Sustainable distribution through coopetition strategy - Taylor & Francis ...

International Journal of Logistics: Research and Applications, 2015 Vol. 18, No. 5, 424–441, http://dx.doi.org/10.1080/13675567.2014.977236

Sustainable distribution through coopetition strategy Chattharn Limoubpratum, Himanshu Shee ∗ and Kamrul Ahsan College of Business, Supply Chain and Logistics Management, Victoria University, City Flinders Campus, Melbourne, Vic, Australia (Received 18 September 2013; accepted 11 October 2014) Sustainability research has increasingly progressed to incorporate economic, environmental and social aspects of business. While firms are inherently competing with each other in logistics distribution, this study investigates whether coopetition strategy (i.e. cooperate and compete) can lead to achieving the sustainability. Using a cross-sectional sample of newspaper supply chain partners including transporters and newsagents in Thailand, the results of structural equation modelling path analysis suggest that managers strongly believe in coopetitive approach to achieve sustainable logistics distribution resulting in significant economic, social and environmental improvement. The findings help managers to understand that firms that perceive to collaborate with competitors in a horizontal relationship can achieve sustainable logistic distribution. Keywords: sustainable distribution; coopetition; newspaper industry; SEM analysis; Thailand

1.

Introduction

The issue of sustainability has become increasingly important due to excessive global warming, greenhouse gas emission, growing social problems and rising cost of business operations (Montiel 2008). Sustainability is defined as ‘meeting the needs of a firm’s direct and indirect stakeholders (e.g. shareholders, employees, clients, pressure groups, communities and environment), without compromising its ability to meet the need of future stakeholders’ (Dyllick and Hockerts 2002). To achieve the goal of sustainability, a firm needs to focus on three main dimensions: economic, social and environmental or, namely, the ‘triple bottom line’ (TBL) or ‘3Ps’ (i.e. planet, people and profit) (Montiel 2008). A firm, as an organism, consumes substantial natural and human resources from the society (Azapagic 2003). Therefore, it must act proactively to sustain environmental resources and communities/societies for the future generations and, at the same time, sustain its stakeholders’ benefits. Since the 1990s, logisticians have been increasingly concerned with logistics activities that yield a negative effect on the natural environment and societies, as well as on economic and firm performance (Murphy, Poist, and Braunschweig 1995; Murphy and Poist 2003). According to McKinnon (2000), distribution and transportation process must be improved as substantial fuel consumption is increasingly causing negative impact on economic, social and environmental dimensions. To keep the negative impact at minimum, firms need to consider sustainable freight distribution. Sustainable freight distribution refers to the management of freight distribution and transportation process that includes order processing, warehousing, packaging and *Corresponding author. Emails: [email protected]; [email protected] © 2014 Taylor & Francis

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delivering/returning products whilst considering sustainability dimension to minimise social and environmental effects and sustain firm performance (Wu and Dunn 1995; McKinnon 2000; Belz and Peattie 2009). Furthermore, sustainable logistics distribution refers to the management of information flows and movement of raw materials and semi-finished and final products along the supply chain by taking a sustainability dimension into account while developing and implementing business strategies and operations (Carter and Rogers 2008; Darnall, Jolley, and Handfield 2008; Seuring et al. 2008; Andersen and Skjoett-Larsen 2009; Pedersen 2009). At present, there is a potential strategic solution suggested for distribution, namely through horizontal cooperation among competitors, that is, coopetition (COOP) (McKinnon et al. 2010). COOP as a business strategy implies that the organisation should cooperate as well as compete simultaneously with its competitors to achieve common goals and objectives through joint distribution activities (Brandenburger and Nalebuff 1998; Bengtsson and Kock 2000; Chin, Chan, and Lam 2008). COOP can lead to improving distribution efficiency and effectiveness of supply chain operations (Sutherland 2003). Literature so far has fairly discussed COOP strategy that drives a firm’s performance success (Zineldin 2004; Min et al. 2005; Chin, Chan, and Lam 2008; Bouncken and Fredrich 2011), and associated advantages in general business context (Barringer and Harrison 2000). The advantages of COOP include sharing of knowledge, pooling of resources and competencies and sharing risks and benefits, resulting in cost reduction. While the improved performance through COOP is considerably researched, the study of its effect on firm sustainability is rare. Moreover, the research on COOP is under-represented specifically in logistics distribution. Logistics distribution includes logistics movement from warehousing to distribution points, covering various geographical regions and operating as third-party logistics (3PL) service providers. This raises the question of whether the COOP strategy taken by stakeholders would help the 3PL in combating the issues around transportation. Through another stream of literature from supply chain management, it is quite clear that human capital, economic and environmental issues of the TBL seem to be well focused and researched (Carter and Rogers 2008; Carter and Easton 2011; Winter and Knemeyer 2013). It is yet unknown how COOP strategy affects the TBL of sustainability. Given that the logistics distribution affects humans and society significantly, it calls for an investigation as a social requirement. Considering the substantial use of transportation in logistics operations and the associated pollution impact, it is essential to study how COOP strategy can improve the condition of society and environment. Therefore, we consider COOP as a means to achieve the logistics distribution sustainability. We develop a hypothesised model to examine the effect of COOP strategies on sustainable distribution in the Thailand newspaper industry context. Through a questionnaire survey and using structural equation modelling (SEM), the study tests the hypothesised relationship among the constructs. The rest of the paper is organised as follows. In Section 2, we review background literature on COOP and sustainable distribution, leading to the development of a theoretical model of the study including scale measures. In Section 3, we present our methodology clearly outlining analysis techniques, sampling and data collection method. Results of the study with descriptive statistics, test of reliability and validity are presented in Section 4 which includes hypothesis testing. Section 5 presents the discussion on the positive relationship between COOP and sustainable distribution. Finally, Section 6 provides concluding remarks.

