1. Issues in Social and Environmental AccountingVol. 4, No. 2 December 2010Pp 168-185 The Effect of Service Delivery Performance and Corporate Social Responsibility onInstitutional Image and Competitive Advantage and its Implication on Customer Trust (A Survey of Private Hospitals in Solo Raya) Yadi Purwanto Faculty of Psychology and Social Sciences Muhammadiyah University Surakarta, IndonesiaAbstractThis paper investigates private hospitals performance measured by service delivery, corporatesocial responsibility, institutional image and competitive advantage with the effect towardscustomer trust. The data was collected from 420 patients from 21 private hospitals in Solo Rayaincluding Solo city, and 6 regencies: Boyolali, Klaten, Sukoharjo, Wonogiri, Karanganyar, andSragen. This study indicates that service delivery performance and corporate social responsibil-ity is lesser and lower than patients hope for. Private hospitals in Solo Raya do not yet valueimage, competitive advantage, and customer trust. Service delivery performance and corporatesocial responsibility have positive effects towards institutional image and competitive advan-tage. Institutional image and competitive advantage have reciprocal effects. The effect of ser-vice delivery performance towards customer trust, but corporate social responsibility do nothave direct effect towards customer trust. From suggested finding result that private hospitalrepairs service delivery performance, physical facilities, also personnel contact performance toincrease corporate social responsibility, to increase institutional image and competitive advan-tage to increase customer trust.Keywords: service delivery performance, physical support, contact personnel, private hospi-tal, corporate social responsibility, institutional image, competitive advantage, customer trust,patient trust.Introduction planned in the program Healthy Indone- sia 2010 (Kepmen 1202/Menkes/SK/Health is a prerequisite for the quality of VIII/2003). To support the program ithuman resources, which is one of The was required the participation of society,Millennium Development Goals targets including private hospitals.in 2015 (UNDP, 2007) and has beenYadi Purwanto is Senior Lecturer of Philosophy of Science, Advanced Statistics, Professional Ethics, Industrial and Organisational Psychol-ogy at Master of Psychology Program, Graduate Studies, Muhammadiyah University Surakarta, Indonesia, email: firstname.lastname@example.org
2. Y. Purwanto / Issues in Social and Environmental Accounting 2 (2010) 168-185 169The highest growth of private hospitals not only satisfying (superior satisfaction)in Indonesia for the period 1989-2000 but more superior than its competitorsand 2000-2005 are in Central Java and (superior customer value). When cus-East Java, which are 43.1% and 44% tomers do not get superior value, then it(Department of Health Ministry, 2006). will tend to lose trust in the institution ofWhile the largest number of hospitals is the hospital. A poor hospital image canin Central Java (172 units), so it has the trigger low patient trust. Trust is builtlargest number of private hospitals (72 from the performance of it’s services,units). institutional commitment to run a busi- ness vision and corporate social respon-Whereas the Solo Raya is an area with sibility consistently and creating a goodthe highest hospital growth in Central image of the institution so that bear to aJava, but the rate of its BOR (Bed Occu- superior satisfaction than its competi-pation Rate) is average 49.1% (much tors. If the service delivery performance,lower than ideal BOR which is 65%). corporate social responsibility activitiesOn the other hand every year 75 thou- and institutional image cannot produce asand patients go to Malaysia for having competitive advantage of the hospitaltreatment which more than 19 000 peo- continuously, the hospital will be diffi-ple came from Central Java, and 9000 of cult to maintain and enhance the patientthem came from the great Solo Raya. trust. If this condition is continued, it strongly suspected will lead to loss ofFacts of the low of BOR, high number customer loyalty and long-term profit.of who take medical treatment abroad, Therefore, to increase patient trustand pre survey outcome show low point through competitive advantage and insti-at indicator which indicates the low trust tutional image is by increasing serviceof patients to the private hospital. delivery performance and corporate so- cial responsibility so that the hospitalsHospitals need to continually build con- are able to expected to maintain the trustfidence in the patient through the means and profits in the long term.of satisfying patients and providing bet-ter services value than the competitors.Through competition strategy the com- Literature Reviewpanies will continue to maintain its supe-rior position, as the nature of competi- Sustainability of private hosipital dependtion can lead to creativity and efficiency on long term profit. The profit can bewhich in turn benefit the patient. Hospi- maintained if costumer takes satisfactiontal as part of the community, it has a of service. James J. Zeboga and Claysocial responsibility (CSR, corporate (2006) found that customer trust andsocial responsibility). Kotler and Lee satisfaction effect on repurchase inten-(2005) state that CSR is commitment to tion.improving the welfare of societiesthrough the means of professional busi- Trust is the belief that service providersness practices and resource utilization. can be trusted, reliable and able to fulfillIn the highly competitive advantages, his promise. Trust is also a result of thethe private hospitals are required to be overall performance of service provid-able to deliver value to a patient that is ers, social and ethical behavior, image
