fallacy. Transaction cost comes from the type of product, and other factor of the business. Can we raise the transaction cost? please have a look again the TCE theory. As TCE states, when transaction cost is hight then long-term collaboration should be sought in order or achieve total optimal condition. Collaboration and integration should not be sought in supply chain. There are ample of literature discussing this.

https://mail.google.com/mail/u/0?ik=1b72e64c13&view=pt&search=all&permthid=thread-f%3A1567840879177063964&simpl=msg-f%3A1567840… 3/3

Tjahjono, Benny <B.Tjahjono@cranfield.ac.uk> Sat, May 20, 2017 at 3:44 PMTo: aries susanty <ariessusanty@gmail.com>Cc: pak hery <suliantoro_hery@yahoo.com>, Mrs Evelin Siburian <siburian.eveline@yahoo.com>, Dr Ahmad Syamil<asyamil@binus.edu>

Dear Aries, Sorry for the inconvenience. This matter has now been resolved. Pls wait for the decision, and thanks for yourpatience.

All the best, Benny

Dr Benny Tjahjono Senior Lecturer in Supply Chain Operations Building 32, Cranfield University, Cranfield, Bedfordshire MK43 0AL

T: +44 (0) 1234 750111 x2852 E: b.tjahjono@cranfield.ac.uk

From: aries susanty <ariessusanty@gmail.com> Sent: 20 May 2017 00:09:57 To: Submissions Manager; Inderscience Online Cc: pak hery; Tjahjono, Benny; Mrs Evelin Siburian; Dr Ahmad Syamil Subject: Re: Refereeing Process: Editor comments IJSTM-157912

[Quoted text hidden]

aries susanty <ariessusanty@gmail.com> Sat, May 20, 2017 at 6:58 PMTo: "Tjahjono, Benny" <B.Tjahjono@cranfield.ac.uk>

Thanks for your emailRegardsAries[Quoted text hidden]

08/03/2019 Gmail - Final Refereeing Decision IJSTM_157912

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aries susanty <ariessusanty@gmail.com>

Final Refereeing Decision IJSTM_157912 6 messages

Inderscience Online <noreply@indersciencemail.com> Thu, May 25, 2017 at 5:21 PMReply-To: Inderscience Online <noreply@indersciencemail.com>, Submissions Manager<submissions@inderscience.com>To: ariessusanty@gmail.com, asyamil@binus.edu, suliantoro_hery@yahoo.com, siburian.eveline@yahoo.com, Editor<dana@eskia.co.uk>, Handling Editor <b.tjahjono@cranfield.ac.uk>

Dear Aries Susanty, Ahmad Syamil, Hery Suliantoro, Evelin Siburian, Ref: IJSTM-157912 Submission "AN EMPIRICAL STUDY OF THE ANTECEDENT FACTORS AFFECTINGGOVERNANCE STRUCTURE CHOICE IN THE SUPPLY CHAIN OF BROILER CHICKENS IN CENTRAL JAVA,INDONESIA" Congratulations, your above mentioned submitted article has been refereed and accepted for publication in theInternational Journal of Services Technology and Management. The paper is accepted providing that the text andEnglish language in the revised paper must be checked, edited and corrected by authors preferably by a nativeEnglish speaker. The acceptance of your article for publication in the journal reflects the high status of your work byyour fellow professionals in the field. You need now to login at http://www.inderscience.com/login.php and go to http://www.inderscience.com/ospeers/admin/author/articlelist.php to find your submission and complete the following tasks: 1. Save the "Editor's post-review version" on your local disk so you can edit it. If the file is in PDF format and youcannot edit it, use instead your last MS Word revised version, making sure to include there all the reviewrecommendations made during the review process. Rename the new file to "authorFinalVersion." 2. Open the "authorFinalVersion" file and remove your reply or any response to reviewers that you might have in thefront of your article. 3. Restore the author's identification, such as names, email addresses, mailing addresses and biographicalstatements in the first page of your local file "authorFinalVersion." 4. IMPORTANT: The paper is accepted providing that you, the author, check, edit and correct the English language inthe paper. Please proofread all the text and make sure to correct any grammar and spelling mistakes. 5. Save your changes in the file "authorFinalVersion" and use the "Browse…" and "Upload" buttons to upload the fileon our online system. 6. Click on "Update Metadata" to correct the title, abstract and keywords according the recommendations receivedfrom the Editor. You must make sure that the title, abstract and keywords are totally free of English Spelling andGrammar errors. Do not forget to click the "Update" button to save your changes. 7. Once you have updated the metadata, check the box "Yes." 8. Upload a zipped file with the Copyright Agreement forms signed by each author. We need a signed authoragreement form for every author and every co-author. Please insert the full names of all authors, reflecting the nameorder given in the article. 9. To see a sample of real articles that have been published in the International Journal of Services Technology andManagement visit http://www.inderscience.com/info/ingeneral/sample.php?jcode=ijstm. Finally click on the "Notify Editor" button to let the editor know that you have completed the six tasks. Your continuing help and cooperation is most appreciated. Best regards, Dr. Benny Tjahjono, Guest Editor International Journal of Services Technology and Management submissions@inderscience.com

