Dynamic Capabilities: Evidence from Agriculture Cooperatives in Indonesia
The growth cooperatives membership in Indonesia has led to a range of economic and business questions about how these cooperatives should be best organized and operated. One important question relating to cooperatives organization considering their rapid growth in number and size is the appropriate sizing of cooperatives for long-run economic viability. This paper aims at exploring contributions of dynamic capabilities and organizational culture in performance of agriculture cooperatives in Indonesia. This study use structural equation model (SEM) to explore a theoretical model which links various dynamic capabilities, organizational culture, competitive advantage and performance. Technical samples in this research are simple random sampling with a large sample of 241 agriculture cooperatives from five region in Indonesia . This study finds that both dynamic capability and organizational culture of the agriculture cooperatives in Indonesia contribute significant and positive effect to their competitive advantage as well. On the other hand, organizational culture in the Indonesian agriculture cooperatives provide positive effect solely to their performance; yet not for their performance which is in significantly affected by the dynamic capability.
Keywords: Dynamic capabilities; organizational culture;competitive advantage; performance; agriculture, cooperatives.
 Ambrosini, V. and Bowman, C. (2009). ”What Are Dynamic Capabilities and Are They a Useful Construct in Strategic Management?”, International Journal of Management Reviews, vol.11, no 1, pp. 29-49.
 Bate, S. 1994, Strategies for Cultural Change, Butterworth Heinemann, Oxford.
 Bennett, R.H., Fadil, P.A. & Greenwood, R.T. (1994). Cultural alignment in response to strategic organizational change: new considerations for a change framework, Journal of Managerial Issues, vol 6, no 4.pp 474-90.
 Bustinza, O., Aranda, D., & Gutierrez, L. (2010). Outsourcing, competitive capabilities and performance: an empirical study in service firms. International Journal Production Economics, vol 126, pp 276-288.
 Byles, C.M. & Keating, J.R. (1989). Strength of organization culture and performance: Strategic implications, Journal of Business Strategies, vol 6,no 2.pp 42-54.
 Camuffo A., Volpato G. (1996). ”Dynamic Capabilities and Manufacturing Automation: Organizational Learning in the Italian Automobile Industry”, Industrial and Corporate Change, vol 5, no 3, pp.813-837.
 Cooper, L.C., Cartwright, S. & Earley, C.P. (2001). The International Handbook of Organizational Culture and Climate, 1st edition, Wiley.
 Denison, D.R (1984). Bringing corporate culture to the bottom line. Organizational Dynamic, vol 13, no 2,pp 4-22.
 D’Aveni, R. A., Dagnino, G. B., & Smith, K. G. (2010). The age of temporary advantage. Strategic Management Journal, vol 31,no 13, pp 1371–138.
 Denison, D.R. & Mishra, A.K. (1995). Towards a theory of organizational culture and effectiveness, Organization Science, vol 6, no 3,pp 204-223.
 Deal, T.E. & Kennedy, A.A. (1982). Corporate Cultures: The Rites and Rituals of Corporate Life, Reading.
 Drnevich, P.L., Kriauciunas, A.P., (2011). Clarifying the conditions and limits of the contributions of ordinary and dynamic capabilities to relative firm performance. Strategic Management Journal,vol 32,pp 254-279.
 Eisenhardt KM, Martin J. (2000). Dynamic capabilities: what are they?’ Strategic Management Journal,Special Issue, vol 21, no 10–11,pp 1105–1121.
 Fryer, K., Antony, J., Ogden, S. (2009) “Performance management in the public sector”, International Journal of Public Sector Management, vol 22, no 6, pp. 478-498.
 Fornell, C., Larcker, D.F., (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research vol 18,pp 39-50.
 Griffith, D. A. and Harvey, M. G. (2001). A resource perspective of global dynamiccapabilities, Journal of International Business Studies, vol 32, no 3, 597-606.
 Giberson, R.T., Resick, J.C., Dickson, W.M., Mitchelson, K.J., Randall, R.K., & Clark, A.M. (2009). Leadership and organizational culture: linking CEO characteristics to cultural values, Journal of Business Psychology, vol 24,pp 123-137.
 Gordon, G. (1985). The relationship of corporate culture to industry sector and corporate performance. In R. H. Kilman, M. J. Saxton, & R. Serpa (Eds.), Gaining control of the corporate culture.
