Leadership Behaviours for Adopting Lean and Green Practices in Indonesian Logistics Firms
Nissa Syifa Puspani is a PhD student in the Department of High-tech Business and Entrepreneurship. (Co)Promotors are prof.dr. C.P.M. Wilderom and dr. D.H. van Dun from the Faculty of Behavioural, Management and Social Sciences.
Given increasingly competitive markets and negative effects of climate change, firms in various sectors commit to continuous operational improvement and innovation and, at the same, transitioning to a greener operation. To achieve those ambitions, many firms are increasingly adopting lean and green practices, i.e., management practices aimed at eliminating non-value adding work activities and improving firm performance while becoming more environmentally friendly.
While lean and green practices adoption were predominantly focused on the manufacturing sector, their adoption in the service sector, particularly in logistics, is growing. The logistics sector, which is characterized by large storage demands; extensive distribution processes; high fuel consumption; and long transportation lead times, has a great need to optimise their efficiency and reduce environmental impact. This seems particularly crucial for the Indonesian logistics sector with its high logistics cost and associated CO2 emissions. Indonesian-logistics cost reached 24% of the GDP in 2020, and the transportation’s CO2 emissions, which is core in the logistics sector, is much higher in Indonesia compared to other East-Asian and Pacific countries (30.8% compared to 12.2%).
Effectively adopting lean and green practices within a firm requires significant changes in earlier established business processes, requiring a strong involvement of employees. However, in many instances, employees tend to resist changes to their established routines, such as integrating lean and green practices in their daily work. These new practices are often negatively perceived by employees, as increasing workload and limiting flexibility, which results in increased employee stress. Thus, to facilitate the successful adoption of lean and green practices, leaders across hierarchical levels should encourage employee participation, provide the necessary resources, and create a culture of continuous improvement. However, the identification of specific leader behaviours essential for successfully implementing unified lean and green practices, particularly in Indonesian logistics firms, remain limited, leading the firms to struggle when trying to implement the much-needed lean and green practices. This struggle motivated the research for this thesis which is manifested especially by three interrelated original empirical studies.
The first study in this thesis answers the question: Which leader-behavioural factors contribute to employees’ adoption of lean and green practices in logistics and transportation firms in Indonesia? This exploratory research project collected data through interviews, meeting observations, and work-floor visits at four Indonesian logistics and transportation firms that were adopting lean and green practices, each at a different adoption stage. The results highlighted the important role and behaviours of its leaders in enabling the successful adoption of lean and green practices; after all, they define the strategic direction of the firm, its new policies, and can allocate necessary adoption resources. This first study emphasised the transformational leadership style. With this style, leaders focus on empowering employees to enable them to understand the importance of adopting lean and green practices, both for themselves as well as strategically, for the firm. As a practical example, a transformational leader regularly visits the work site to observe any problems and motivate employees by co-constructing with them the provision of (nearly) immediate solutions. Transformational leaders help employees to better understand the nature of lean and green practices as well as ease employees’ expected effort in adopting the practices. This, in turn, is proposed to lead to higher job performance and more meaningful and decent work for the employees concerned. Thus, this first study highlighted how firm leaders can be an important resource in shaping an organisational culture to start adopting lean and green ways of working.
This first study enriches leadership theory by formulating a conceptual leadership model for the specific context of lean and green practice adoption by firms. It combines transformational leadership theory with innovation adoption theories, namely, the theory of planned behaviour (TPB) and the unified theory of acceptance and use of technology (UTAUT) while also taking into account employees' behaviours in adopting lean and green practices. By incorporating actual behaviours of leaders and employees, the new model is capable of explaining how more than one leadership style may affect the successful firm adoption of lean and green practices.