2.

COOP and sustainable distribution: a theoretical model

Environmental and social impacts of distribution logistics have caused much debate in the last decade. The environmental problems primarily originate from greenhouse gas emissions of

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carbon dioxide (CO2 ) as the main cause of global warming (Akyelken 2011). Transportation sector alone accounts for 33% of the total CO2 emissions worldwide (EPA 2012). Social and environmental sustainability issues are interrelated with economic sustainability, as the latter generates profits, employment and social welfare while consuming substantial social and environmental resources (Azapagic 2003). Therefore, in the context of logistics management, an improvement of freight management is a priori to improving sustainability (McKinnon 2000). A firm needs to evaluate the costs of sustainability issues, which stem from economic, environmental and social costs. Economic costs are associated with the reduction of social welfare and scarcity of resources, cost of health and safety, waste, carbon tax, fuel cost and cost of compliance with environmental regulations (McKinnon et al. 2010). Environmental costs are related to thinning of the ozone layer, global warming, disappearance of rain forests and acid rain (McKinnon et al. 2010). Social costs are related to unemployment, diminished consumer satisfaction and chronic illnesses (e.g. asthma, reactive airways disease, hypertension and other respiratory illness) (McKinnon et al. 2010; VTPI 2011). Stakeholders along the supply chain are increasingly demanding sustainable performance through supplier selection and development, carrier selection, location decision of warehouse, freight distribution, and vehicle routeing and utilisation (Carter and Easton 2011). Customers, on the other hand, are increasingly requiring low-risk supply chain, product stewardship, and socially responsible and green supply chains (Sundarakani et al. 2010). Beamon (2008) argues that consumers are the main pressure who emphasise sustainability in the supply chain, increasingly demanding faster delivery with shorter lead time, lower price and better quality of products in greater variety. Sustainability in supply chain management is critical for gaining legitimacy, fulfilling social requirement and maximising benefits of stakeholders. As a consequence of increasing competitiveness (Shee, VanGramberg, and Foley 2011) and regulations pertaining to sustainable development set by many governments, independent firms are forced to collaborate and recognise the value of networks, alliances and joint operations in their effort to meet new market environment, demands and challenges (McKinnon et al. 2010; Bigliardi, Dormio, and Galati 2011). A broad approach to this initiative is cooperation among firms. A single firm cannot expand, access new markets or optimise business operations without the consideration of alliance partners (Dagnino and Padula 2002; Bigliardi, Dormio, and Galati 2011), and cannot optimise route planning, logistics capacity, vehicle capacity utilisation, full truck load and transport process alone (Cruijssen, Cools, and Dullaert 2007; Leitner et al. 2011). Therefore, the focal firm must cooperate with external parties, including suppliers, customers (i.e. vertical cooperation), competitors and complementors (i.e. horizontal cooperation), for improving business performance (Barratt 2004). The more specific term of horizontal cooperation used in this study is COOP. COOP derives from the combination of simultaneous cooperation and competition (Bengtsson and Kock 2000; Cruijssen, Cools, and Dullaert 2007; Osarenkhoe 2010). Verstrepen et al. (2009) identify strategic, tactical and operational cooperation as the three degrees of cooperation with a competitor. However, collaboration is more critical than cooperation for enabling COOP because the former requires a higher level of magnitude and closeness in terms of sharing risk, knowledge, information and profit (Mentzer, Foggin, and Golicic 2000; Golicic, Foggin, and Mentzer 2003). Competition strategy has been debated since Porter’s (1980) seminal work on five-force model that refers to competition among the players in market. Later, Kim and Mauborgne (2007) argue that traditional competition-based strategies (i.e. red ocean strategies) are not sufficient to win over competitors. Alternatively, their ‘blue ocean strategy’ drives market competition based on value innovation. COOP, one of the several blue ocean strategies, is a concept that combines both cooperation and competition (Nalebuff and Brandenburger 1996; Bengtsson and Kock 2000) and a relationship based on value net of involved actors (Zineldin 2004). Beckeman, Bourlakis, and Olsson (2013) assert that COOP allows an individual organisation to improve the


Figure 1.

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Conceptual framework of sustainable distribution.