08/03/2019 Gmail - Final Refereeing Decision IJSTM_157912

https://mail.google.com/mail/u/0?ik=1b72e64c13&view=pt&search=all&permthid=thread-f%3A1568363183399065379&simpl=msg-f%3A1568363… 2/3

aries susanty <ariessusanty@gmail.com> Thu, Jun 1, 2017 at 9:33 AMTo: Inderscience Online <noreply@indersciencemail.com>, Submissions Manager <submissions@inderscience.com>,dana@eskia.co.uk, "Tjahjono, Benny" <B.Tjahjono@cranfield.ac.uk>, Ahmad Syamil <asyamil@gmail.com>

Dear Dr. Benny Tjahono I try to upload the copyright in compressed file (zip file) but always fails.Maybe you give me any suggestion? Thank you very much for your kindness and attention best regardsAries [Quoted text hidden]

Copyright Agreement forms.zip 14565K

aries susanty <ariessusanty@gmail.com> Thu, Jun 1, 2017 at 9:36 AMTo: Ahmad Syamil <asyamil@gmail.com>

Assalamualaikum wr wb mungkin bisa bantu untuk upload yang copyrightgagal melulu neh username ariessusantypassword safira1004[Quoted text hidden]

Copyright Agreement forms.zip 14565K

Tjahjono, Benny <B.Tjahjono@cranfield.ac.uk> Thu, Jun 1, 2017 at 9:03 PMTo: aries susanty <ariessusanty@gmail.com>Cc: Ahmad Syamil <asyamil@gmail.com>

Dear Aries,

Have you considered reducing the resolution of the scanned files hence the zip file?

Regards,

Benny

From: aries susanty [mailto:ariessusanty@gmail.com] Sent: 01 June 2017 03:34 To: Inderscience Online; Submissions Manager; dana@eskia.co.uk; Tjahjono, Benny; Ahmad Syamil Subject: Re: Final Refereeing Decision IJSTM_157912

Dear Dr. Benny Tjahono

[Quoted text hidden][Quoted text hidden]

aries susanty <ariessusanty@gmail.com> Thu, Jun 1, 2017 at 9:46 PMTo: "Tjahjono, Benny" <B.Tjahjono@cranfield.ac.uk>

Ok..

08/03/2019 Gmail - Final Refereeing Decision IJSTM_157912

https://mail.google.com/mail/u/0?ik=1b72e64c13&view=pt&search=all&permthid=thread-f%3A1568363183399065379&simpl=msg-f%3A1568363… 3/3

I will try it and let you the result Thanks for attentionRegardsAries[Quoted text hidden]

aries susanty <ariessusanty@gmail.com> Fri, Jun 2, 2017 at 8:17 AMTo: "Tjahjono, Benny" <B.Tjahjono@cranfield.ac.uk>

Dear Dr Benny As your suggestion, I try to compress in the smaller size But, it does not work. Can I submit the copyright form manually. By email? regards aries [Quoted text hidden]

Int. J. Services Technology and Management, Vol. X, No. Y, xxxx 1

Copyright © 20XX Inderscience Enterprises Ltd.