The second study zoomed in on the nature of effective leaders in family-owned firms, given that they are the main players in the Indonesian logistics sector and a significant driver of the Indonesian economy. To better understand effective leaders’ behaviours in this setting over time, I used the fuller-full range leadership theory as a foundation; the leader behaviours specified by this theory are seen to effectively contribute to navigating important changes within organisations. Thus, the second thesis’ study answered the question: How do leaders’ fuller full-range of leadership behaviours facilitate employees’ adoption of lean and green practices in family-owned logistics firms? A longitudinal research design study was chosen; over the course of two years and two months, two Indonesian family-owned logistics firms were tracked, using the same mix of qualitative methods as in study 1. To facilitate employees’ adoption of lean and green practices, leaders at various hierarchical levels were found to integrate behaviours of all leadership styles of the fuller-full range leadership theory: not only the transactional one, but also the transformational and instrumental leadership styles.
The second study expands on what we know about the fuller full-range leadership theory. The findings pointed out that leaders who exhibit instrumental-style behaviours complement their initially more traditional transactional and/or transformational styles with the instrumental one, which in turn, effectively facilitated employees’ adoption of lean and green. Specific behaviours of instrumental-style leader behaviours found include 1) path-goal facilitation (i.e., improve training facilitation, provide examples, and offer clearer instructions) and 2) outcome monitoring (i.e., engage in active monitoring and assist employees to avoid mistakes). Additionally, behaviours of transformational leaders included building trust with employees, considering employees’ personal needs, encouraging the learning process, allowing employees to take ownership, and focusing on empowering employees. Moreover, behaviours of transactional leaders included providing rewards based on good performance and focusing on deviations from standards.
Given that many Indonesian logistics firms operate internationally, the third core thesis’ study elaborated on the adoption of lean and green practices in multicultural settings. Specifically, I focused on Japanese-Indonesian logistics firms where cross-cultural misunderstandings pose obstacles to lean and green practices. These misunderstandings, which may hinder the successful adoption of lean and green practices, motivated the key research question of this study: How do effective leaders’ behaviours facilitate employees’ adoption of lean and green practices in Japanese-Indonesian logistics firms? We analysed the data from another longitudinal mixed-methods study (in a little over two years) in two Japanese-Indonesian logistics firms located in Indonesia. It was shown how high-context communication and language barriers trigger differing perceptions in the realm of national-culture dimensions (especially in terms of uncertainty avoidance, power distance, and collectivism) between Japan and Indonesia. These differing perceptions among both firms’ employees led Indonesian leaders to negatively perceive the Japanese transactional leadership style in enacting lean and green practices. This resulted in Indonesian employees experiencing difficulties in applying and understanding the practices. The eventual implementation of the instrumental leadership style by local Indonesian leaders did revitalize employees' adoption of lean and green practices.
The findings of this third study suggest that only leaders’ behaviours exhibiting the instrumental leadership style can overcome issues that are typical in multicultural collaborations, which in turn facilitates employees’ intention to adopt lean and green practices. This third exploratory study pointed out that while, according to fuller full-range leadership theory, effective leaders are the ones who can exhibit all three leadership styles situationally, also the leaders within Japanese-Indonesian logistics firms must adopt the relatively new, instrumental style. The behaviours of instrumental leaders who engage in clear, mutual communication and provide examples offer employee understanding on how to specifically adopt lean and green. This, in turn, helps to reduce the level of employees’ expected effort; enhances the anticipated performance benefits in the eyes of the employees; and, consequently, increases employee willingness to adopt lean and green practices.
From a more practical point of view, this dissertation provides guidelines on how logistics leaders should adapt their behaviours in such a way that they facilitate the successful adoption of lean and green practices. The dissertation helps leaders of Indonesian logistics firms realise the importance of exhibiting a broad range of leadership behaviours, depending on the situation of their firm. At the start of a lean and green practices implementation, a transformational leadership style is advised, such as having the capabilities of listening to employees’ needs and motivating them by providing immediate solutions when difficulties arise. Especially leaders of family-owned (Asian) logistics firms may benefit from incorporating also a more transactional and instrumental leadership repertoire in addition to their transformational leadership if they wish to ensure effective lean and green practices adoption in their firms. Also, leaders within Japanese-Indonesian logistics firms are likely to benefit from developing the behaviours of leaders with an instrumental style. Such behaviours were found to emerge from leaders' proactive efforts to understand the employees' unique situations, and were found to be essential in overcoming the cross-cultural barriers, after which employees’ adoption of lean and green practices within their firms were effectuated.