3. 170 Y. Purwanto / Issues in Social and Environmental Accounting 2 (2010) 168-185and ability to satisfy customers (functional and emotional, such as prod-(Shamdasani & Balakhrisna, 2000; Dav- uct, service, prestige and psychological)enport, 2007; Barnes, 2003; Gao, 2005) are perceived by the cost (money, time, effort, and psychological) to be paid byMeanwhile, hospital service delivery the customer. Customers will compareperformance is the result of the overall with any other value providers, in thesystem of services operation, which con- gradation value of the inferior to supe-sists of components which are visible rior. (Kotler, 2009; Bowen & Maken,and not visible by the customer. Visible 2006; Zeithaml & Bitner, 2006; Cra-service operations consist of contact per- vens & Piercy, 2009; Best 2009).sonnel and physical facilities. The com-ponents are the elements those also ap- In accordance with the opinion of Kotlerplied in the marketing mix that formed (2009), the clients of hospitals basicallyan integral whole and the services deliv- carry out a business information search,ered to the patient (Lovelock & Wright, the process of evaluating the options,2005; Kotler, 2009; Nguyen & Lebanc, make choices and assessing each hospi-2002). tal service performance, either based on his own experience, or the others, andBut not only the service delivery per- also including the impression gainedformance determine patients to choose from a series of marketing activities,health services, however hospital institu- relationships with patients, governmenttion is part of the environment, because and society and how the hospital pre-it is part of social capital. The company sents itself as a whole in the minds of hishas social responsibility. The role of so- patients, including a willingness of thecial accountability is expected to re- hospital in doing its corporate social re-spond to their social environment as a sponsibility.manifestation of sensitivity and concernfor the business entity to the community. The hospitals success in providing ser-(Kotler & Lee, 2005; Carol 1996; vices depend on how much the patientBranco & Rodrigues, 2006). Factor that believes or believe the chosen hospitalis not less important is the consideration capable of providing satisfaction andof patient to hospital image of its role in superior value compared to other hospi-the welfare of society and its contribu- tals. Customer trust is a development oftion in community development. In their past experiences and the perceived ac-mind, image and competitive advantage tion, corporate image and character, andin providing the best service becomes an willingness to bear the risk due to theimportant consideration (Kotler, 2009; choice, the feeling to be safe and confi-Nguyen & Leblanc, 2002, Foley & Ken- dent on the companys services (Barnes,drik, 2006). Private hospitals can be 2006).viewed as a company that requires acompetitive advantage. Competitive ad- Customers always assess whether ser-vantage is created through its ability to vice providers can be trusted or reliedprovide superior customer value, namely upon in fulfilling his promiseits ability to provide the highest satisfac- (Sirdeshmuhk et al, 2002). Therefore thetion than its competitors. Customer company must maintain its image and novalue is the ratio between the benefits image without profitability, accountabil-
4. Y. Purwanto / Issues in Social and Environmental Accounting 2 (2010) 168-185 171ity and sustainability efforts (Wreden, and a touch of excellence personnel such2005). Customers are the source of as doctors, and paramedics. Both are theprofit, in other words between service determinants of service delivery per-providers and customers must have con- formance that directly deliver qualityfidence; without confidence customers service itself. Stamatis (1996) stated ser-are not likely to be faithful (loyal). Trust vice quality is a commitment to realizeis the belief of a party concerning the the customer-oriented concept by estab-purpose and behavior of other parties lishing a service performance standards,(Kreitner and Kenicki, 2001). Trust is a measure performance, set benchmarks,mental construct as a mediator of satis- identify and provide examples of behav-faction with customer loyalty (Bloemer ior and maintain customer attractivenesset al, 2002). at all times in an effort to increase sales. Kotler (2009) stated that service deliveryHospitals need to continue building trust is the main way of differentiating a ser-through the efforts of satisfying patients vice company. Kotler (2009) also as-and providing better value of services serted that the inanimate environmentthan its competitors. Through the com- and contact personnel effect on customerpanys competitive strategy will continue satisfaction. The quality of services isto maintain its superior position, as the not based on perceptions of the servicenature of competition can lead to crea- providers point of view, but based ontivity and efficiency which in turn also customer perception. The quality beginsbenefit the patient. Hospitals are part of with customer needs and ends on thethe communit, so they have a social re- perception of customers (Kotler, 2009).sponsibility (CSR, corporate social re- Quality service is also the main ingredi-sponsibility). Kotler and Lee (2005:3-5) ent in the formation of associations orstated that CSR is committed to improv- the image of the companys reputation,ing the welfare of surrounding commu- as suggested by Aaker and Kellernities through the