 Hambrick, D. (1981) ‘Specialization of environmental scanning activities among upper level executives’, Journal of Management Studies, Vol. 18, pp.299–320.
 Hair, J.F., Ringle, C.M., Sarstedt, M., (2011). PLS-SEM: indeed a silver bullet. Journal of Marketing Theory and Practice, vol 19, pp 139-151.
 Hawke, L. (2012). Australian public sector performance management: success or stagnation? International Journal of Productivity and Performance Management,vol 6,no 13, pp 10-328
 Haeckel, S. H. (1999). Adaptive enterprise: Creating and leading sense-and-respond organisations. Boston: Harvard Business School Press.
 Helfat, C., Finkelstein, S., Mitchell, W., Peteraf, M., Singh, H., Teece, D., Winter, S., (2007). Dynamic Capabilities: Understanding Strategic Change in Organisations. Blackwell Publishing, Malden.
 Kaleka, A. (2002). Resources and capabilities driving competitive advantage in export markets: Guidelines for industrial exporters, Industrial Marketing Management, vol 31,no 3,pp273-283.
 Kotler, P & Keller, K. L. (2006). Marketing management. (12th ed.). Prentice-Hall
 Kline, R.B. (1998). Principles and practices of structural equation modeling, New York, N.Y.:The Guildford Press.
 Kleinbaum, D.G., Kupper, I.,& Muller, K.E. (1998). Applied regression analysis and other multivariate methods. Belmont, CA: Duxbury Press.
 Kim, J., Song, J., & Koo, C. (2008). Exploring the effect of strategic positioning on performance in the e-business context. International Journal of Information Management, vol 28, pp 203-214.
 Kotler, P & Keller, K. L. (2006). Marketing management. (12th ed.). Prentice-Hall
 Kristal, M. M., Huang, X., & Roth, A. V. (2010). The effect of an ambidextrous supply chain strategy on combinative competitive capabilities and business performance. Journal of Operations Management,vol.12,no 2.241-245
 Li, J. (1995). Foreign entry and survival: Effects of strategic choices on performance ininternational markets, Strategic Management Journal, vol 16,no 5, pp 333-351.
 Law, M., Stewart, D., Pollock, N., Letts, L., Bosch, J.,& Westmorland, M., (1998). Guidelines for critical review form-Quantitative studies.,vol 284,pp 357-362.
 Medori, D. and Steeple, D., (2000). A framework for auditing and enhancing performance measurement systems. International Journal of Operations & Production Management, vol 20, no 5, pp 520-533.
 Neil, S., MCKee, D., & Rose, G.M. (2007). Developing the organization’s sensemaking capability: Precursor to an adaptive strategic marketing response, Industrial Marketing Management, vol 36, no 6, pp 731-744.
 Noble.,C.H. (1999). The Eclectic Roots of Strategy Implementation Research“. Journal of Business Research, vol 45, pp 119-134.
 Nunnally, J.C., (1978). Psychometric Theory. McGraw-Hill, New York.
 O’Reilly, A.C. & Chatman, A.J. (1996). Culture as a social control: corporations, cults and commitment, Research in Organizational Behaviour, vol 18,pp 157-200.
 Ott, J.S. (1989). The organizational culture perspective, Pacific Grove, Calif: Brooks/Cole.
 Porter, M. (1985). Competitive advantage: Creating and sustaining superior performance. New York: The Free Press.
 Palmer, I. 1977. The New Rice in Indonesia. UNRISD, Geneva.
 Peters, T. & Waterman, R. 1982, In Search of Excellence, Harper & Row, Sydney.
 Pretty, J.N., 1995. Regenerating Agriculture: Policies and practice for Sustainability and self reliance.London: Earthscan publication Ltd, and Washington, DC: National Acedemy Press.
 Prange, C. and Verdier, S. (2011). Dynamic capabilities, internationalization processes and performance, Journal of World Business, vol 46, no1, pp126-133.
 Podsakoff, P. M., MacKenzie, S. B., Lee, J.-Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, vol 88, pp 879-903.
 Raduan, C.R, U, J, A, H & I, A.I., (2009). ’A Conceptual Framework of the Relationship between Organizational Resources, Capabilities, Systems, Competitive Advantage and Performance’, Research Journal of Internat