Governance structure choice in the supply chain of broiler chickens: an empirical study in Central Java, Indonesia

Aries Susanty*, Hery Suliantoro, and Eveline Siburian Department of Industrial Engineering, Diponegoro University, Prof Soedarto, Campus Tembalang, Semarang, Indonesia Email: ariessusanty@gmail.com Email: suliantoro_hery@yahoo.com Email: Siburian_eveline@yahoo.com *Corresponding author

Ahmad Syamil Bina Nusantara University, Jakarta, Indonesia Email: asyamil@binus.edu

Abstract: This study aims to clarify the dominant factors (which can be defined as antecedent factors) influencing the structure choice in the supply chain governance of traders and middlemen of broiler chickens. This study has utilised closed-ended questionnaires with 5-Likert Scale distributed to several traders and middlemen of broiler chickens in the traditional town market in Semarang City of Central Java Province. One hundred and twenty-five copies of the questionnaire were administered to the traders of broiler chickens in these marketplaces: North Johar, Central Johar, South Johar, Bulu, Karangayu, Peterongan, and Jatingaleh. Additional information was collected through follow-up telephone interviews and archive records. Data acquired from the questionnaire were processed using structural equation modelling (SEM). The findings indicate that the transaction cost economy and the collaborative advantage have a significant positive effect on the level of integration; in this case, the effect of the transaction cost economics stronger than that of collaboration advantages. The findings also suggest that the transaction cost economics significantly depends on uncertain conditions between traders and the middlemen; whereas, the collaborative advantage significantly depends on uncertain conditions and collaboration capability.

Keywords: transaction cost economics; TCE’ collaborative advantage; level of integration; broiler chicken; supply chain; Semarang; Indonesia.

Reference to this paper should be made as follows: Susanty, A., Suliantoro, H., Siburian, E. and Syamil, A. (xxxx) ‘Governance structure choice in the supply chain of broiler chickens: an empirical study in Central Java, Indonesia’, Int. J. Services Technology and Management, Vol. X, No. Y, pp.000–000.

2 A. Susanty et al.

Biographical notes: Aries Susanty is a Permanent Lecturer in the Department of Industrial Engineering, Diponegoro University, Indonesia. Additionally, she is also a Lecturer in Operations Management at Mercu Buana University and a Lecturer in International Classes at Telkom University. She received her Bachelor, Master, and PhD degrees all in Industrial Engineering from Bandung Institute of Technology, Indonesia. She published and presented her researches nationally and internationally in the areas of industrial engineering, organisation performance, operations and supply chain management, and corporate governance. Her researches have been funded by the Indonesian Ministry of Industry, Indonesian Institute of Corporate Governance (IICG), the Indonesian Ministry of Education, the Regional Planning Board of West Java Province, and the Indonesian Ministry of Energy and Mineral Resources.

Hery Suliantoro is a Permanent Lecturer in the Department of Industrial Engineering, Diponegoro University, Indonesia. He received his Bachelor’s degree in Mechanical Engineering from Sepuluh November Institute of Technology, Master’s degree in Industrial Engineering from Bandung Institute of Technology, and Doctoral degree in Economics from Diponegoro University. He published and presented his researches nationally and internationally in the areas of industrial engineering, organisation performance, and procurement system.

Eveline Siburian is a full-time student who is completing her Master’s degree in the School of Economic and Business, University of Indonesia. Her major is Financial Management. She is active in the Master of Management Student Committee, i.e., a post-graduate student association in her university. She received her Bachelor’s degree from Industrial Engineering majoring in Supply Chain Management from the Department of Industrial Engineering, Diponegoro University. Her interests are global supply chain management, strategic management, and financial management.