use of resources, develop relationship among supply chain partners and foster chain innovation. Academics and practitioners have gone through a wide range of debate on this very complex and diametrically opposite logics of interaction between cooperation and competition, but both benefit simultaneously (Bengtsson and Kock 2000). Barringer and Harrison (2000) review various forms of inter-organisational relationship that include joint ventures, networks, consortia, alliances, trade associations and interlocking directorates with their potential advantages and disadvantages. Trust and dependency are identified as pivotal in inter-organisational knowledge sharing (Kumar 1996; Zineldin 2004; Cheng, Yeh, and Tu 2008; Bouncken and Fredrich 2011). Min et al. (2005) state that supply chain collaboration can enhance the efficiency and effectiveness of firms. Addressing newspaper distribution problem, authors (Van Buer, Woodruff, and Olson 1999; Eraslan and Derya 2010) have recommended how distribution cost can be minimised through a printer–transporter partnership. Despite the literature’s focus on COOP strategy, it has ignored how the COOP could benefit environmental and social issues around a firm. The concept of COOP was proposed as an antecedent factor for achieving sustainable freight distribution (McKinnon 2000). Nevertheless, it requires managerial inputs into the relationship establishment. For collaborative relationships, Min et al. (2005) propose six antecedent elements: strategic intent (i.e. aims and objectives), internal alignment (i.e. adapting the current operation towards the collaborative arrangement), relationship management (RM) (i.e. an establishment of collaborative relationship), information sharing (i.e. sharing latest and specific information), resource sharing (i.e. sharing facilities and human resources) and formalisation (i.e. implementation of collaborative plans, standardisation of communication technology, sharing information and agreement on common objectives and goals). The choice of antecedent factors for establishing coopetitive relationship is most critical (Chin, Chan, and Lam 2008). The authors, thus, argue for three main driving forces of COOP: management commitment (MC) (i.e. long-term commitment, management leadership and organisational learning), RM (i.e. development of trust as well as knowledge and risk sharing) and communication management (CM) (i.e. systematic planning, implementing and monitoring of communication between alliance partners). A number of scholars have partially or fully supported the need for these managerial factors in such an arrangement (Whipple and Frankel 2000; Kotzab and Teller 2003; Zineldin 2004; Morris, Koçak, and Özer 2007; Chin, Chan, and Lam 2008; Vachon and Klassen 2008; Verstrepen et al. 2009; Osarenkhoe 2010; Mention 2011; Peng et al. 2012). When parties join hands together and compete under COOP strategy, it is very likely to achieve sustainable distribution. The relationship between COOP and sustainability is indicated in the conceptual model shown in Figure 1. The majority of literature that addresses sustainability topic asserts that green logistics require organisations to work closely with and across supply chain partners towards sustainability by re-engineering inter-organisational operations, as well as production, distribution processes and prioritising social and environmental responsibility (Murphy and Poist 1992; Bowen et al. 2001; Carter and Dresner 2001; Carter and Jennings 2002). Vachon and Klassen (2008) specifically

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study environmental collaboration encompassing joint environmental planning activities and solutions for solving social and environmental issues. Cheng, Yeh, and Tu (2008) focus on interorganisational knowledge sharing in green supply chain management in the Hong Kong context, where collaboration and competition coexist. They concluded that inter-organisational knowledge sharing had the potential to enhance competitive advantage of all parties in the supply chain and improve sustainability performance. Therefore, this paper proposes that COOP and sustainable distribution are positively associated, and presents hypothesis H1 as follows. Hypothesis H1: Coopetitive relationship has a positive association with sustainable distribution. 2.1.

Measures of constructs

We used previously validated scales to operationalise the constructs used in this study. To assess COOP we used three dimensions such as MC, RM and CM. MC utilised the scales used earlier by a number of authors such as Murphy and Poist (1992); Min et al. (2005); Morris, Koçak, and Özer (2007); Chin, Chan, and Lam (2008) and Bouncken and Fredrich (2011). RM was measured by scales proposed earlier by Whipple and Frankel (2000); Zineldin (2004); Min et al. (2005); Morris, Koçak, and Özer (2007); Chin, Chan, and Lam (2008) and Osarenkhoe (2010). CM used scales from studies by Kilger and Reuter (2005); Kremic, Tukel, and Rom (2006); Chin, Chan, and Lam (2008) and Thorgren, Wincent, and Örtqvist (2009). We assessed sustainable distribution using three sub-dimensions such as economic performance (economic), human capital (social) and environmental assets (environmental). All are measured by items based on the scales developed by authors such as Murphy, Poist, and Braunschweig (1996); Alberti et al. (2000); Rao (2002); Azapagic (2003) and Juš ius and Snieška (2008). These four measures were combined with demographic items such as age, experience and qualifications into a single survey consisting of four sections and distributed to the respondents. A 5-point Likert scale ranging from one being ‘strongly disagree’ to five being ‘strongly agree’ was used to collect survey data. The questionnaire is provided at the end of the paper (Appendix 1).

3.

Methodology

We used empirical method to test the hypothesised relationship. A survey was administered among Thailand news printers, newsagents and transporters. Data were analysed for nonresponse bias, multi-collinearity, and unidimensionality before proceeding to estimate zero-order correlation between the constructs and sub-constructs. Furthermore, data were assessed for its reliability and validity. Reliability was tested through Cronbach alpha and construct reliability (CR). Convergent and discriminant validity tests were used as a measure of validity. SEM was employed to test the hypothesised relationship. SEM provides a simultaneous analysis, thereby estimating the influence of predictor variable(s) on outcome variable(s). The population chosen for this study consisted of Thailand news printers, newsagents and transporters. Newspaper firms do print and distribute newspapers through their newsagents in six regions of Thailand: North, South, East, West, South-East and Central. They use the local transporters to distribute the newspapers to customers in these regions at the earliest possible time. As newspaper is a time-sensitive and perishable product, it would lose its value and cause economic loss if distributed late (Hurter and Van Buer 1996). We drew an initial list of 1000 medium and large firms identified from Thailand Newspaper industry directory, Office of Small and Medium Enterprises Promotion of Thailand, Thailand Yellow Pages and national library