efforts of professional (1990), the image or reputation can bebusiness practices and resource utiliza- defined as an assessment of the qualitytion. A healthy company would not associated with the name. Nguyen andnegatively impact the community in the Leblanc (2002) concluded the positiveform of destruction of nature, environ- effects of physical support and contactment and social development, otherwise personnel of the corporate image.the company can give each other a posi-tive contribution to the society as nearest Public awareness of the importance ofpatient. CSR was also increasing willingness of people to buy and accept higher prices,Hospital with its service may shows its as demonstrated CSR survey conductedexistence in competition, because the by Deka Research and Global Marketquality of service is a way to be per- Scan International (2006) on 1,000 re-ceived by customers as well as a meas- spondents in five major cities: Jakarta,ure of how well the level of service pro- Bandung, Semarang, Surabaya andvided in accordance with customer ex- Medan claimed 73.7% of respondentspectations (Bouman and Wiele, 1992). agreed to pay 10% more expensive forQuality of service is the performance of the products produced by socially andtechnical operation and physical support environmentally responsible living
5. 172 Y. Purwanto / Issues in Social and Environmental Accounting 2 (2010) 168-185(Marketing, 05/VII/Mei/2006, p.11-12). progressive countries which have high social trust, there is a strong social capi-The hospital is a social entity and part of tal so that strengthen competitivenesssocial capital. The company should ob- (Nation Competitive Advantage).serve its social environment, among oth-ers, the community, consumers, workers, Relation to CSR in health service institu-governments and other parties which tions with competitiveness, was de-become the supporters of the company scribed by Wineberg and Rudolph (Infooperational because the company runs Askes, 2006:31,32) "Corporate socialthe business activities by accessing their responsibility program makes a com-social environment. The term is often pany more competitive." Companies thatcalled corporate social responsibility. are able to apply CSR, basically showedKotler (2005) says: corporate governance, which is manage- ment system based with internal-external "Corporate social responsibility is focus value-based. The concept of CSR a commitment to improve commu- has overlap with the concept of corpo- nity well being through discretion- rate governance (CG), and business ary business practices and contri- ethic. According Wineberg and Rudolph butions of corporate resources… (Info Askes, 2006:32) CSR is more Corporate social responsibility as a based on the values (value-based) and its business commitment contributes focus to external stakeholders, while not to sustainable economic develop- neglecting the internal stakeholders. ment, working with employees, CSR can help the company to show obe- their families, the local commu- dience to the law and also can keep the nity ,and society at large to im- company from a variety of risks law- prove on their quality of life ... suits, lost business or lost a partner risks "Corporate social responsibility as to corporate image (brand risk). a business operating in a manner that meets or exceeds the ethical, Company reputation can become a so- legal, commercial, and public ex- cial capital, because of the popularity of pectations that society has of busi- a company will also raise the image of a ness". region, the image of a region will also raise the corporate image. In this condi-The word "social" in corporate social tion, Galbreath (2005: 981-982) sug-responsibility refers to the notion of gested the reputational asset can be the"social capital" (Branco and Rodrigues, part of the intangible assets.2006: 119). By the form of powerfulsocial capital, it will bring the impact on According to Polonsky and Jevonscompetitive advantage in surrounding (2006), CSR activities is required in or-communities and also in the elements of der to build "a socially responsiblethe community, including the company. brand" and to prevent reputation dam-Fukuyama (2002) states that a sense of age. This statement is reinforced by thetrust and mutual trust (social trust) deter- results of research Yoon; Gurhan-Canlimine the ability of a nation to build com- and Schwarz (2006) that CSR is usefulmunities and institutions in it, in order to to rebuild a company which has a badachieve progress and competitiveness. In reputation. Chen, Lai and Wen (2006)
6. Y. Purwanto / Issues in Social and Environmental Accounting 2 (2010) 168-185 173examines the influence of the "Green trend since the 1990s, such as the BETInnovation Performance" toward the (The Business Enterprise Trust) Award,corporate advantages in Taiwan, and the as was reported by Trevino and Kathe-result is the green innovation efforts can rine (1999), the BET Awards are givenkeep the sustainability of the companys to companies that gave birth to an activ-products, because it is considered to ity or product CSR-oriented and philan-have a competitive advantage and can thropic projects that have the "courage,gain the trust from the consumers. Com- integrity and social vision." CSR activi-petitive advantage has superiority over ties with many variety to enhance thecompetitors by delivering the greater company image. The companys reputa-customer value. (Keegan and Green, tion is not only determined by the fame2008; Best, 2009). Positive image is the of products and the service itself, butdeterminant of competitive advantage also because the public perception ofand can increase