Ahmad Syamil is the Dean of Master of Management Programs, Bina Nusantara University, Jakarta, Indonesia. Previously, he was an Associate Professor at College of Business, Arkansas State University, State University, Arkansas, USA. He received his Bachelor’s degree in Mechanical Engineering from Bandung Institute of Technology, Indonesia, MBA from the University of Houston, USA and PhD in Manufacturing Management from the University of Toledo, Ohio, USA. He received three professional certifications, including a certified fellow from the Association of Operations Management (APICS) and another three certifications from the American Society or Quality (ASQ). He has presented his papers nationally and internationally as well as published extensively in various journals such as Journal of Intelligent Manufacturing, Journal of Business and Information Technology, European Journal of Innovation Management, Journal of Supply Chain Management, Marketing Education Review, International Journal of Logistic Systems and Management, and others. His Doctoral dissertation on Product Development in the US and German Auto Industry Supply Chain was a finalist of the Richard N. Farmer Award for the best dissertation in international business by the Academy of International Business.

This paper is a revised and expanded version of a paper entitled [title] presented at [name, location and date of conference].

Comment [N1]: Author: Please reduce biographical details of Ahmad Syamil to no more than 100 words.

Comment [t2]: Author: If a previous version of your paper has originally been presented at a conference please complete the statement to this effect or delete if not applicable.

16 A. Susanty et al.

demonstrates an acceptable level of internal consistency of each of the construct indicators. The final items used for the questionnaire and the results of the validity and reliability test for initial questionnaire can be seen in Table 3.

4.2.2 CMV test The Common Latent Factor Method is used to test the CMV. In this method, a common latent variable was added and regressed to every observed item to determine the common variance among all observed items. Then, the standardised regression weights from common latent factor model should be compared to the standardised regression weights of a model without the common latent factor (Shu et al., 2015). The result in Table 3 indicated that the difference of standardised regression weights of all valid observed items (after removing the non-valid items from initial questionnaire) was less than 0.2, suggesting that no CMV was found or no bias was found (see Podsakoff et al., 2003). Table 3 The results of CMV test with common latent factor method

Standardised regression weights: with CLF

Standardised regression weights: without CLF Differences

UN1 <--- UN 0.719 0.719 0.000 UN2 <--- UN 0.737 0.738 0.001 UN3 <--- UN 0.734 0.734 0.000 AS1 <--- AS 0.348 0.349 0.001 AS2 <--- AS 0.795 0.793 (0.002) AS3 <--- AS 0.693 0.694 0.001 WC1 <--- WC 0.736 0.736 0.000 WC2 <--- WC 0.779 0.780 0.001 CC1 <--- CC 0.700 0.700 0.000 CC2 <--- CC 0.670 0.670 0.000 CC3 <--- CC 0.747 0.747 0.000 CC4 <--- CC 0.704 0.704 0.000 CA1 <--- CA 0.752 0.752 0.000 CA2 <--- CA 0.743 0.743 0.000 CA3 <--- CA 0.734 0.734 0.000 CA4 <--- CA 0.750 0.750 0.000 TC1 <--- TC 0.728 0.728 0.000 TC2 <--- TC 0.310 0.311 0.001 TC3 <--- TC 0.737 0.737 0.000 TC4 <--- TC 0.720 0.720 0.000 TC5 <--- TC 0.735 0.735 0.000 TC6 <--- TC 0.714 0.714 0.000 LI1 <--- LI 0.719 0.723 0.004 LI2 <--- LI 0.709 0.708 (0.001) LI3 <--- LI 0.689 0.688 (0.001)

Comment [N4]: Author: Please confirm if this should be Shu and Quynh (2015). Reference entry: Shu, C.Y. and Quynh, N.T.N. (2015) ‘Guan-Xi, loyalty, contribution and ‘speak-up behavior: the role of leader-member exchange (LMX) as mediator and political skill as moderator’, Eurasian Journal of Business and Management, Vol. 3, No. 2, pp.54–73.