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(Thailandmagazinedirectory 2011, Yellowpages 2012) covering most of the Thai provinces. Thai Government has defined the medium enterprises as firms having an annual turnover of less than THB200 million (1USD = 31.21THB) and full-time employees less than 200. Similarly for large enterprises, the annual turnover is more than THB200 million and employees are more than 200. Data collection consisted of a mail survey of chief executive officer (CEO), managing director, distribution manager, logistics manager or purchasing managers of the selected firms. Survey administration followed the general principles recommended by Dillman (1978). All measures were pretested on 40 logistics managers who completed the survey within two weeks. On the basis of the pretest data analysis, we corrected ambiguous sentences for better understanding. Furthermore, we checked for multi-collinearity and exploratory factor loading and deleted those items that did not satisfy the study requirement. The revised questionnaire, along with a cover letter and a prepaid return envelope, was then administered to 1000 firms. We then reminded the respondents after three weeks of initial delivery via telephonic call in order to improve the response rate. This yielded a total of 368 responses including 129 incomplete questionnaires. After excluding the unusable questionnaires, the final sample size was 239, representing a response rate of 24%. The survey was carried out during February–April 2013.

4. 4.1.

Results Descriptive statistics of samples

From survey results, the respondents comprised of newsagents (32%), news printers (40%) and transporters (28%). They represented six regions of Thailand: Central (30.96%), Northern (13.39%), Southern (15.06%), Eastern (13.81%), Western (12.97%) and North-Eastern (13.81%). Therefore, it appeared that the respondents and their firms well represented the population distribution. Most of the firms’ (50.21%) annual income is below 50 million baht, 31.8% firms earn between 51 and 100 million baht, 13.81% earn between 101 and 500 million baht and 4.18% earn annually over 500 million baht. The respondents were categorised by four demographic characteristics including gender, education, experience and age. Details of the demographic characteristics are presented in Table 1. Gender-wise respondents comprise of 61.5% males and 38.5% females. Those who responded had an average < 10 years of work experience (33.29%), followed by 10–20 years (37.66%) and 21–30 years (19.67%). They hold job tiles as logistics director (20.92%), director (15.9%), CEO (15.48%), distribution director (10.46%), executive director (5.86%), coordinator (5.86%) and president (4.6%). 4.2.

Non-response bias, reliability and unidimensionality test

Zero-order correlation coefficients between the scale items are shown in Table 2. It is a clear presentation of correlation between the constructs and their sub-constructs. If inter-item correlations are greater than 0.8, the two independent variables are essentially measuring the same entity, and is known as multi-collinearity (Hair et al. 2010). Ideally, either of the items or both must be deleted from further analysis. None of the coefficients in Table 2 exceeds 0.8. The diagonal values in parentheses are alpha reliability coefficients (Cronbach 1951) ranging from 0.58 to 0.90. These exceed the minimum threshold value of 0.6 for acceptable reliability (Nunnally 1978), except one which is marginally low and retained for further analysis. Therefore, the scale items have reliably estimated the constructs and sub-constructs. Unidimensionality represents whether all the scale items together constitute a single measure. The unidimensionality of each construct and sub-construct was verified through exploratory

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C. Limoubpratum et al. Table 1.

Demographic profile of respondents (N = 239). Newsagent

Newspaper

Transporter

By owned distribution facilities

N

%

N

%

N

%

N

%

Yes No Total Education Certificate Diploma Bachelor Graduate diploma Master’s Total Gender Male Female Total Age (years) 21–30 31–40 41–50 51–60 60 + ) Total Experience < 10 Years 10–20 years 21–30 Years 31–40 Years > 40 Years Total

30 47

21.9 46.08

51 44

37.23 43.14

56 11

40.87 10.78

137 102 239

57.32 42.68 100

5 8 49 8 7

71.43 30.77 36.57 22.22 19.44

0 10 55 21 9

0 38.46 41.04 58.33 25

2 8 30 7 20

28.58 30.77 22.39 19.44 55.56

7 26 134 36 36 239

2.93 10.88 56.07 15.06 15.06 100

39 38

26.53 41.76

66 28

44.9 30.77

42 25

28.57 27.47

147 91 239

61.50 38.50 100

13 34 9 14 7

29.54 40.96 17.65 28.58 58.33

21 29 22 19 4

47.72 34.93 43.14 38.78 33.33

10 20 20 16 1

22.72 24.09 39.22 32.65 8.33

44 83 51 49 12 239

18.41 34.73 21.34 20.50 5.02 100

20 27 22 5 3

24.69 30.00 46.80 33.33 50.00

36 32 17 8 2

44.44 35.56 36.17 53.33 33.33

25 31 8 2 1

30.67 34.44 17.02 13.33 16.67

81 90 47 15 6 239

33.29 37.66 19.67 2.68 2.51 100

Table 2.

