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Organizational transformation Determinant

of CH and
as a determinant of corporate corporate
sustainability
hospitality and its effect on
corporate sustainability
Hamidah Nayati Utami, Bambang Eka Cahyana, Umar Nimran and Received 26 April 2020
Revised 14 August 2020
Mohammad Iqbal Accepted 13 September 2020
Brawijaya University, Malang, Indonesia

Abstract
Purpose – This research was conducted with the aim of examining and explaining the effect of strategic
leadership, corporate governance, organizational culture, business infrastructure and corporate alignment as
determinants of corporate hospitality; testing and explaining the direct effects of corporate hospitality and
corporate sustainability.
Design/methodology/approach – This research used a quantitative approach with a survey method. The
research population was all subsidiaries, branches and departments in PT Pelindo 1 (Persero). The sample size
in this research was n 5 N 5 61, which covered 5 subsidiaries, 17 branches and 39 directorates at PT Pelindo 1
(Persero). Data analysis was done with inferential statistics using WarpPLS analysis using the help of
WarpPLS package computer programs.
Findings – There is a significant and positive direct effect between Strategic Leadership, Corporate Culture,
Corporate Governance, Business Infrastructure and Corporate Alignment on Corporate Hospitality which
means higher Strategic Leadership, Corporate Culture, Corporate Governance, Business Infrastructure and
Corporate Alignment will result in a higher Corporate Hospitality. The analysis also shows that there is a
significant and positive indirect effect between Strategic Leadership, Corporate Culture, Corporate
Governance, Business Infrastructure and Corporate Alignment on Corporate Sustainability through
Corporate Hospitality which means higher Strategic Leadership, Corporate Culture, Corporate Governance,
Business Infrastructure and Corporate Alignment will lead to higher Corporate Sustainability through
Corporate Hospitality.
Originality/value – The originality of this research can be proven from the lack of research on hospitality.
Some other research on hospitality, mostly doing research at airports, hospitals and hotels. However, this
research was conducted at the port, where company friendliness is a discipline that includes many marketing
studies.
Keywords Sustainable management, Organizational transformation, Hospitality, Corporate sustainainability
Paper type Research paper

Introduction
PT Pelabuhan Indonesia 1 Persero (Pelindo 1) is one of the ports in Indonesia which is located
in outer islands which make it directly adjacent to the high sea and other countries. In dealing
with market globalization, PT Pelindo 1 must improve itself by making changes from port
operator company to integrated port and logistic service corporate. Integrated port and
logistic service corporate in question include port operators, logistics providers and regional
development. This is done to improve corporate performance and ensure corporate

© Hamidah Nayati Utami, Bambang Eka Cahyana, Umar Nimran and Mohammad Iqbal. Published in
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published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, International Trade, Politics and
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p-ISSN: 2586-3932
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ITPD sustainability. In other words, with these changes, PT Pelindo 1 is expected to win the
competition in the era of market globalization.
As stated in the resource based view (RBV) theory, competitive advantage can be made if a
business organization is successful in creating strategies based on resources that are difficult
to duplicate by competitors (Barney, 1991). Such resources can take the form of “assets,
abilities, organizational processes, corporate attributes, information, and knowledge which
are controlled by the organization” (Barney, 1991, p. 101). To be a potential source of
competitive advantage, the underlying resource package must be scarce, valuable, non-
replicable and cannot be substituted. In this case, this approach is relevant in the aspect of
how business organizations have capability to effectively utilize resources. Furthermore, the
RBV theory is a discussion that becomes a crucial point and a major determinant in the
development of strategic management approaches. Thus, the context of strategic
management becomes an interesting dialogue material for study in the process of growing
and developing an organization.
Organizational transformation is one of the important studies in strategic context, especially
in developing competitive advantage. The organizational transformation context described by
Porras and Silvers (1991) begin with a condition of organizational change triggered by relevant
environmental shifts that are felt by the organization, leading to intentionally generated
responses. The intentional responses are the basis for the planned organizational change, which
consists of four identified and interrelated components, namely: (1) change intervention, (2)
important variables of organizational goals, (3) individuals as members of their organizations
and on-job behaviors that produce change and (4) organizational impacts (Porras and Silvers,
1991). In the context of organizational transformation, there are several crucial aspects that can
affect the achievement of the impacts expected by the organization. The crucial aspects include:
strategic leadership, corporate/organizational culture, corporate governance and business
infrastructure.
Leader strategies reflect the mindset of the times and become important, especially being a
problem for the evolution of sustainable governance applications. Therefore, leaders are
individuals who have the ability to influence other individuals and groups to be able to work
together to achieve their intended goals. One type of leadership context that an organization
wants to achieve is strategic leadership. Strategic leadership refers to the potential of a manager
to express a strategic vision for a company, or part of a company and to motivate and convince
others to obtain that vision. Strategic leadership can also be interpreted as utilizing strategies in
employee management. This aspect has the potential to influence organizational members in
making changes. Vera and Crossan (2004) also provide a review of the different definitions of
leadership and strategic leadership as conveyed by Hambrick and Pettigrew (2001).
Governance has a broad meaning and is often perceived as part of the disciplines such as
political science, public administration, economics and management (Grossi et al., 2015a). Grossi
et al. (2015b) also reinforced the review carried out in several definitions that apply in the context
of corporate governance that is used by researchers in this field (Shleifer and Vishny, 1997; Colley
et al., 2005; Tricker, 2012). Grossi et al. (2015b) explained that corporate governance refers to the
exercise of power over corporate entities through the mechanism of directing, controlling and
convincing stakeholders of financial sector to obtain a return on investment. In short, corporate
governance refers to a system in which corporations are directed and controlled. Therefore, it is
relevant to all forms of organizations state-owned enterprises (SOEs), family-based businesses,
cooperatives, non-profit companies. In this case, corporate governance as part and emphasis of
TO has relevance in this research due to the characteristics inherent in SOEs as a hybrid
organization as reviewed by Grossi et al. (2015b). The main characteristics of SOEs today and the
reason why they can succeed are their ability to adapt and take the form of new organizations
(Musacchio and Lazzarini, 2014). A new form of hybrid organization by combining elements from
different institutional logic (Pache and Santos, 2013).
 This research is one of the few research conducted on hospitality. Several previous Determinant
researchers have studied hospitality at the airport (Albeshr and Ahmad, 2015), and several of CH and
other researchers mostly conducted the research on hospital and hotel objects. This research
was carried out at the port, where corporate hospitality is a discipline that covers a lot of
corporate
marketing studies. For example, recorded in the time period between the 1990s and the early sustainability
2000s, this topic which has been linked to marketing studies has been widely discussed.
Articles and academic research that emerged between these periods (Luckhurst, 1996;
Chetwynd, 1998; Flack, 1999; Thatcher, 2000; Croft, 2001; Fletcher, 2001; Parker, 2001; Irwin,
2002; Bennett, 2003) are indications that the development of this concept has received
relatively little attention since the initial article was introduced by Ramsay (1990) which was
published in a “management decision” reputable journal. Looking at what has been presented
in the literature, it can be seen that in the context of corporate hospitality, it is often identified
with a corporate effort to entertain customers and employees to establish good relationships
with them, for example by holding special events and giving prizes or bonuses.
Regarding some of the needs and analysis of the existing literature conditions, this
research will focus on the context of strategic management of port business development in
Indonesia for sustainable management. Sustainability has developed into an issue that has
attracted the attention of various parties including researchers and academics (Aras and
Crowther, 2008). Sustainability has also become an important central issue and its relevance
is critical for the sustainability and economic viability of an organization (Salimath and Jones,
2011). Sustainability is a controversial topic because it will have different meanings for
different people. However, there is increasing concern for the need to discuss the meaning of
sustainability and crucially, the extent to which it can be done by the company (Aras and
Crowther, 2008).
Sustainability achievement of a company, especially in Pelindo 1, one of which is pursued
by transformation. The intended transformation includes Culture, Human Resources, and
Organization, Business, Business Processes and IT Systems. Then in this research,
transformation is placed as a concept. The concept in question is a characteristic of a broader
and more abstract research object than variable. The definition of concepts also means that in
a concept there are several variables. The purpose of this study is examining and explaining
the effect of strategic leadership, corporate governance, organizational culture, business
infrastructure and corporate alignment as determinants of corporate hospitality; testing and
explaining the direct effects of corporate hospitality and corporate sustainability.