Governance structure choice in the supply chain of broiler chickens 23

traders and the middlemen has a significant positive effect on the TCE. According to Williamson (1981), high asset specificity leads to increases on the TCE because the asset is fully specialised to a single use or user only. This asset, therefore, assumes low transferability to another use or user. The broad advice is that when assets are not specific to an exchange in the market may be the most efficient way (or the best way for minimising costs) to organise it (Williamson, 1989). The degree of asset specificity ranges from non-specific to mixed to idiosyncratic (Williamson, 1979, 1985). The asset specificity assumption might be called the locomotive or driving assumption of TCE as Williamson himself states the importance of asset specificity to TCE is hard to exaggerate (Williamson, 1985).

So based on the statement from Williamson (1981, 1985, 1989), we argue that the unsupported relationship between asset specificity and TCE might be caused by the fact that asset specificity in the trader-middleman transaction is very low. In this case, many of our sample members are small traders, who did not need assets that are specially designed for the use of just one particular transaction with one broiler chicken intermediary. This asset can be used for other broiler chicken’s processors (or middlemen) without huge adaptation. It is the reason why this study could not prove the significant effect of asset specificity on the TCE.

Moreover, asset specificity could be claimed to be the most important construct of the transaction cost paradigm because of opportunism (Jaakko, 2015). So, since our sample consists of small traders with very low asset specificity, the asset specificity could not be claimed as an important factor for transaction cost because no threat of opportunism or no beneficial for the middlemen to behave opportunistically.

The other difference of this study compared to that of Ji et al. (2012) is that it could only prove the effect of uncertainty conditions and collaboration capability on the collaborative advantage. At the level of significance of 0.05, this study also failed to prove that the willingness to collaborate from the traders and the middlemen has a significant positive effect on the collaborative advantage between them. According to Camarinha-Maltos and Rosas (2010), willingness to collaborate depends on a variety of aspects, including the perceived risks, external incentives, or the presence of fierce competition. This insignificance, which is related to the previously rejected hypothesis (Hypothesis 2), could be happening because the traders do not perceive a significant risk or incentive or fierce competition in making relationships with their middlemen due to the absence of specific assets between traders and middlemen.

Related to the past studies about TCE, asset specificity, and uncertain condition, the findings of this study suggest that, for transactions which do not involve a fully specialised asset to a single use or user only, TCE are less influenced by the asset specificity. As for regarding collaborative advantage, uncertainty condition, collaboration capability, and willingness to collaborate, the findings suggest that, for the condition of the market, which is perceived as low risk, low incentive, and low competition, the collaborative advantage is less influenced by the willingness to collaborate.

5 Conclusions

This study aims to investigate the relationships between asset specificity, uncertainty condition, collaboration capability, willingness to collaborate, TCE, collaborative advantage, and the level of integration between traders and middlemen of broiler

Comment [N5]: Author: Please provide full reference or delete from the text if not required.

Governance structure choice in the supply chain of broiler chickens 25

results. So, in terms of theoretical implication, the characteristics of the supply chain may give a different result for the factors that can influence TCE and collaborative advantage. In other words, the factors influencing the TCE and those influencing the collaborative advantage may be slightly different due to the characteristics of the supply chain. Regarding the practical implications, the outcome of this research has given valuable feedback that can be used for designing the supply chain governance structure in the broiler chicken supply chain. This feedback is important since there are several types of supply chain governance structure in use for agribusiness, from spot markets to vertical integration (e.g., Ferguson, 2004; Kim, 1998; Mighell and Jones, 1963; Barkema and Drabenstott, 1995; Hobbs, 1996; Peterson and Wysocki 1997). The actors (traders) in the broiler chicken supply chain should remember that some factors have a more significant effect on building levels of integration, i.e. TCE, uncertain conditions, collaboration capability, and collaborative advantage. As TCE states, when transaction cost is high then long-term collaboration should be sought in order or achieve total optimal condition. In this case, when the transaction cost is high, the actors in the broiler chicken supply chain may prefer to collaborate since they anticipate greater benefits such as better quality and certainty of order fulfilment as well as customer service level or customer satisfaction improvement.

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Comment [N6]: Author: Please provide the publisher and place of publication.

Comment [N7]: Author: Please cite the reference in the text or delete from the list if not required.

Comment [N8]: Author: Please provide the issue number.