the customer trust. ethical standards in business, one ofThompson Teo and Liu (2007; Flavian, which is business ethics in the form ofGuinaliu and Torres, 2005) shows that social responsibility. CSR can be viewedthere is significant influence of the im- as a form of nonverbal communicationage or reputation of customer trust. companies in establishing a system for communication with the outside world.The traditional view to build competitive In fact, CSR can be a means of formaladvantage is focused on build a posi- and informal communications for thetional superiority (Porter, 2003) which is company to the surrounding community.based on the competition, which in- Formal communication is communica-cludes to the cost leadership or differen- tion through mass media such as presstiating. Each type of competitive advan- releases in newspapers, radio and televi-tage can build a relationship to the mar- sion and other advertising, whereas in-ket or focus on target segments. The re- formal communication is more of "Thelation with the competitive advantage Grapevine" which is rather to describebased on cost leadership. Wegmiller what was happening, and what can be(2006:29-33) stated that although finan- felt directly. Trevino and Katherinecial stability is important at the not-for- (1999) adds that the informal communi-profit oriented hospital but it is more cation can become news, rumors, im-important to enlarge the public trust pression or perceptions, which in somewithout leaving the community benefits degree directly to enhance the credibilityfor the surrounding community as well of the company.as improving their whole image. Patients in the selection of the hospitalIn addition to the delivery of services, will consider bids that provide the high-hospitals also need to develop communi- est value. They want maximum value,cation with the surrounding community, with minimal cost, both monetary, time,however institutions may not be able to energy and physical cost. Kotler (2009)live safely, comfortably and prospec- stated the value of customers is the dif-tively in the future if these institutions ference or ratio of total customer benefitdo not build mutual relationships with and total customer cost. Total customerthe surrounding environment. Especially benefits is a set of benefits perceived bythis social vision has become a global customers of certain products and ser-
7. 174 Y. Purwanto / Issues in Social and Environmental Accounting 2 (2010) 168-185vices. Total customer cost is a set fee izational behavior, such as businessthat was sacrificed by the customer to name, architecture, variety of productsevaluate, acquire, use, and dispose of the and or services, traditions, ideologies,product or service. Consumers are not and also a picture of quality communi-easy to choose the hospital services be- cated by each person who interacts withcause not all hospitals may be tried one client organizations (Kotler, Bowen andby one. Consumers will gather informa- Makens, 2006). Institutional image cantion and select various alternatives, in- also become an important icon in thecluding comparing his experience with competition, because consumers knowthe experience of others. Consumers will the products and services through thebe helped to understand the hospital ser- image. In the field of hospital servicesvices offered through a set of institu- Cooper (1997) described the positivetional characteristics that make up the influence the quality of physicians, careimage of the institution. Institutional facilities and technology, diagnostic fa-image is defined as beliefs, attitudes, cilities, the quality of overall care, inter-stereotypes, ideas, and behaviors rele- personal relationships, employee aware-vant to a person against an object, per- ness of personal needs of patients, main-son or organization (Belanger, Mount, tenance of patient experiences of hospi-and Wilson, 2002). So institutional im- tal services suggests , location and ratesage a result of various institutional ac- of hospital image.tivities to be communicated to the publiceither through verbal communication,non-verbal, formal, informal, direct and Research Methodsindirect thus forming the perception ofthe institution. Institutional image is the This research is a verification or ex-individuals perception of the institution planatory surveys, which is a type ofin the form of associations inherent in research to find out the relationship be-consumer memory. Customer perception tween variables by testing the hypothe-can be determined by the image or repu- sis. Research design is ex post fact.tation of the institution (Zeithaml, Bit-ner, 1996: 114). Data Sources and Methods of Data DeterminationConsumers will tend to use the productor service institutions which they say The primary data source is the patients,have a good image or images that are while the secondary data source ob-consistent with their expectations. Per- tained from the hospital managementsonal experience, information received annual report of Department of Healthfrom others, and promotion conducted and Hospital Association of Indonesia.by institutions all have an impact on cus- The collected data is cross section datatomer perception of the image of institu- during 2008. This study uses 420 re-tion (Kurtz, Clow, 1998:24). spondents of patients from 23 private hospitals of Solo Raya, with VIP stratifi-Institutional image can be described as cation, Class I, II, and III. And was usedan overall condition of the institution in random sampling with weighting com-the minds of audiences associated with plex sample. Data obtained by using (a)such physical attributes as well as organ- Interviews, (b) Observations, and (c)