Literature review and development of conceptual framework

Strategic leadership (X1)
Patterson (2003) stated that the theory of Servant Leadership is the development of
transformational leadership theory. In his findings, Parker and Stone (2003) stated that the
choice to focus on others is the difference between Servant Leadership and Transformational
Leadership. As a consequence, Servant Leadership is not a whole new concept or an idea that
comes along with the arrival of Christianity. Before the birth of Jesus, many ancient writers,
philosophers, historians, poetry creators and playwrights were concerned with the values,
ideas and truths embedded in the concept of Greenleaf’s Servant Leadership, such as Plato,
Sophocles and Cicero. So, in this study Strategic Leadership is used as one of the independent
variables that determine company friendliness.

Organizational culture (X2)

Kusdi (2011) stated that organizational culture is the values, beliefs, norms, rituals, symbols
and stories shared together, which form the identity of the organization, its purpose and how
ITPD to achieve it. An organization besides requiring leadership, a sense of responsibility,
commitment, cooperation and trust also requires a culture of mutual respect in running the
organization. Mutual respect is the tolerance of fellow human beings, accepting differences
between fellow human beings as a natural thing as long as it does not violate human rights
(Ardiansyah, 2013). So, in this study Organizational Culture is used as one of the independent
variables that determine company friendliness.

Corporate governance (X3)

World Bank’s explanation of corporate governance cited by the Ministry of Home Affairs
stated that corporate governance is a solid and accountable development management in line
with the principles of democracy and efficient markets, avoidance of misallocation of
investment funds, and prevention of good corruption politically and administratively,
running budget discipline and creating legal and political frameworks for the growth of
business activities. Corporate governance is the most important problem in the management
of public administration today. Intense demands made by the community to the government
to carry out good governmental accountability are in line with increasing the level of public
knowledge in addition to the effect of globalization. The emergence of corporate governance
does not only make the government an institution but also as a multi-direction process,
involving elements of policy making outside the government such as the public and the
private sector. By maximizing the role of the three elements, good governance will be realized
based on the people (Purbawangsa et al., 2019). So, in this study corporate governance is used
as one of the independent variables that determine company friendliness.

Business infrastructure (X4)

According to Grigg (2000) in Kodoatie (2005), basic structure, installation, equipment or
facility that has been built to meet the needs of the community so that the economic and social
system can run properly is an understanding of the infrastructure system. Here,
infrastructure plays an important role as a mediator between the economic and social
systems in the order of human life and the environment. This condition occurs so that the
harmonization of life is maintained in the sense that infrastructure does not lack (impact on
humans) but also not excessive without taking into account the carrying capacity of the
natural environment because it will damage nature and ultimately, it will also affect humans
and other living things. In this case, the natural environment is a supporter of infrastructure
systems, and the economic system is supported by infrastructure systems, social systems as
objects and targets supported by the economic system. So, in this study Business
Infrastructure is used as one of the independent variables that determine company
friendliness.