Total

Covariance effects and Cronbach alpha (N = 239). Mean

SD

1

2

COOP Sustainability

3.98 4.12

0.49 0.47

0.82 0.36

0.90

Social (SO) Economic (EC) Environment (EV) MC RM CM

4.11 4.23 3.98 3.93 4.08 3.96

0.62 0.53 0.64 0.63 0.65 0.66

0.26 0.28 0.24 0.61 0.79 0.67

0.73 0.77 0.66 0.22 0.28 0.24

3

4

5

6

7

8

0.85 0.56 0.48 0.16 0.21 0.18

0.83 0.51 0.17 0.22 0.19

0.88 0.14 0.19 0.16

0.58 0.48 0.41

0.75 0.53

0.80

Notes: Correlation coefficients are significant at p < .001. Cronbach alphas are italicised along the diagonal. Items were measured on a 5-point Likert scale (1 – strongly disagree and 5 – strongly agree).

factor analysis (EFA) using SPSS, followed by confirmatory factor analysis (CFA) by AMOS. EFA and the Cronbach alpha assured that the scale items clustered clearly on to their respective constructs. CFA and the goodness-of-fit indices indicated the model fit re-confirming that the scale items were not suffering from unidimensionality issue. Following Armstrong and Overton’s (1977) extrapolation method to assess the degree of non-response bias, we divided the responses into two waves: the responses received before and those received after reminders. Independent sample t-test with mean responses to each of the variables showed that there was no significant difference between the groups. Therefore, non-response bias is likely not an inhibitor in our analyses. Since 5-point Likert scales were used and responses were received from a single

International Journal of Logistics Research and Applications Table 3.

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Result of measurement model (CFA) with standardised coefficient, Cronbach alpha, CR and AVE.

Scale and items COOP (alpha = 0.82) (1) MC (alpha = 0.58) You are willing to create new strategy in order to align it with the goal of the relationship (MC-1) You are intending to reconfigure your internal business process in order to align it with the new business structure (MC-2) (2) RM (alpha = 0.75) You are willing to establish a relationship with your competitor (so) only if the firms are of similar size (RM-1) In a relationship you establish with your competitor(s), they must be completely open in dealings with you (RM-2) In a relationship you establish with your competitor(s), they must be honest and reliable (RM-3) (3) CM (alpha = 0.80) You are intending to keep your competitor(s) informed of new developments (e.g. technological applications) in a regular and timely manner (CM-1) You are intending to implement information technology to exchange information with your competitor(s) (CM-2) Sustainable distribution (Sus) (alpha = 0.90) (1) Environmental factor (EV) (alpha = 0.88) Reduce water pollution (EV-1) Reduce visual pollution (EV-2) Reduce odour pollution (EV-3) Reduce solid waste generation (EV-4) (2) Economic factor (EC) (alpha = 0.83) Improve firms’ reputation (EC-1) Lower the risk of business operation (EC-2) Help to find easier ways to attract external sources of sponsorship (EC-3) Broaden market coverage and generate sales increase (EC-4) Improve market opportunities (EC-5) (3) Social factor (SO) (alpha = 0.85) Increase staff motivation (SO-1) Help to attract positively motivated employees (SO-2) Improve the contribution of a firm to community development (i.e. job creation and tax breaks received) (SO-3)

Standardised loading* Alpha CR AVE 0.82 0.88 0.52 0.58 0.58 0.41 0.69 0.60 0.75 0.74 0.49 0.60 0.70 0.80 0.80 0.81 0.68 0.75 0.89 0.90 0.94 0.59 0.88 0.88 0.66 0.81 0.82 0.86 0.75 0.83 0.82 0.50 0.71 0.66 0.73 0.67 0.69 0.85 0.86 0.67 0.73 0.83 0.89

Note: Model: χ 2 = 6.513, p-value ( > .05) = 0.590; χ 2 /df ( < 3) = 0.814, GFI ( > .95) = 0.991, AGFI ( > .95) = 0.976, NFI ( > .95) = 0.982, TLI ( > .95) = 1.0, CFI ( > .95) = 1.0, RMSEA ( < .05) = 0.000, and PClose = 0.869. *p < .001.

individual in the firms, the presence of common method bias could be a possibility. We conducted a variant of Harman’s one-factor CFA suggested by Malhotra, Kim, and Patil (2006) and confirmed that the congeneric model did not fit the data (chi-square = 988.659, degree of freedom (DF) = 152, p = .000, chi-square/degree of freedom (CMIN/DF) = 6.504, goodness of fit index (GFI) = 0.619, adjusted GFI (AGFI) = 0.524, Tucker-Lewis index (TLI) = 0.510, comparative fit index (CFI) = 0.564, normed fit index (NFI) = 0.527, root mean square error of approximation (RMSEA) = 0.152, PClose = .000). Therefore, common method bias was not a concern in our analysis. 4.3.

Measurement validation

The goodness-of-fit indices of the measurement model fit the data well with χ 2 = 6.513 (p > .05). The factor standardised loading, Cronbach alpha, CR and average variances extracted (AVE) are presented in Table 3. Cronbach alpha and CR are used to assess the reliability, whereas factor standardised loading and AVE assess convergent validity. A lower value than 0.7 indicates

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Figure 2. Path analysis with parameter estimates. Note: SUS – sustainability, SO – social factor, EC – economic factor and EV – environmental factor.

inadequate alpha consistency of a multi-item scale (Hair et al. 2010). However, the lower limit of acceptability is considered to be around 0.6 (Nunnally 1978). The result for all coefficient alphas for constructs and sub-constructs in this study ranges from 0.58 to 0.90, with 0.58 indicating a reasonably adequate alpha consistency for MC. The CR values range from 0.58 to 0.94, with 0.58 indicating a reasonably adequate alpha consistency for MC as well. Standardised loadings vary from 0.60 to 0.89, indicating a good convergent validity of constructs and sub-constructs. All loadings are above the recommended value of 0.5 (Hair et al. 2010). AVE values range from 0.41 to 0.68, indicating an adequate convergent validity except MC value at 0.41. However, COOP, as a second-order construct for MC, has an AVE of 0.52, which is above the recommended value of 0.5 (Fornell and Larcker 1981). This is considered to be adequate for convergent validity which is close to threshold value (Narasimhan, Narayanan, and Srinivasan 2013). 4.4.