8. Y. Purwanto / Issues in Social and Environmental Accounting 2 (2010) 168-185 175Questionnaire, and follow up result by Operational definition of variables,using Focus Group Discussion. dimensions, indicators, measures and scales used are shown in Table 1. Table 1. Operational Definition of Variables Variable/ Sub The Concept of Variable/ Indicator Scale Variable Sub Variable/ DimensionService Deliv- A performance that con- The elements that consist of Ordinalery Perform- sists of physical support physical support and personnelance and contact personnel contact(ξ-1)Physical sup- Physical facilities, ambient Availability and quality of physi- Ordinalport condition and servicescape cal facilities, technology and which measured by avail- environment ability, convenience and attractivenessNguyen and Availability (X------1.1) Availability / completeness and OrdinalLeblance the(2002) easy of using facilitiesPires (2005), Convenience (X------2.1) Leisure, feasibility, safety, tran- OrdinalOzcan (2007), quility, cleanliness, beauty, suffi-Gustafon cient of light, and air(2007)Johnston and Attractiveness (X------3.1) Attractiveness, strategic, pres- OrdinalClark (2008) tige, new, and the uniqueness ofZeithmal the supporting facilities(2006)Contact Service delivery process appearances of Medical labor, OrdinalPersonnel and make direct contact paramedic and non-medic in with patients providing servicesNguyen and Appearance (X------4.1) tidiness of medics appearance OrdinalLeblance (external appearance, clothing,(2002) tidiness, uniformity), paramedi- cal and non-medic in providing servicesPires (2005), Competence (X------5.1) Competence of expertise and OrdinalOzcan (2007), experience of medic, paramedicGustafon and non-medic when providing(2007) servicesJohnston and Profesionalism (X------6.1) Speed, responsiveness, friendli- OrdinalClark (2008) ness, timeliness, simplicity of theZeithmal process, ease encountered, and(2006) clarity of information Corporate Patients’s perceptions Patient’s views on hospital’s OrdinalSocial Respon- about hospital responsibili- responsibilities to the community sibility ties around them (ξ-2)
9. 176 Y. Purwanto / Issues in Social and Environmental Accounting 2 (2010) 168-185 Table 1. (continued)Kotler and Lee Concern for the promotion Patient’s view about hospital’s Ordinal(2005), Frank, of social issues such issues care on the campaign of danger-(2007), Schreck -issues and increase public ous social issues, and increasing(2009) awareness around the hos- the awareness of positive behav- pital (X------7.2) ior to the community around the hospital The involvement of hospi- Patient’s view about the hospi- Ordinal tals in the social problems tals involvement in the response prevention (X------8.2) to the problem which is happen- ing in the surrounding commu- nity Personnel help/ volunteers Ordinal The patients view on personnel/ to get involved in social- volunteers aid to engage in so- society programs (X------ cial-society program 9.2) Material help/ donations The amount of material dona- Ordinal and social facilities in an tions (funds, goods, and drugs); effort of community devel- personnel; infrastructure facili- opment (X------10.2) ties, provision of community empowerment programs Institutional Perceptions about a hospi- Introduction, the reputation of Ordinal Image tal institution that reflected personnel competence, technol- (η-1) like the existing associa- ogy, moral-ethical and overall tions in memory, feelings of patientsHall (2000) Popularity (y------1.1) Introduction to the hospital OrdinalFoley and Competence reputation (y The view about the reputation OrdinalKendrik (2006) ------2.1) for competence of medic, para- medic and non-medicFrombun The reputation of health The view about the reputation Ordinal(1996) technology (y2.1) for technology mastery owned by the hospital Reputation for moral and The view of moral-ethical repu- Ordinal ethical codes (y4.1) tation within the health practices Reputation of the recovery The view about the reputation of Ordinal rate of patients (y------5.1) recovery rate of patients Competitive The patient’s perception Suitability of the benefits gained Ordinal advantage that a hospital outper- by patient’s sacrificial compared (η------2) formed other hospitals in with other hospitals providing value (customer value) Benefits All benefits derived from Benefits of facilities, services, Ordinal the services, personnel and personnel and prestige obtained image by the patients compared to com- petitorsKotler (2009), Product’s benefits/ facili- Ordinal The benefits of the facility whichKotler, Bowen ties (y------6.2) is perceived compared to com-and Maken petitors(2006)
10. Y. Purwanto / Issues in Social and Environmental Accounting 2 (2010) 168-185 177 Table 1. (continued) Lovelock Benefits of the services (y Ordinal The benefits of the services(2005) ------7.2) which is perceived compared to competitorsBest (2009) Personnel benefits (y------ Ordinal The benefits of the personnel 8.2) which is perceived compared to competitors Prestige benefits (y------ Ordinal The benefits of the prestige 9.2) which is perceived compared to competitors Cost All costs incurred by the Ordinal The perceptions about the sacri- patients sacrifice to obtain fices in the service cost, time, services energy and psychic than the competitorsKotler (2009) Cost of money (y------10.2) Ordinal Perceptions of determining theBowen, and cost of patients compared toMaken (2006) competitorsLovelock Cost of time (y------11.2) Perception of time which is sac- Ordinal(2005) rificed in running the service compared to competitorsBest (2009) Cost