Corporate alignment (X5)

Corporate alignment according to Subagyo (2008) in a business feasibility study is a
feasibility study conducted to assess the feasibility of developing a business. According to
Umar (2005), a business feasibility study is a study of a business plan that does not only
analyze the feasibility of a business, but also when it is routinely operated in order to achieve
maximum profit for an unspecified time. If a leader or organization can align its future with a
leadership plan in its management and with a personal plan, everything will be an
extraordinary symbol of the organization of the future. Therefore, a leader must
communicate the mission of his organization to all parts of the organization. Mission is a
reference point, guide and source of hope in times of change. When connected with human
values, it will provide goals and meanings to those who fulfill the mission and provide
encouragement for creativity, productivity and quality in work and personal development. Determinant
So, in this study Corporate Alignment is used as one of the independent variables that of CH and
determine company friendliness.
corporate
sustainability
Corporate hospitality (Z)
Corporate hospitality as a scientific discipline that encompasses many marketing studies. This
also discusses what was conveyed by Drake (2013) which is more restrictive in the context of
event management or the hospitality sector. This is because it is used to build trust and loyalty,
establish or change customer identities and develop “word of mouth” as part of corporate
communication (CC) to maintain profitable businesses and to acquire new customers (Bennett,
2003). Relationship marketing can last a long time if there is company friendliness, that is
because friendliness can make trust and loyalty more increased, so it can shape the company’s
identity in the eyes of clients (Flack, 1999). So, in this study Corporate Hospitality is used as a
mediating variable between the independent and dependent variables.

Corporate sustainability (Y)

Corporate sustainability can be interpreted as a diversion of business strategies and activities
that meet the needs of companies and stakeholders while supporting, maintaining and
improving human and natural resources that will be needed in the future (Searcy, 2011). The
dimensions for measuring Corporate sustainability are Environmental, Social and Economic.
So, in this study Corporate Sustainability is used as the dependent variables.

Previous research
Relationship relevance between strategic leadership (X1) on corporate hospitality (Z)
Dawson et al. (2011) in their research aimed to find ways for managers to communicate
effectively with their employees. The results of this research indicated that effective non-
verbal manager communication strategies, such as a combination of gestures, demonstrating
and gesturing points, can help in manager communication with employees. Harrington and
Ottenbacher (2011) in their research examined the level of representation of strategic
management topics in hospitality academics. This research showed that researchers in
general strategic management tended to focus on applications that were lacking and focused
more on theoretical concepts about strategy, while researchers in hospitality strategic
management tended to focus their attention on tactical methods when discussing strategic
questions. Harrington et al. (2014) in his research reviewed the hospitality literature and
tourism strategy to identify trends related to the main research fields. Okumus et al. (2007) in
their research critically examined scientific studies in strategic management research in the
fields of hospitality and tourism. Sanjeev and Jauhari (2012) in their research provided an
overview of facts and trends related to the Indian hospitality industry, as well as identifying
strategic keys and financial problems that businesses have. Sok et al. (2014) in their research
discussed the impact of leadership styles on negative work-home disorders on highly
educated employees in the hospitality industry.

Relationship relevance between organizational culture (X2) on corporate hospitality (Z)

Drake (2013) in his study discussed the practice of corporate hospitality (CH) in special events
used by Australian businesses as relationship marketing techniques to engage with their
customers, investigated how marketing practitioners assess their CH programs in a business-to-
business (B2B) context, determined the main benefits and uncovered contemporary problems
faced by marketing practitioners in the operation of the CH program. IpKin and Jennifer (2014) in
their research investigated the effect of corporate social responsibility (CSR) on employee affective
ITPD commitment through the mediation of corporate culture. The results of this research indicated
that CSR to employees and CSR to customers were fully mediated by employee development,
harmony and orientation of corporate culture customers, while CSR relations to stakeholders
were only partially mediated. Jones et al. (2016) in their research discussed several personal
reflections on sustainability in the hospitality industry. Jauncey and Nadkarni (2014) in their
research highlighted and summarized the main findings of the theme issue: “Expo 2020: How are
the hospitality and tourism industries in Dubai preparing themselves?” with interesting
discussions and recommendations throughout the collection of articles to identify key success
factors related to hosting the Expo 2020 in Dubai. Kang et al. (2016) in their research examining
the effect of various national cultural dimensions on the activities of CSR of hospitality companies,
including lodging companies, casinos and restaurants.

Relationship relevance between corporate governance (X3) on corporate hospitality (Z)

Harrington et al. (2014) in their research aimed to review tourism and hospitality strategies,
identify trends related to the two objects of research. Goede (2013) in his research discussed
Transnational Organized Crime (TOC) and its relation to corporate governance in the
Caribbean. Michael and Goo (2015) reviewed the latest developments in corporate governance
in Hong Kong, to what extent government policies reduce family control in the companies.
Ntongho (2016) in his research analyzed the relationship between culture and corporate
governance. Okumus et al. (2007) in his research examined management strategies in the field
of hospitality and tourism. Ruhanen et al. (2010) explored and synthesized the literature on
corporate governance with the aim of identifying key elements of governance.

Effects of business infrastructure (X4) on corporate hospitality (Z)

Bora et al. (2015) conducted a research, in which the research was a literature review on the
evaluation of service quality to determine the level of perceived quality of customer service,
especially in evaluating customer quality. Rabbani et al. (2015) conducted a research which
reviewed the need for formal hospital management training to improve the quality of care.
Review was carried out at regional hospitals for Eastern Mediterranean Region (EMR)
countries. Reino et al. (2011) in their research explained the direct relevance of the
phenomenon of information and communication technology adopted by the rural
accommodation sector. Rao (2014) examined the competitive world between the hospitality
industry and the tourism industry.

Effects of corporate alignment (X5) on corporate hospitality (Z)

Adeola and Ezenwafor (2016) in their research aimed to advance collaboration as a solution to
problems in the Nigerian hospitality industry. Anderson et al. (2017) in his research aimed to
investigate the nature of public–private dialogue initiatives (PPD) and how PPD was used in
the tourism and hospitality sector as a tool to reform the business environment (e.g. setting
policy priorities, informing policy design, increasing legislative proposals and entering
feedback into regulation implementation). Chen et al. (2017) in his research aimed to examine
theoretical models of the dynamics of co-creation, service innovation and competitive
advantage. Sloan et al. (2014) in his research aimed to report on the initial research conducted
in seven sustainable hospitality and tourism operations that were established in developing
countries that used the principles of social entrepreneurship.