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Comment [N9]: (1) Author: Please cite the reference in the text or delete from the list if not required. (2) Author: Please provide the place of publication.

Comment [N10]: Author: Please cite the reference in the text or delete from the list if not required.

Comment [N11]: Author: Please provide the issue number.

Comment [N12]: Author: Please provide the place of publication.

Governance structure choice in the supply chain of broiler chickens 27

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Governance structure choice in the supply chain of broiler chickens 31

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AMENDMENTS TO PROOF JOURNAL: Int. J. Services Technology and Management AUTHORS NAME: Aries Susanty, Hery Suliantoro, Eveline Siburian, Ahmad Syamil PAPER TITLE: Governance structure choice in the supply chain of broiler chickens: an empirical study in Central Java, Indonesia

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2 Biographical notes Ahmad Syamil is the Dean of Master of Management Programs, Bina Nusantara University, Jakarta, Indonesia. Previously, he was an Associate Professor at College of Business, Arkansas State University, State University, Arkansas, USA. He received his bachelor degree in mechanical engineering from Bandung Institute of Technology, Indonesia, MBA from the University of Houston, USA and PhD in Manufacturing Management from the University of Toledo, Ohio, USA. Dr. Syamil has presented his papers nationally and internationally as well as published extensively in various journals.

2 Previous version of the paper

This paper is a revised and expanded version of a paper entitled [title] presented at [name, location and date of conference]. (no previous version of the paper, please deleted)

6 1. Introduction Add in reference Soedjana, T.D. (1999) ‘International trade in livestock, livestock products and livestock inputs’, in Riethmuller, P. et al (Eds.), Livestock Industries of Indonesia prior to the Asian Financial Crisis, Food and Agriculture Organization of the United Nations, Regional Office for Asia and the Pacific, Bangkok, Thailand, pp.99–114

16 4.2.2.CMV test (Shu et al., 2015). Shu and Quynh (2015).

23 4.5 Hypothesis test 3 (Jaakko, 2015). (Oittinen,2015)

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27 Reference 17 Jap, S.D. (1999) ‘Pie-expansion efforts: collaboration processes in buyer-supplier relationships’, Journal of Marketing Research, Vol. 36, No. 4, pp.461–475

27 Reference 19 Ji, C., de Felipe, I., Briz, J. and Trienekens, J.H. (2012) ‘An empirical study on governance structure choices in Chinas pork supply chain’, International Food and Agribusiness Management Review., Vol. 15, No.2, pp.121–152.

27 Reference 20 Jöreskog, K.G. (1999) How Large Can a Standardized Coefficient Be, Unpublished Technical Report [online] http://www.ssicentral.com/lisrel/techdocs/ HowLargeCanaStandardizedCoefficientbe.pdf. (Accessed 15 July 2016).

27 Reference 21 Jöreskog, K.G. and Sörbom, D. (1993) LISREL 8: Structural Equation Modeling with the SIMPLIS Command Language, Scientific Software International, Chicago, Illinois

28 Reference 7 Kinsey, J. (2002) The Supply Chain of Pork: US and China, Vol. 2, No. 1, Food Industry Center, University of Minnesota, Minneapolis, Minnesota

28 Reference 11 Kumar, N., Scheer, L.K. and Steenkamp, J.B.E. (1995) ‘The effects of supplier fairness on vulnerable resellers’, Journal of Marketing Research, Vol. 32, No. 1, pp.54–65.

28 Reference 18 Marsh, H.W., Hau, K.T. and Wen, Z. (2004) ‘In search of golden rules: comment on hypothesis-testing approaches to setting cutoff values for fit indexes and

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dangers in overgeneralizing Hu and Bentler’s (1999) findings’, Structural Equation Modeling, Vol. 11,No.3,

pp.320–341. 28 Reference 20 Mighell, R.L. and Jones,

L.A. (1963) Vertical Coordination in Agriculture.

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29 Reference 5 Nicholson, C. and Young, B. (2012) ‘The relationship between supermarkets and suppliers: what are the implications for consumers?’, Consumers International, Vol. 1, p.7.