of energy (y------12.2) Perception of energy which is Ordinal sacrificed in running the service compared to competitors Cost of psychic (y------13.2) Perception of psychic which is Ordinal sacrificed in running the service compared to competitors Patient trust Patient trust is the convic- The trust of patients to the reli- (η3------) tion of the patient to the ability of technological equip- Ordinal hospital’s integrity and ment, and personnel to achieve reliability the level of recoveryShamdasani Trust in the reliability (y Trust in the reliability of the hos- Ordinaland -----14.3) pital in patient careBalakhrisna(2000)Andreassen and Trust on the quality of Trust in the quality of hospital OrdinalLindestad equipment (y-----15.3) technology equipment(1998)Teo, Thompson Trust in the professional- Trust in the professionalism of Ordinaldan Liu (2007) ism of the personnel (y----- the personnel in helping the heal- 16.3) ing Confidence in hospital Trust in hospital services will Ordinal services will help the heal- help the healing ing (y-----17.3) Trust in hospital communi- Trust in the promise that has Ordinal cation message content (y-- been communicated to the hospi- - --18.3) tal to provide the best services
11. 178 Y. Purwanto / Issues in Social and Environmental Accounting 2 (2010) 168-185Research Model tion, and reciprocal.To analyze the relationship among vari- The framework of the flow of inter-ables is used Structural Equation Model- variable relationship is shown in the fol-ing (SEM), so it can be analyzed on the lowing picture:measurement equation, structural equa- Figure 1. Variables CorrelationDescription: Finding and Discussion ξ-1 : (Service delivery performance)ξ-2 : (Corporate social responsibility/ It is got from the statistical model as CSR) shown in Figure 2 and 3.η1 : (Institutional image)η2 : (Competitive advantage) Based on data from Table 2 we con-η3 : (Patient trust) cluded that the model has met several fit models criteria.The mathematical model equation is:Model 1: η1 = γ1.1 ξ1+ γ2.1 ξ2 + β2 η2 + Based on the value of λ, it is known thatζ1 Service Delivery Performance is a vari-Model 2: η2 = γ2.2 ξ2+ γ1.2 ξ1 + β1 η1+ ζ 2 able that has the greatest influence onModel 3: η3 = γ1.3 ξ1+ γ2.3 ξ2+ β1 η1+ β2 competitive advantage (0.49), institu-η2 + ζ 3 tional image (0.40) and patient trust (0.12) compared with the influence ofThe criterion used is that the hypothesis corporate social responsibility (CSR) tois accepted if the value of students sta- competitive advantage (0.08), institu-tistical analysis t was greater than 1.96 tional image (0.09) and patient trustand is rejected if less than or equal to (0.02).1.96.
12. Y. Purwanto / Issues in Social and Environmental Accounting 2 (2010) 168-185 179 Figure 2 Structural Model of Estimation Value in Research Paradigm Model Figure 3 T-Value Structural of the Paradigm Research ModelFrom the computational model of SEM, institutional image amounted to 24.70%.it obtained the value of direct and indi- The total effect of service delivery per-rect effects, as summarized in Table 3. formance, corporate social responsibil- ity, and institutional image to competi-The total effect of service delivery per- tive advantage are at 33.75%. While theformance, and competitive advantage to total effect of service delivery perform-
13. 180 Y. Purwanto / Issues in Social and Environmental Accounting 2 (2010) 168-185 Table 2. Testing of Research ModelDb 340Normal Chi Square 1548,82RMSEA 0,072p-value 0,00342Goodness of Fit Index (GFI) 0,93Adjusted Goodness of Fit Index (GFI) 0,91 Table 3. Direct and Indirect Effect VARIABLE EFFECTS Influence Influenced Direct Indirect TotalService Delivery Performance 5,76% 0,64% 6,40%Corporate social responsibil-ity 1,44% 0,04% 1,48% Institutional ImageCompetitive Advantage 16,81% 0,01% 16,82% Total 24,01% 0,69% 24,70%Service Delivery Performance 31,36% 0,16% 31,52%Corporate Social Responsibil- Competitive Advan-ity tage 1,00% 0,01% 1,01%Institutional Image 1,21% 0,01% 1,22% Total 33,57% 0,18% 33,75%Service Delivery Performance 5,29% 2,56% 7,85%Corporate Social Responsibil-ity 0,09% 0,16% 0,25% Patient TrustInstitutional Image 10,89% 0,01% 10,90%Competitive Advantage 4,41% 1,21% 5,62% Total 20,68% 3,94% 24,62%ance, corporate social responsibility, nificant through increasing institu-institutional image and competitive ad- tional image by improving competitivevantage to patient trust amounted to advantages through service delivery per-24.62%. formance optimizing. While the corpo- rate social responsibility variable is aA variable with insignificant effect is catalyst for improving institutional im-only on corporate social responsibility age and enhancing competitive advan-(CSR) to patient trust, whereas other tage through social policy.variables have a significant effect. Strat-egy to improve patient trust is more sig- Corporate social responsibility is a so-