Effect of corporate hospitality (Z) on corporate sustainability (Y)

Ali (2016) investigated the effect of the quality of Malaysian public university services on
international student satisfaction, institutional image and loyalty. Crick and Spencer (2011)
discussed issues related to the quality of services in the hospitality industry. Hosseini et al. Determinant
(2015) conducted a study on the effect of hotel customer service performance on the quality of of CH and
experience and brand loyalty in Iran. Tsang et al. (2015) compared Chinese and English
literature about service quality in China. Rabbani et al. (2015) conducted research on the need
corporate
for formal hospital management training to improve the quality of care. sustainability

Methodology
In accordance with its purpose, this study is intended for explanatory research that explains
the causal relationship between variables studied through testing empirical hypotheses. The
independent variables in this study are Strategic Leadership (X1), Organizational Culture
(X2), Corporate Governance (X3), Business Infrastructure (X4), Corporate Alignment (X5).
The dependent variable is Company Sustainability (Y). Meanwhile, the Company’s
Hospitality variable becomes a mediating variable between the independent variable and
the dependent variable (See Figures 1 and 2).
This research uses a quantitative approach with a survey method. Data collection was
carried out by distributing questionnaires to selected respondents into the sample. Data
collection was carried out for two months, namely between October and December 2018. This
research was conducted at PT Pelindo 1 (Persero) Indonesia, so that the population in this
study were the leaders of subsidiaries, branches and departments. The sample used in this
study was 61, where the sample consisted of 5 subsidiaries, 17 branches and 39 directorates
from PT Pelindo 1 (Persero).
Data analysis was performed with inferential statistics using WarpPLS analysis using the
help of a WarpPLS package computer program. Next, an analysis is conducted to examine the

Strategic Leadership
(X1 )

Organizational Culture
(X2 )

Corporate Governance Corporate Hospitality Corporate Sustainability

(X3 ) (Z) (Y )

Business Infrastructure
(X4 )

Corporate Alignment Figure 1.

(X5 ) Conceptual framework
ITPD relationship between the independent variable and the dependent variable with the linearity
test analysis. Inferential analysis is used to test hypotheses with Structural Equation Modeling
(SEM). Prior to the analysis, the research instrument will be tested for validity and reliability.
The validity test of the research instrument was carried out if the total r items corrected were at
least 0.3 (Solimun et al., 2017). If the correlation of items with a total score is greater than critical
r (0.3), the research instrument is said to be valid. Then for reliability if it is done using
Cronbach’s alpha, if the value is above 0.6 then the questionnaire is reliable.
The research model is illustrated by the following chart:

Description
X1: Strategic leadership
An ability that is possessed in making others affected and in making decisions will make the
organization successful and financially stable for a long time called strategic leadership.
Strategic leadership consists of two indicators namely exploration innovation and
explorative innovation.

X2: Organizational culture

The mode of interaction shown by people is influenced by the culture of the organization.
Organizational culture consists of four indicators namely the type of organization, leadership,
unifying organization and organizational priorities.

X3: Corporate governance

Corporate governance is the mechanisms, processes and relations by which corporations are
controlled and directed. Corporate governance consists of four indicators namely
transparency, accountability, predictability and participation.

Business infrastructure (X4)

Business infrastructure is the basic facilities, structures and services upon which the rest of a
business is built. Business infrastructure consists of three indicators, namely aspects of
resources, aspects of impacts and aspects of information communication technology (ICT).

Corporate alignment (X5)

Refers to the ongoing process every company goes through to keep the elements of the
organization aligned with the organization’s strategy and goals. Corporate alignment
consists of five indicators namely strategic concept, work behavior, performance,
appreciation and motivation.

Corporate hospitality (Z)

Is the entertainment that a company offers to its most valued clients, for example by inviting
them to sporting events and providing them with food and drink. Corporate hospitality
consists of four indicators namely profitability of corporate hospitality, corporate hospitality
issues, strategic approach, satisfaction with corporate hospitality.

Corporate sustainability (Y)

Corporate sustainability is an approach aiming to create long-term stakeholder value through
the implementation of a business strategy that focuses on the ethical, social, environmental,
cultural and economic dimensions of doing business. Corporate sustainability consists of two
indicators namely general triple bottom line, specific triple bottom line.
Results and discussion Determinant
Validity and reliability tests of CH and
Before analyzing the relationship between variables, research instruments must first be
tested for validity and reliability. The validity test on the instrument is done through Pearson
corporate
correlation, that is by correlating the score of the indicator with the total score of all sustainability
indicators. If the indicator is obtained a correlation value of more than 0.3 then the indicator is
declared valid. Then, for reliability testing performed on each variable through Cronbach’s
alpha that is if the Cronbach’s alpha value is obtained more than 0.6 then the variable can be
said to be reliable. The results of validity and reliability testing are presented in Table 1.
From the results of testing the validity, obtained correlation values of more than 0.3 for all
indicator variables. So, this proves that the questionnaire is valid. Then, for the reliability test
results, Cronbach’s alpha values obtained above 0.6 for all variables. So, this proves that this
research instrument is reliable. Then, further analysis can be done.

