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Effect of Forest Management System FSC, PEFC, ISO 38200:2018 on Business

Competitiveness in Paper Industries: Evidence from Java Island, Indonesia

Preprint · January 2020

DOI: 10.13140/RG.2.2.15119.53920

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 Effect of Forest Management System FSC, PEFC, ISO 38200:2018
on Business Competitiveness in Paper Industries: Evidence from
Java Island, Indonesia
Agus Purwanto1, Priyono Budi Santoso2, Arman Hj. Ahmad3*, Masduki Asbari4,
Innocentius Bernarto5
1, 2, 4, 5
Faculty of Post Graduate Studies, Pelita Harapan University, Indonesia
3
Department of Marketing, Universiti Kuala Lumpur Business School, Malaysia
3
School of Management, Asia e University, Malaysia

agozpor@gmail.com, Priyono@gt-tires.com, arman@unikl.edu.my*,

Kangmasduki.ssi@gmail.com, bernarto227@gmail.com

ABSTRACT

Sustainable business is the dream of every organization and industry. In order to sustain,
organization and industry has to well performed and competitive. Pioneer industry such as timber
and paper are also aims for the same. Forest Stewardship Council (FSC), Program for the
Endorsement of Forest Certification (PEFC) and ISO 38200 are crucial in paper industries as they
are the contributor to the world’s paper industry sustainability. Nevertheless, the research on the
real effects and influences of these contributors towards the success of Indonesian paper industries
is remain insufficient. The motivation behind this study was to determine the effect of Forest
Management FSC Chain of Custody, PEFC Sustainable Forest Management and ISO 38200 Chain
of Custody of wood and wood-based products towards the business performance of paper
industries in Java Island, Indonesia. This research was conducted among several paper processing
companies or those which use wood as main raw material in Java Island Indonesia. 372
respondents. The respondents are employee of paper industries as top management, manager and
staff that have plan or have implement FSC, PEFC and ISO 38200. The research motivation is
due to inadequate of research on PEFC, FSC and ISO 38200 implementation particularly in Paper
Industries in Indonesia. The data collection was carried out by electronic questionnaire
distribution to 372 workers in the industry between August 2019 to November 2019. Data collected
was analyzed using Structural Equation Model (SEM) and Linear Structural Model (LISREL)
version 8.70. The results of analyses showed that FSC Chain of Custody, PEFC Sustainable Forest
Management and ISO 38200 Chain of custody of wood and wood-based are significant and
positively influenced business competitiveness which resulted to the increase of customer
satisfaction index., growth of sales and increase of market share. This paper is significant as it
outlined the importance and the needs of paper industry in Java, Indonesia and others alike to
implement the FSC, PEFC and ISO 38200 in order to achieve business sustainability.

Keywords: business competitiveness, forest industries, FSC, Java, Indonesia, ISO 38200, PEFC
JEL Code: L730, L250, M110, Q230
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