Hypothesis testing

The structural path model produced a very good fit to the data (χ 2 = 6.513, pvalue ( > .05) = .590; χ 2 /df ( < 2) = 0.814, GFI ( > 0.95) = 0.991, AGFI ( > 0.95) = 0.976, NFI ( > 0.95) = 0.982, TLI ( > 0.95) = 1.0, CFI ( > 0.95) = 1.0; RMSEA ( < .05) = .000, PClose = 0.869). The SEM model with standardised loadings is presented in Figure 2. The results of the hypothesis testing are presented in Table 4. All the standardised path relationships are significant at p < .001 level. The hypothesis H1 stated that COOP and sustainability were significantly associated with each other. The SEM model shows a significant, positive relationship (0.36, p < .001) between COOP and sustainability. Therefore, H1 is supported. It means those firms which cooperate and compete (i.e. COOP) will tend to achieve sustainability in logistics distribution. Sustainability results in not only from economic output but also includes environmental and social factors (. The contribution of each of them can be seen from the path model (Figure 2), where the economic factor contributes 0.77 (p < .001), environment 0.66 (p < .001) and social 0.73 (p < .001), creating an interface among the three dimensions. Having briefly discussed the research results, this paper will now offer a detail discussion on the main findings.

5.

Discussion

The study has examined whether the COOP strategy taken by firms would have any significant implications on the logistics distribution leading to sustainability. Using a cross-sectional sample of Thai news printers, transporters and newsagents, the results of path analysis suggest that COOP strategy has a significant, positive effect on distribution sustainability. For the medium

International Journal of Logistics Research and Applications Table 4.

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Path analysis parameter estimates.

Path Coop → Sus Coop → CM Coop → RM Coop → MC Sus → EV Sus → EC Sus → SO

Standardised loading (t-values) 0.36 (3.87)** 0.67 (7.22)** 0.79 (7.12)** 0.61 (7.22)** 0.66 (8.11)** 0.77 (8.38)** 0.73 (8.11)**

**p < .001.

and large firms in this study, COOP strategy is predicted in MC, RM and CM. Respondents from the surveyed firms perceive that these dimensions are significant and critical to achieve COOP that in turn influences sustainable distribution. The RM dimension appears to have a significant influence (0.79) on COOP strategy, followed by CM (0.67) and MC (MC) (0.61). Analysis of RM indicates that medium and large size firms are more likely to partner with competitors who are perceived to be honest, reliable and open in dealings. Rao (2002) argues that South-East Asian firms including those from Thailand would like to partner among themselves if there is a relationship of trust among themselves. Cheng, Yeh, and Tu (2008) claim that honesty and reliability of partners play a key role in partnership decision. Addressing the trust element while communicating between partners, firms need to be completely open in sharing information to represent honesty and reliability. The findings of this study are consistent with an earlier study by Morris, Koçak, and Özer (2007) that claims the important role of trust in COOP. Furthermore, the sampled firms would like to consider the size of potential partner firms in order to avoid any inequality of resource sharing and future conflict. While heterogeneity of resources is inherent in firms, a firm would achieve competitive advantage by sharing other competitor’s resources (Bengtsson and Kock 2000). The medium and large firms under study would like to enter into partnership with competitors who are perceived to share competence, market knowledge and other resources. MC reflects the degree of management support for implementing COOP. The respondents are of the opinion that new strategy creation according to the goal of the relationship is important. Firms need to develop a new distribution strategy in order to align the overall business and operations strategy of partner firms. Firms perceive that creation of the realigned strategy would require them to reconfigure the internal process to align with competitors. This is consistent with what Chin, Chan, and Lam’s (2008) study claims: reconfiguration of external and internal business structure is crucial for COOP. Lastly, CM is also an antecedent to achieve COOP. Under the partnership arrangement, firms are more likely to partner with competitors who are perceived to share key information between partners in a regular and timely manner. Information, however, cannot be effectively shared without the implementation of information and communication technology. Advanced information technology such as electronic data interchange is suggested to be implemented for sharing real-time information and to increase communication effectiveness (Zhao, Zhao, and Hou 2010). Overall, RM, MC and CM are likely to be critical dimensions for achieving coopetitive relationship. This paper explored the positive, significant relationship between cooperation and sustainable logistics distribution. While logistics movement accounts for a major share of the vehicular pollution, firms perceive that COOP strategies would help improving the situation. With this significant association, COOP approach is likely to boost a firm’s reputation, lower the risk of business operations and enhance market opportunity in addition to higher performance. The transporters and other stakeholders such as news printers and newsagents realised the perceived