Linearity assumption test

The third assumption test, namely linearity, was done using the Curve Fit method and
calculated with the help of SPSS software. The reference used was the principle of parsimony,
i.e. when (1) the linear model is significant, (2) the linear model is not significant, but all models

Pearson Cronbach’s Validity Reliability

Variable Indicator correlation alpha status status

Strategic Exploratory Innovation 0.533 0.733 Valid Reliable

Leadership (X1) Exploitative Innovation 0.464 Valid
Organizational Organization Type 0.316 0.693 Valid Reliable
Culture (X2) Leadership 0.454 Valid
Organization Unifier 0.599 Valid
Organization Priority 0.402 Valid
Corporate Transparency 0.511 0.755 Valid Reliable
Governance (X3) Accountability 0.523 Valid
Predictability 0.389 Valid
Participation 0.374 Valid
Business Resource Aspect 0.444 0.777 Valid Reliable
Infrastructure (X4) Impact Aspect 0.379 Valid
Information 0.421 Valid
Communication
Technology (ICT) Aspect
Corporate Strategic Concept 0.464 0.783 Valid Reliable
Alignment (X5) Work Behavior 0.466 Valid
Performance 0.511 Valid
Reward 0.403 Valid
Motivation 0.447 Valid
Corporate Advantages of Corporate 0.647 0.682 Valid Reliable
Hospitality (Z) Hospitality
Problems of Corporate 0.435 Valid
Hospitality
Strategic Approach 0.333 Valid
Satisfaction on Corporate 0.374 Valid
Hospitality
Corporate General Triple Bottom 0.563 0.820 Valid Reliable
Sustainability (Y) Line Table 1.
Specific Triple Bottom 0.538 Valid Validity and
Line reliability test
ITPD that are possible are also not significant. Model specifications used as the basis for testing
were linear, quadratic, cubic, inverse, logarithmic, power, compound, growth and exponential
models. The results of linearity test on the relationship between variables are presented
briefly in Table 2.
The table above shows the three relationships between variables (three hypotheses), all
linear models are significant, because the sig (p-value) of linear model is smaller than 0.05,
therefore the linearity assumption is fulfilled. Thus, the five relationships between variables
in this research are linear. Thus, SEM can be used.

Goodness-of-fit model
Based on R2 value, Q2 or Stone Geiser Q-square test can be calculated, namely:



Q2 ¼ 1  1  R12 1  R22
Q2 ¼ 1  ð1  0:622Þð1  0:421Þ
Q2 ¼ 0:7811 ¼ 78:11%

Based on the calculation results, it is obtained the relevance-prediction value of 0.7811. This
shows that, for 78.11% of the diversity of data can be explained by the variables in the model,
then the other 21.89% can be explained by other variables outside the model. The relevance-
prediction value obtained is large enough so that the model formed can be said to be correct.

Inner model test results

Structural models can be used to determine the relationship between one variable with
another in the study. If the p-value is less than 0.05, it indicates that there is an influence
between these variables. In SEM analysis, there are direct and indirect effects. Table 3
presents the results of the analysis for direct effects between variables. Then, the direct effect
has been presented in Table 3.
The conclusions of the results of hypothesis test of the direct effect are summarized in
Table 3 to facilitate understanding. In accordance with the empirical results, it can be

Relationship Test Result

X1 → Z 0.000 < 0.05 Linear

X2 → Z 0.000 < 0.05 Linear
X3 → Z 0.000 < 0.05 Linear
Table 2. X4 → Z 0.000 < 0.05 Linear
Linearity X5 → Z 0.000 < 0.05 Linear
assumption test Z→Y 0.000 < 0.05 Linear

No Relationship Coefficient p-value Remarks

1 Strategic Leadership (X1) on Corporate Hospitality (Z) 0.277 0.001 Significant

2 Organizational Culture (X2) on Corporate Hospitality (Z) 0.209 0.009 Significant
3 Corporate Governance (X3) on Corporate Hospitality (Z) 0.281 0.000 Significant
4 Business Infrastructure (X4) on Corporate Hospitality (Z) 0.311 0.000 Significant
Table 3. 5 Corporate Alignment (X5) on Corporate Hospitality (Z) 0.288 0.010 Significant
Direct effect test results 6 Corporate Hospitality (Z) on Corporate Sustainability (Y) 0.389 0.008 Significant
 Strategic Leadership
Determinant
(X1 ) of CH and
corporate
sustainability

Organizational Culture 0.2

77
(X2 )
0.
20
9

Corporate Governance Corporate Hospitality Corporate Sustainability

0.281 0.389
(X3 ) (Z) (Y )
1
31
0.

Business Infrastructure
88
0.2

(X4 )

Figure 2.
Corporate Alignment Structural model
(X5 ) results

concluded that there are three significant and proven hypotheses which are empirically
supported by data. Thus it can be said that all three hypotheses are accepted and all have
positive effects.
Based on Table 4, it can be seen that there are five significant and positive indirect effects
on the relationship of Strategic Leadership, Organizational Culture, Corporate Governance,
Business Infrastructure and Corporate Alignment on Corporate Sustainability through
Corporate Hospitality.

Discussion
Relationship between strategic leadership and corporate hospitality
The results of the analysis show that there is a positive and significant effect between
Strategic Leadership and Corporate Hospitality with a coefficient of 0.277, and p-value of
0.001. This means that the higher Strategic Leadership will result in higher Corporate
Hospitality. In addition, there is an indirect effect between Strategic Leadership on Corporate