14. Y. Purwanto / Issues in Social and Environmental Accounting 2 (2010) 168-185 181cial responsibility which may be one food menu. (3) Competence as improvevariable that has a positive impact on their skill specialization and experiencetrust, but the research facts of patients of and flying hours.private hospitals in Solo Raya showsthat corporate social responsibility has (b) Indicators of corporate social respon-not yet had a significant positive effect. sibility (1) Involvement in preventingCSR of private hospitals in Solo Raya social problems that are happening suchhas not become a strategic policy. as helping the event is happening as the victims of flooding in areas along theFrom tables 3 above, the solution vari- banks of the Bangawan Solo river, land-ables which is suggested is to improve slide of Karanganyar, and lack of cleanservice delivery performance, corporate water. (2) Aids of social facilities forsocial responsibility, institutional image community development such as im-and competitive advantage. Institutional proving rural roads, social facilities,image effect (10.89%), followed by ser- public toilets, and mosquito fogging.vice delivery performance (5.29%),competitive advantage (4.41%), and In order to deepen the understanding of0.09% corporate social responsibility. the phenomenon the writer held FGDWhile institutional image and competi- involving the hospital managerial, thetive advantage have a reciprocal effect, result shows: the patient trust is a dy-both are influented by service delivery namic variable as the result a dynamicperformance . interaction of institutional image, com- petitive advantage, service delivery per-The descriptive research also shows that formance and corporate social responsi-the level of patient perception of the bility. Fixation strategy can be startedvariables are all relatively moderate, and from service delivery through contact ofthe gap between level of importance and personnel and physical support. Andreality is at a great value (PointGap <(- through the corporate social responsibil-1)), thus indicating that the suggested ity strategy can be concerned on the so-improvements are comprehensive and cial activity and hospital involvement insimultaneously involving all indicators. the infrastructure around its environmentBut as a logical step, realistic solutions and community development. But it willhave been designed with a priority rank- be difficult to carry because of the lacking to see 5 (five) indicator variable with of fund resource and cultural factorthe largest PointGap, namely: shares important significance although it is not involved as variable. Along with(a) Performance Indicators of Submis- hospitals in developing countries, thesion Services (1) Professionalism such fund lacks significance factor. Privateas increase: friendliness, responsiveness, hospitals in Solo Raya are loaded byspeed, ease encountered, accuracy, ease social and religious organizations whichof procedure and the clarity of informa- are mostly social oriented regardless totion. (2) Attractiveness such as the in- the economic motive.crease: the unique interior and exterior,distinctiveness support facilities, facili- The investigations found that the privateties information and communication as hospitals in Solo Raya based on all indi-well as variety and uniqueness of the cators of service delivery performance,
15. 182 Y. Purwanto / Issues in Social and Environmental Accounting 2 (2010) 168-185corporate social responsibility, institu- Conclusiontional image, competitive advantage andpatient trust have not fulfilled the expec- Patient trust is influenced positively bytations of patients. Professionalism is an the competitive advantage, institutionalindicator as the most important one. image, and service delivery perform- ance, but is not influenced directly byThis investigation focused on public corporate social responsibility. Competi-hospitals and yet research on the unit of tive advantage has a mutual positive in-analysis involves both individual pa- fluence on institution image, but com-tients and the unit of analysis on all petitive advantage has a greater influ-types of hospital institutions (such as ence on institutional image rather thangovernment hospitals, special hospitals, vice versa. Private hospitals are advisedmaternity hospitals, hospitals), making to improve both service delivery per-generalizations which are limited to formance improvement of physical fa-privatised public hospitals in the Solo cilities and personnel performance andRaya region. increase social responsibility activities to enhance the institutional image andThis investigation only focused on the competitive advantage that is expectedinfluence of selected variables to vari- to increase patient trust.able of patient trust, namely service de-livery performance, corporate social re- Limitationssponsibility, institutional image andcompetitive advantage, and based on The weakness of the study was that theresearch results, there are still other vari- level of generalization is limited. For theables not examined the influence of such purposes of generalization, the next re-internal environmental conditions of search needs to relate to the broader areapatients another patient the external en- of research and involves a large area,vironment, as well as conditions micro- and type of hospital such as governmentsystem. hospitals, maternity hospitals, military hospitals, and specialized hospitals. InStudy of the hospital in Solo Raya has a addition, also to be considered is theuniqueness, namely the level of BOR inclusion of non-hospitalized patients for(Bed Occupation Rate) is low, whereas both causal and comparative researchwhen looking at the ratio of the number that has not been performed in this in-of beds to population is small. It means vestigation.that the number of available hospitalshave not been categorized saturated. Further ResearchThis is possible because of low purchas-ing power of Solo Raya. Meanwhile, the This research is based on the customersgovernment general hospital (Hospital, perspective as a primary data source. ToMilitary General Hospital) is relatively find a more dynamic relationship, aused by patients, especially in class of study needs to be done from the com-subsidy of local government insurance pany perspective, using both employeeeither, and public health insurance pro- and management as a source of primarygram. data.