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reduction of water pollution, visual pollution, odour pollution and solid waste through this partnership. While the other studies have primarily focused on vertical partnership for distribution efficiency, our study concentrated on horizontal partnership among the transporters to combat the pollution arising from the logistics movement. The findings of this study are consistent with similar studies on horizontal partnership by Morris, Koçak, and Özer (2007), but to assess the relationship between COOP and performance; and Cruijssen, Cools, and Dullaert (2007) to investigate the influence of COOP on cost and productivity. However, they ignored the relationship of COOP with distribution sustainability. Wu and Donn (1995) argue on balancing the economic growth with its effect on environment as economic growth comes at the cost of environmental pollution. Business, government and society, therefore, are increasingly concerned about the negative effect of environment and call for such a strategy that can improve the situation. COOP, as perceived by the medium and large firms in this study, would help best in improving the environmental issues associated with logistics movement. Furthermore, it can improve social sustainability by increasing workers’ motivation and contribution of the firm to community. Overall, firms need to consider cooperation of competitors in order to achieve sustainability in freight distribution process. Leitner et al. (2011) and Cruijssen, Cools, and Dullaert (2007) support the fact that independent firms are unable to optimise route planning, logistics capacity, vehicle capacity utilisation, full truck load and transport process without considering horizontal relationship. Therefore, this study argues that COOP is the right answer to sustainable logistics distribution issues. However, COOP works effectively away from customers where parties enter into partnership for logistics movement. On the contrary, they compete with each other when they are close to customers. Therefore, both parties can involve themselves in and benefit from cooperation and competition simultaneously (Bengtsson and Kock 2000). Medium and large firms in this study can follow this path as a measure of COOP strategy. The firms, specifically the transporters, perceive to be benefitted from activities with news printers who use them to deliver newspapers to different destinations in Thailand. However, the transport firms are free to compete among themselves in the delivery to and vicinity of the newsagents.

6.

Conclusion

The significant increase in environmental and social issues of logistics distribution over the past decades has fuelled researchers’ interest in the potential benefit of collaborating and competing in the same market space. The overarching benefit of this coopetitive business relationship is to achieve a common goal of sustainable logistics distribution. The paper set out to argue that COOP strategy is positively associated with achievement of sustainable logistics distribution. The result has shown that logistics distribution sustainability can be achieved through inter-organisational collaboration and competition simultaneously, that is, COOP. Disregarding the negatives of the COOP strategy (Barringer and Harrison 2000), this research looks at the potential benefits when firms can collaborate on some activities and compete among themselves on others. The successful achievement of economic, social and environmental improvement results through successful planning and implementation of COOP effort. The findings of this study could benefit academic communities, logisticians, related industries, economists, socialists and environmentalists on how to improve sustainability through logistics and supply chain theory. It has expanded the current knowledge of logistics and supply chain collaboration strategy to improve logistics performance towards sustainable distribution and sustainability caring for environment and society. It has demonstrated that these theories can


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contribute to improving the quality of social and natural environment while sustaining economic performance. This study offers practical implication, as findings are relevant to improving distribution and freight consolidation, as well as making logistics and supply chain operations more efficient and cost-effective. The successful establishment of coopetitive relationship will allow firms to work together for improvement of management policy, vision and mission, all achieved through joint logistics distribution. The successful joint distribution agreements among competitors will lead to the successful implementation of freight consolidation while caring for society and natural environment. Promoting sustainable distribution through the reduction of truck usages, fuel consumption and travel distance in the distribution process will enhance the COOP capability, resulting in sustainable distribution and sustainability. We acknowledge some limitations of our study that would provide an agenda for our future research. On the methodological side, the research setting and survey undertaken among all the stakeholders in one country could limit the generalisability of the findings. It can be validated through a future study in another industry context. All constructs and sub-constructs in this study have good theoretical support, but future research using longitudinal data on the effect of COOP strategy on distribution sustainability is recommended to improve our understanding. It must also be noted that the sample size is relatively small in each subgroup respondents (e.g. printers, transporters and newsagents) and that a larger sample in future research would be desirable to increase the statistical relationships. On the theoretical side, as logistics distribution sustainability is increasingly taking centre stage among researchers and practitioners, management of COOP strategy needs a follow-up action over time. It is logical to investigate and include the changes occurring in the industry and further examine the changes in the earlier stated relationship. Future research could build on this work and the dimensions presented in this study to more fully understand the dynamics of these constructs within the firms and its competitive environment. Involving an extra variable such as collaborative freight consolidation (Limoubpratum, Shee, and Ahsan 2013) into the framework will explore additional relationship with sustainability dimension through more hypothesis testing. Acknowledgements The authors gratefully acknowledge many valuable suggestions made by the editor and anonymous referees that lead to significant improvement of this paper.

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Appendix 1. Questionnaire Section A – COOP strategy A.1 Management commitment MC concerns the degree of attitude of top management to developing relationship with competitor(s). Strongly Neither agree Strongly disagree Disagree nor disagree Agree agree 1.1. You are enthusiastic about pursuing the mission of your competitor 1.2. For the success of a relationship with your competitor, you will be completely supportive 1.3. You are intending to arrange a long-term contract (either formal or informal) with your competitor 1.4. You are intending to create or adapt the current policy according to the relationship 1.5. You are willing to create a new strategy according to the goal of the relationship 1.6. You are intending to reconfigure your internal business processes according to new business structure 1.7. You have the ability to extend existing capabilities to encompass new organisational structure 1.8. You have the ability to apply new knowledge to accomplish goal of the relationship 1.9. You are willing to share core competencies (i.e. core resources) with your competitor 1.10. You are willing to share physical resources, such as delivery vehicle, with your competitor

A.2 Relationship developments Relationship developments refer to the development of relationship between the organisation and competitors. The strong relationship between organisations could lead to the higher potential to accomplish the goals of all organisations participating in the relationship.