Indirect effect Direct effect coefficient Indirect effect coefficient Remarks

X1 → Z → Y X1 → Z 5 0.277* Z → Y 5 0.389* 0.108 Sig

X2 → Z → Y X2 → Z 5 0.209* Z → Y 5 0.389* 0.081 Sig
X3 → Z → Y X3 → Z 5 0.281* Z → Y 5 0.389* 0.109 Sig Table 4.
X4 → Z → Y X4 → Z 5 0.311* Z → Y 5 0.389* 0.121 Sig Indirect effect test
X5 → Z → Y X5 → Z 5 0.288* Z → Y 5 0.389* 0.112 Sig results
ITPD Sustainability through Corporate Hospitality. Coefficients with positive signs mean that the
higher Strategic Leadership will influence the higher Corporate Sustainability through
Corporate Hospitality.
This research is in line with the research conducted by Dawson et al. (2011) which aimed to
find ways for managers to communicate effectively with their employees. This research was
conducted on 167 students majoring in hospitality and restaurant management with an
average age of 22 years. As many as 68% of participants in this research worked side-by-side
in the hospitality industry with 38% of Caucasians, 29% of Asians, 18% of Hispanics, 10% of
African-Americans and 5% of other races. This research used perspective-taking
manipulation techniques with participants likened to not being able to speak using the
colloquial language of the workplace. This group was measured based on performance,
quality and accuracy. The results of this research indicated that effective non-verbal manager
communication strategies, such as a combination of gestures, demonstrating and gesturing
points, could help in manager communication with employees. Managers who used this
strategy caused employees to complete their work faster. Managers who were able to speak
other languages could also behave more positively towards their group. This group also
stated that they could behave more positively towards each other when they had a leader or
manager who used two languages.
Harrington and Ottenbacher (2011) in their study examined the level of representation of
strategic management topics in hospitality academics. This research was conducted by
looking at the number and percentage of strategy-related articles published in well-known
hotel journals throughout 2005 to 2009. This research compared hotel journals with single
top business journals that focused on strategy. This research showed that researchers in
general strategic management tended to focus on applications that were lacking and focused
more on theoretical concepts about strategy, while researchers in hospitality strategic
management tended to focus their attention on tactical methods when discussing strategic
questions.
Harrington et al. (2014) in their research reviewed the hospitality literature and tourism
strategy to identify trends related to the main research fields. Previous research in the
hospitality strategy literature has been reviewed and synthesized to identify trends, gaps and
opportunities. From literature assessments from 1980 to 2013, it can be concluded that
literature follows mainstream trends by combining a theoretical perspective to a certain
degree and applying more process-based concepts to hospitality strategy research. There are
a number of challenges to fostering a future capitalistic strategy including education
infrastructure, theory development and quantity and quality of researchers in the field.
Okumus et al. (2007) in his research critically examined scientific studies in strategic
management research in the fields of hospitality and tourism. This research was conducted
through literature review based on three dimensions, namely the intellectual, conceptual and
social structure of strategic management research. This research found that based on these
three dimensions, strategic management in the field of hospitality and tourism showed a
discursive structure.
Sanjeev and Jauhari (2012) in their research provided an overview of facts and trends
related to the Indian hospitality industry, as well as identified strategic keys and financial
problems that businesses have. This research was carried out by drawing on facts and trends
that emerged from various official reports and compiling key issues as highlighted by
contributors to related theme issues. This research found that some of the main areas that
emerged from the extended period of inflation were risk management, cost management, land
management and policy, revenue management, growth challenges and innovative practices.
Tromp and Blomme (2014) in their research found that an autocratic leadership style,
overtime work and lack of work-home settings contributed significantly to the negative
disruption of work-home employee.
Top of Form Bottom of Form Top of Form Determinant
Bottom of Form of CH and
Relationship between organizational culture and corporate hospitality. The results of the
analysis show that there is a significant effect between Corporate Culture on Corporate
corporate
Hospitality, which is shown by the coefficient value of 0.209 and p-value of 0.009. This means sustainability
that the higher the Corporate Culture will result in higher Corporate Hospitality. In addition,
there is an indirect effect between Corporate Culture on Corporate Sustainability through
Corporate Hospitality. Positive coefficient means that the higher the Corporate Culture will
affect the higher Corporate Sustainability through Corporate Hospitality.
This research is in line with the research conducted by Drake (2013) in his study, which
discussed the practice of corporate hospitality (CH) in special events used by Australian
businesses as relationship marketing techniques to engage with their customers,
investigated how marketing practitioners assessed their CH programs in a business-to-
business (B2B) context and determined the main benefits and uncovered contemporary
problems faced by marketing practitioners in the operation of the CH program.
Jones et al. (2016) in their research discussed several personal reflections on sustainability
in the hospitality industry. In general, the researchers suggested three fundamental issues
regarding the issues currently facing the industry, namely, determining sustainability in the
industry, materiality and independent external guarantees and sustainable consumption and
industry commitment to sustainable economic growth.
Kang et al. (2016) in their research found a positive and significant effect of uncertainty
avoidance on the total CSR value. Furthermore, the results of the study indicated a positive
and significant effect of the distance of power both on positive and negative CSR values, while
the distance of power in total CSR had no significant effect. Individualism had a negative and
significant effect on both positive and negative CSR values. Masculinity had a negative and
significant effect on positive CSR values.
Malhotra and Venkatesh (2009) in their research evaluated and suggested guidelines for
developing crisis management plans in the pre-crisis period. This could have a significant
effect on the growth of the company, industry and economy. Based on a crisis management
literature review, key issues have been identified, a lack of planning before the crisis has been
witnessed and then the existing models have been adjusted to be used in a generic format to
prepare contingency plans. The results of this research resulted in an analysis of various
problems related to the readiness to overcome different crises, types and stages of crisis, the
relative impact of these negative events on the hotel and tourism industry, the gaps found in
crisis management strategies and lessons learned.
Murray et al. (2017) explored the challenges faced by the hospitality and tourism industry
in managing the employment challenges faced today and will be faced in the coming years.
This paper referred to insights from three industry members and two academics to explore
key areas where action can be taken to address the challenges of labor demand in the field of
hospitality and tourism employment. Canadian hospitality and tourism industry faced a
growing demand for labor. Industry members can deal with this in various fields, from
satisfaction of frontline employees to other regional and national advocacy efforts. This
research recommended the industry to do a combination of activities.
Top of Form Bottom of relationship between corporate governance and corporate
hospitality. The results of the analysis show that there is a positive significant effect between
Corporate Governance on Corporate Hospitality with a coefficient of 0.281 and p-value of
0.000. This means that the higher the Corporate Governance will result in the higher
Corporate Hospitality. In addition, there is an indirect effect between Corporate Governance
on Corporate Sustainability through Corporate Hospitality. The coefficient with positive sign
means that the higher the Corporate Governance will affect the higher Corporate
Sustainability through Corporate Hospitality.
ITPD This research is in line with research conducted by Harrington et al. (2014) which aimed to
review tourism and hospitality strategies, identify trends related to the two objects of
research. Hotel strategy research continuously enhances and broadens the limits of thought
that exist in the hospitality literature. Previous literature, from 1980 to 2013, it seems clear
that it still follows mainstream trends where it combines theoretical perspectives and also
applies process-based concepts. There are several challenges to pushing the hotel strategy
forward, including education infrastructure, theory development and quantity and the
quality of researchers in the field.
Goede (2013) in this research discussed Transnational Organized Crime (TOC) and its
relation to corporate governance in the Caribbean. Based on this research, it can be seen that
the effect of the TOC on governance in the Caribbean was very worrying.
Michael and Goo (2015) reviewed the latest developments in corporate governance in
Hong Kong, to what extent government policies reduced family control in the companies. The
researcher used a comparative corporate governance approach which showed various
corporate governance theories of companies in Hong Kong. The researcher found that in
Hong Kong companies, excessive executive compensation, weak accounting and auditing did
not cause the same problems as in other countries.
Ntongho (2016) in his research analyzed the relationship between culture and corporate
governance. In particular, this research has increased the impact of culture in
inhibiting corporate governance convergence. Overall, this paper provided an
assessment of corporate governance laws in oriented countries. To determine the
effect of culture in corporate governance convergence, the researchers used historical
trends in analyzing changes in corporate governance policies in six countries (covering
three continents) and in forming corporate governance models oriented to stakeholders.
This research showed nominal changes in regulations and corporate governance
ideologies, this was because the countries still turn to designing corporate governance
rules around their cultural philosophy. This research also revealed weak political