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19. Issues In Social and EnvironmentalAccounting Associate Editors: Hussain, Mostaq M., University of New Burnswick, Canada Komsiyah, University of Trisakti, Indonesia(Issues in SEA) Editors Advisors: Fuglister, Jayne, Cleveland State University, USA Gray, Rob, St. Andrews University, Scotland UK Na’im Ainun, Gadjah Mada University, IndonesiaISSN : 1978-0591 Syakhroza, Akhmad, University of Indonesia, IndonesiaHasan Fauzi, Sebelas Maret University, Indonesia Members of Boards: 1. Adams, Carol, La Trobe University, Australia 2. Al-Khadash Husam Aldeen, Hashemite University, Al-Khadash, Jordania 3. Aras, Guler Yıldız Technical University, Turkey Guler, CALL FOR PAPERS (9th ISSUE) 4. Ball, Amanda University of Canterbury, New Zealand 5. Berman Shawn, University of New Mexico, USA Berman, 6. Brown Judy, Victoria University of Wellington, New Brown,Issues in SEA is an international journal as networking and dis- Zealandsemination means of practices and theory of social and environ- 7. Brown, Alistair, Curtin University of Technology, Australia Brownmental accounting. Since Problems of social and environmental 8. Campbell David, New Castle University, UK Campbell,in general and in accounting context in specific have been global 9. Choi Jong-Seo, Pusan National University, Korea Choi, Jong- 10. Crowther David. De Montfort University, United King- Crowther,issue, it is necessary for us to share and cooperate to make bet- domter the corporate financial, social and environmental perform- 11. Donleavy, Gabriel D., University of Macau, Chinaance. Issues in SEA publishes rigorous, original and innovative 12. Freeman, Edward University of Virginia, USA Edward,scholarly papers dealing with theoretical, empirical, applied, 13. Georgakopoulos, Georgios University of Amsterdam, Georgios,surveys, and case studies providing meaningful insights into the The Netherlandssubject areas. 14. Ghazali, Imam University of Diponegoro, Indonesia Imam, 15. Guthrie, James The University of Sydney, Australia James, 16. Husted, Bryan ITESM/Instituto de Impresa, Mexico Bryan, 17. Ibrahim, Daing N University of Sains Malaysia, Malaysia N.,Subject Coverage 18. Idris, Kamis Universiti Utara malaysia Kamis,Topics include but are not limited to: 19. Jasch Christine Maria, The Institute for Environmental Jasch, Environmental accounting Management and Economics, Austria Social accounting 20. Kent, Pamela Bond University, Australia Kent 21. Kokubu, Katsuhiko Kobe University, Japan Katsuhiko, Ethical issues in accounting and financial reporting 22. Lawrence, Stewart University of Waikato, New Zealand Stewart, Corporate governance and accountability 23. Mahoney, Lois, Eastern Michigan University, USA Accounting for the Costs and Benefits of CSR-related Activities 24. Murray Alan, Sheffield University, UK Murray, Accounting and Disclosure of Environmental Liabilities 25. Maunders, Keith, University of the South Pacific, Fiji Corporate Environmental Strategy 26. Magness ,Vanessa Ryerson University, Toronto Canada Vanessa Corporate Social Performance 27. Nik Ahmad Nik Nazli, International Islamic University Ahmad, Malaysia, Malaysia Corporate social responsibility and management control 28. O’Donovan Garry, University of Tasmania, Australia O’Donovan, Corporate social responsiveness 29. Orlitzky Marc, University of Redlands, USA Orlitzky, Triple bottom line performance 30. Palliam, Ralph American University of Kuwait Ralph, 31. Parker, Lee University of South Australia Lee, 32. Pondeville, Sophie Marquet Université University of Marquet, Namur, BelgiumSpecific Notes for Authors 33. Rahman, Azhar A Universiti Utara Malaysia, Malaysia A.,Submitted papers must not have been previously published nor 34. Roberts, Robin, University of Central Florida, USA Robertsbe currently under consideration for publication elsewhere. All 35. Rasheed, Abdul A., University of Texas at Arlingtonpapers are refereed through a double blind process. Issues in 36. Schaltegger, Stefan University of Lueneburg Stefan, GermanySEA is published biannually in June and December, so each con- 37. Sen Swagata, University of Calcutta, India Sen,tributor is encouraged to submit the papers before 30 May and 38. Savage, Deborah EMA Research & Information Center Deborah,30 November. See information for contributors and submission (EMARIC), USA 39. Suharjanto Djoko, Sebelas Maret University, Indonesia Suharjanto,guidelines to submit your paper. The contributors are required to 40. Stapleton, Pamela, University of Manchester UKsubmit their paper electronically, using Microsoft word, to this 41. Svensson, Goran, Oslo School of Management, Norwayaddress: email@example.com or firstname.lastname@example.org 42. Elijido-Ten Evangeline Swinburne University of Technol- Elijido-Ten, Evangeline, ogy, Australia 43. Belal, Ataur, Ashton University, UKContact: +62271827003 fax +62271827003 44. Freedman, Martin Towson University, USA Martin, 45. Chen, Jennifer C Brigham Young University, Hawai, USA C.,Web Address: http://isea.icseard.uns.ac.id and 46. Cho, Charles H Concordia University, Canada H.,http://web.ebscohost.com 47. Patten, Den, Illonois State University, USA Den 48. Larrinaga-González, Carlos Burgos University, Spain Larrinaga- Carlos, 49. Laine, Matias, University of Tampere, FinlandPublication of Indonesian Centre for Social and Environ- 50. Tarta, Monica The Academy of Economic Studies, Monica,mental Accounting Research and Development (ICSEARD) