Governance in family business: Empirical study in bus transportation industry

Abstract

This study aims to provide clear explanation and answer based on the research gap of previous studies that studied about the relationship between managerial trait from family business and managerial performance. This study also investigates the phenomenon about low managerial performance that triggered low continuity of bus industry belonged to family business in Indonesia. Justification of this research is the first research about manager from family in bus transportation industry in Indonesia, considering the previous research conducted by Sudibyo (2011) related to succession of CEO leadership of Indonesian family company-according to the successor perspective and Sobirin et al., (2013) in batik industry in small scope in City of Pekalongan, Central Java. The model used for testing in this study is multivariate analyses with Structural Equation Model (SEM), which is based on AMOS program. The sample in this study is the manager that holds a position as supervisor and managerial controller of 505 persons. The number of samples is determined by proportion (%) of managers in the bus ownership industry. The questionnaires were distributed through direct distribution and by letter in June, July and August 2015. Of the distributed questionnaires, there are left 283 questionnaires. After being selected, there are 262 questionnaires that can be retested using SEM AMOS 22.0. Based on the result for 9 proposed hypotheses, there are 6 accepted hypotheses and 3 rejected ones. The accepted hypotheses are as follows: the influence of managerial trait in family business on soft governance capability which has coefficient value of 0.517 that shows positive and significant relationship since CR value is 2.705 and significant at 0.007, the influence of soft governance capability on managerial performance which has coefficient value as 0.506 that shows positive relationship since CR value is 6.183 and significant at 0.000. These results prove that soft governance capability has an ability to mediate the relationship between casualties of managerial trait variable on bus transportation industry in Jakarta, and it is significant with alpha value 5%