researcher for the convergence of market forces.
Okumus et al. (2007) examined management strategies in the field of hospitality and
tourism. This research was conducted through a literature review approach based on three
dimensions: intellectual, conceptual and social structure of management strategy research.
Based on these three components, management strategies in the field of hospitality and
tourism showed a discursive structure.
Ruhanen et al. (2010) explored and synthesized the literature on corporate governance
with the aim of identifying key elements of governance. The main objective of this research
was to identify the main elements and factors that have been applied in corporate governance
studies so far. A review of 53 research on corporate governance identified 40 dimensions of
governance separately. From this review, it was known that the six dimensions of corporate
governance that were most often included were: accountability, transparency, involvement,
structure, effectiveness and power.
Top of Form Bottom of Form Relationship between business infrastructure and corporate
hospitality. The analysis shows that there is a positive significant effect between Business
Infrastructure on Corporate Hospitality with a coefficient of 0.311 and a p-value of 0.000. This
means that the higher the Business Infrastructure will result in the higher Corporate
Hospitality. In addition, there is an indirect effect between Business Infrastructure on
Corporate Sustainability through Corporate Hospitality. The coefficient with positive sign
means that the higher the Business Infrastructure will affect the higher Corporate
Sustainability through Corporate Hospitality.
This research is in line with the research of Bora et al. (2015) which is a literature review on
the evaluation of service quality to determine the level of perceived quality of customer
service, especially in evaluating customer quality. Analysis in this research used multivariate
variance to examine significant differences between stakeholder perceptions of service Determinant
quality, using a sample of 845 hotels (customers, employees and managers). The findings of CH and
showed that based on employee perceptions, service performance was at a high level, while
customers felt service performance was still at a low level.
corporate
Rabbani et al. (2015) reviewed the need for formal hospital management training to sustainability
improve the quality of care. Review was carried out at regional hospitals for Eastern
Mediterranean Region (EMR) countries. The majority of patients in the EMR went through or
ignored primary health care facilities because of inadequate quality of service and preferred
to seek special care at the tertiary level. Training such as disaster management, utilization of
health management information systems, support services, biomedical engineering,
transportation and waste management would help prepare health care professionals with
leadership skills to provide quality hospital services.
Reino et al. (2011) explained the direct relevance of the phenomenon of information and
communication technology adopted by the rural accommodation sector. The purpose of this
research was to examine differences in the level of technology adoption between companies
between rural and urban companies in a major tourist destination in Scotland. The method used
in this research was the survey method and the results showed that the difference in the level of
technology adoption was divided into two, namely a system that required infrastructure and
applications in particular sectors. This research showed that between growth theory and
neoclassical theory both contradicted each other, but complementarily both explained the
different levels of adoption between rural and urban enterprise arrangements.
Rao (2014) examined the competitive world between the hospitality industry and the
tourism industry. It was important that achieving a professional career required skills in
developing a business foundation and good customer service. There were several main
themes to promote the hospitality and tourism industry, namely international tourism
planning, hotel development and operation, planning and engineering issues, service
improvement, finance and performance and management psychology. The objective of this
research was to identify, analyze and record the future trends that have been carried out now
related to hospitality and the tourism sector. This kind of study will really help to identify
progress and some gaps in this field, thus helping to build tourism research that is more
efficient, effective and accountable to support practical work.
Sharma (2016) as assumed by the health ecology model, improving nutrition and physical
activity in the workplace can facilitate healthy food intake and physical activity patterns of
employees, so that in this research a cross-sectional study was carried out to describe current
policies and practices targeted. In assessing policy, this research used survey methods as an
environmental assessment tool and observation tool. The results of this research indicated
there were deficiencies in policies and practices, including a lack of policies that supported
physical employees, no healthy catering or healthy meeting policies, at least subsidize
healthy food and beverage choices and a few food sales services that promote health. In active
hospitals, staff health was consistently better in implementing policies and practices in
supporting healthy food and physical activity.
Yeoman et al. (2013) described New Zealand tourism in the future based on the philosophy
of sustainability and cultural identity in response to the current Tourism Strategy of 2025.
New Zealand Wonderland Scenario described a future based on an international reputation
based on environmentalism that was driven by good governance, climate change targets and
ecotourism.
Top of Form Bottom of form relationship between corporate alignment and corporate
hospitality. The results of the analysis show that there is a significant positive effect between
Corporate Alignment on Corporate Hospitality with a coefficient of 0.288 and a p-value of
0.010. This means that the higher the Corporate Alignment will result in higher Corporate
Hospitality. In addition, there is an indirect effect between Corporate Alignment on Corporate
ITPD Sustainability through Corporate Hospitality. The coefficient with positive sign means that
the higher the Corporate Alignment will affect the higher Corporate Sustainability through
Corporate Hospitality.
This research is in line with the research conducted by Adeola and Ezenwafor (2016)
which aimed at advancing collaboration as a solution to problems in the Nigerian hospitality
industry. The results of this research indicated that the operating environment of the
hospitality sector in Nigeria had an effect on the supply of skills and financial performance of
restaurants and similar hospitality businesses, while to improve overall industry
performance, private–public partnerships between government agencies, hospitality
colleges and hospitality businesses, strategic partnerships between expert hospitality
institutions and business schools, collaboration between hotel business owners and improved
managerial practices can be a strategic step for industrial operations under the heavy
institutional constraints typical of Nigeria.
Based on study conducted by Sloan et al. (2014) conclude that the positive effects of hiring
indigenous people on these projects were far greater than some negative aspects. Job
opportunities that led to an increase in living standards have resulted in each case. Local
cultural traditions have been maintained and only in a few cases were examples of the
negative effects of tourism reported.
Strobl and Kronenberg (2016) in their research aimed to provide a detailed understanding
of the dynamics of entrepreneurial networks throughout the life cycle of a hospitality
company. The results of this research indicated the hospitality business network was shifting
from local relations to industry groups specifically to local and non-local ties to groups of
actors within and outside the industry. Throughout the life cycle of company, entrepreneurs
preferred strong bonds. The transition from one generation of family to the next and changes
in a competitive environment were important triggers of network configuration.
Relationship between corporate hospitality and corporate sustainability. The results of the
analysis show that there is a positive significant effect between Corporate Hospitality on
Corporate Sustainability with a coefficient of 0.389 and p-value of 0.008. This means that the
higher the Corporate Hospitality will result in higher Corporate Sustainability.
This research is in line with the research of Ali (2016) which investigated the effect of the
quality of Malaysian public university services on international student satisfaction,
institutional image and loyalty. The results of the study showed that the quality of education
services influenced students’ satisfaction which can also affect the institutional image and
student loyalty.
Crick and Spencer (2011) discussed issues related to the quality of services in the hospitality
industry. Companies found out about customer satisfaction with their services, reflecting the
intention of a company to meet consumer needs. This detailed monitoring approach referred to
as the “QFD flow process” allowed companies to adjust consumer needs to every aspect of
operations and increase the likelihood that what was provided was the satisfaction expected by
consumers. Companies needed to measure consumer expectations at each stage to create
services that exceeded consumers’ expectations to compete with other companies.
Hosseini et al. (2015) conducted a research on the effect of hotel customer service
performance on the quality of experience and brand loyalty in Iran. Direct experience of
service performance in the hotel industry consisted of three main components, namely
interaction with hotel and customer employees, service environment, and service outcomes.
In this research, it was found that direct and indirect experience of service performance
contributed to the formation of brand image and brand loyalty.
Based on research from Rabbani et al. (2015) concluded that hospital management
capacity must be improved by conducting formal training programs in order to improve the
performance of health service delivery and the overall health system. From the training will
be able to improve health care professionals, so that the services provided are of high quality.
 In increasing customer satisfaction and loyalty to their store, most owners will run a Determinant
loyalty program. Research conducted by Zakaria et al. (2014) have found that loyalty of CH and
programs and customer satisfaction are proven to have a relationship. Thus, this shows that
the presence of loyalty programs such as prizes has proven effects on customer loyalty and
corporate
satisfaction. sustainability