Nicholson, C. and Young, B. (2012) The relationship between supermarkets and suppliers: what are the implications for consumers?, Summary of the Main Report, Consumers International and Europe Economics.

29 Reference 6 Noordewier, T.G., John, G. and Nevin, J.R. (1990) ‘Performance outcomes of purchasing arrangements in industrial buyer-vendor relationships’, The Journal of Marketing, Vol. 54, No. 4, pp.80–93.

29 Reference 9 Oktavera, R. and Andajani, E. (2013) Implementation of Value Chain Analysis in the Broiler Supply Chain Agribusiness.

Oktavera, R. and Andajani, E. (2013), ‘Implementation of Value Chain Analysis in the Broiler Supply Chain Agribusiness’ in Proceedings of the 10th International Annual Symposium On Management, Surabaya University, Surabaya, Indonesia, pp. 1268-1279.

29 Reference 10 Peterson, H.C. and Wysocki, A.F. (1997) The Vertical Coordination Continuum and the Determinants of Firm-Level Coordination Strategy, No. 11817, Michigan State University, Department of Agricultural, Food, and Resource Economics

Peterson, H.C. and Wysocki, A.F. (1997) The Vertical Coordination Continuum and the Determinants of Firm-Level Coordination Strategy, Staff Paper, No. 11817, Department of Agricultural, Food, and Resource Economics, Michigan State University, Michigan, United States

29 Reference 12 Promsivapallop, P. (2009) A Critical Evaluation of Transaction Cost Economics Applied to Outsourcing in the Hotel Industry in Thailand, Doctoral dissertation, University of Surrey, United Kingdom

29 Reference 16 Rindfleisch, A. and Heide, J.B. (1997) ‘Transaction cost analysis: past, present, and future applications’, The Journal of Marketing, Vol. 61, No.4, pp.30–54.

30 Reference 1 Suh, T. and Kwon, I.W.G. (2006) ‘Matter over mind: When specific asset investment affects calculative trust in supply chain partnership’, Industrial Marketing Management, Vol. 35, No. 2, pp.191–201.

30 Reference 2 Sujatanond, S. Tibkaew, A.P. and Pramojanee, P. (2013) ‘Consequences of the ASEAN Economic Community (AEC) on Thailand Agricultural situation and food security of Southern Thailand’, GMSARN International Journal, Vol. 7, No. 4, pp.139–144.

30 Reference 3 Sumiarto, B. and Arifin, B. (2008) Overview on Poultry Sector and HPAI Situation for Indonesia with Special Emphasis on the Island of Java-Background Paper, Manuscript submitted for publication, Royal Veterinary College [online] http://www.ifpri.org/publication/ overviewpoultry-sector-and-hpai-situationindonesia-

special-emphasis-island-java. (Accessed 15 July 2016).

30 Reference 6 Thompson, L. and Hastie, R. (1990) ‘Social perception in negotiation’, Organizational Behavior and Human Decision Processes, Vol. 47, No. 1, pp.98–123.

30 Reference 9 United States Agency for International Development (USAID) (2013) Indonesia s Poultry Value Chain, Nathan Associates Inc., United States

30 Reference 13 Weleschuk, I.T. and Kerr, W.A. (1995) ‘The sharing of risks and returns in prairie special crops: a transaction cost approach’, Canadian Journal of Agricultural Economics, Vol. 43, No.2, pp.237–258.

30 Reference 20 Williamson, O.E. (1981) ‘The economics of

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organization: the transaction cost approach’, American Journal of Sociology, Vol. 87, No.3, pp.548–577

31 Reference 2 Williamson, O.E. (1991) ‘Comparative economic organization: the analysis of discrete structural alternatives’, Administrative Science Quarterly, Vol.36, No.2, pp.269–296

31 Reference 4 Williamson, O.E. (1994) ‘Transaction cost economics and organization theory’, Organization Theory: From Chester Barnard to the Present and Beyond, pp.207–256.

31 Reference 5 Williamson, O.E. (1996) ‘Economics and organization: a primer’, California Management Review, Vol. 38, No. 2, pp.131–146