Strongly Neither agree Strongly disagree Disagree nor disagree Agree agree 2.1. In the relationship with your competitor, you are intending to arrange detailed standard operating procedures (e.g. rules, policies and forms) for the process of the operation consistency 2.2. To establish a relationship with your competitor, both companies must have mutual goals and objectives before the relationship establishment 2.3. In a relationship you establish with your competitor, your partner must be honest and reliable 2.4. Meeting on a weekly or monthly basis with your competitor will be arranged 2.5. You are intending to share know-how from work experience with your competitor 2.6. You are enthusiastic about accepting your competitor’s organisational culture or working environment 2.7. You are willing to accept risk, that is, unforseen events, cost and uncertainties, which are being shared by your competitors


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A.3 Communication management CM refers to the revision, implementation, monitoring and planning of communication channels between competitors to ensure effective communication and reduce conflict between parties. Strongly Neither agree Strongly disagree Disagree nor disagree Agree agree 3.1. In the relationship with your competitor, you are intending to arrange the written documents (e.g. handbooks) that spell out detailed tasks, activities and schedule for the cooperation 3.2. In the relationship you establish with your competitor, internal information must not be used for any other purposes than for the partnership 3.3. In the relationship you establish with your competitor, you are intending to monitor conflict intensity periodically 3.4. In the relationship you establish with your competitor, participants must be willing to share internal and external information 3.5. You are intending to exchange each other’s opinion with your competitor 3.6. You are intending to frequently keep informed of new development (e.g. technological application) with your competitor 3.7. You are intending to implement information technology to exchange information with your competitor

Section B – Sustainable distribution This section seeks your view on the potential benefits from improving freight movement towards sustainable distribution. Please tick a box to indicate the extent to which you AGREE or DISAGREE with the following statements. 4.0 Environmental factor 4.1 Reduce environmental risk (including reduced risk of pollution incidents) 4.2 Improve conservation of resources 4.3 Enhance ISO 14000 (International organisation for standardisation 14,000 provides tools for organisations to monitor and control their environmental impacts and improve their environmental performance) 4.4 Reduce congestion 4.5 Reduce air pollution 4.6 Reduce water pollution 4.7 Reduce visual pollution 4.8 Reduce odour pollution 4.9 Reduce noise pollution 4.10 Reduce solid waste 4.11 Reduce liquid waste 4.12 Improve recycling 4.13 Improve environmental compliance 5.0 Economic assets/ organisational performance 5.1 Improve a company’s reputation 5.2 Improve the relationship with investor 5.3 Improve the relationship with customer 5.4 Improve financial performance 5.5 Lower the risk of business operation

Strongly Neither agree Strongly disagree Disagree nor disagree Agree agree


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5.6 Stimulate the organisation’s innovation and creative work 5.7 Help to find easier ways to attract external sources of sponsorship 5.8 Broaden markets and make situations for sales increase 5.9 Lower expenditure 5.10 Improve raw material conservation 5.11 Reduce transportation cost (i.e. fuel cost) 5.12 Increase in resources usage efficiency (i.e. fuel consumption) 5.13 Improve product image towards customer 5.14 Improve market opportunities 5.15 Reduce the cost of insurance 6.0 Social factors 6.1 Increase motivation of staff 6.2 Improve health and safety of workers at the workplace 6.3 Improve trust building with local community through openness, transparency and partnership 6.4 Reduce complaints from local community 6.5 Help to attract positively motivated employees 6.6 Enhance the value of human capital 6.7 Improve the contribution of a firm to community development (i.e. job creation and tax breaks received)


Section C – About your organisation This section seeks general information about your organisation. Please ensure you complete each question. (se1) Please indicate your industry (1) (2) (3) (4)

Newspaper industry Transport industry Newsagent industry Other please specify____________ (se2) Which part of Thailand your organisation is located in?

(1) (2) (3) (4) (5) (6)

Central Thailand Northern Thailand Eastern Thailand Western Thailand Southern Thailand North-eastern Thailand (se3) Do you have your own distribution facility (i.e. delivery vehicle)?

(1) Yes (please go to question (se4)) (2) No (please go to question (se9)) (se4) Which part of Thailand your distribution centre is located in? (1) (2) (3) (4) (5) (6)

Central Thailand Northern Thailand Eastern Thailand Western Thailand Southern Thailand North-eastern Thailand (se5) Please indicate the total sales revenue per year.

(1) (2) (3) (4) (5)

Below 50 million baht Between 51 million and 100 million baht Between 101 million and 500 million baht Between 501 and 1000 million baht Above 1000 million baht


Section D – About yourself This section seeks general information about you. Please ensure you complete each question. (sf1) Your position or your current job title. (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)

CEO Executive Director Chairperson/President Co-ordinator Director Chief Distribution Officer Chief Logistics Officer Chief Marketing Officer Distribution Director Logistics Director Marketing Director Other please specify_______________________________

(sf2) How many years have you worked for this organisation? _____________ years. (sf3) Total number of years in the industry: _____________years. (sf4) What is the highest level of education you have completed? (1) (2) (3) (4) (5) (6)

Certificate Diploma Bachelor degree Graduate diploma Master’s degree Doctorate degree (sf5) Please indicate your gender.

(1) Male (2) Female (Sf6) Please specify your age range (in years). (1) (2) (3) (4) (5) (6)

18–20 21–30 31–40 41–50 51–60 60 +

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