Conclusion
The conclusions obtained from the results of the analysis that has been done namely,there is a
significant and positive direct effect between Strategic Leadership, Corporate Culture,
Corporate Governance, Business Infrastructure, and Corporate Alignment on Corporate
Hospitality which means higher Strategic Leadership, Corporate Culture, Corporate
Governance, Business Infrastructure, and Corporate Alignment will result in a higher
Corporate Hospitality. The analysis also shows that there is a significant and positive indirect
effect between Strategic Leadership, Corporate Culture, Corporate Governance, Business
Infrastructure and Corporate Alignment on Corporate Sustainability through Corporate
Hospitality which means higher Strategic Leadership, Corporate Culture, Corporate
Governance, Business Infrastructure and Corporate Alignment will lead to higher
Corporate Sustainability through Corporate Hospitality.
This research has limitation, namely it only examined the variables of Strategic
Leadership, Corporate Culture, Corporate Governance, Business Infrastructure, Corporate
Alignment and Corporate Hospitality. It is hoped that the concept of corporate hospitality can
be developed in a more strategic context where corporate hospitality in a narrow sense is
often associated with discussions in tourism literature, event management and service
industry. In addition, it is hoped that further research can develop the concept and context of
corporate hospitality that has more holistic relevance than the current definition.
Besides companies, hospitality behavior is also needed by PT Pelindo 1 (Persero) to
determine company sustainability, through Strategic Leadership, Corporate Culture,
Corporate Governance, Business Infrastructure and Corporate Alignment. Thus, the port
business in Indonesia for sustainable management can be further developed. It is expected
that the results of this research can be a source of information for designing company
strategies and policies in order to encourage business growth and realize company
sustainability at PT Pelindo 1 (Persero).

Recommendation
The recommendations for PT Pelindo are as follows: Improving the sustainability of the
company can be pursued through the priority of enhancing strategic leadership, through the
development of explorative and exploitative innovations. Hospitality and corporate
reputation are variables that play an important role in enhancing the sustainability of the
company with the priority of increasing strategic leadership.

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Corresponding author
Hamidah Nayati Utami can be contacted at: hamidah.ub.fia@gmail.com

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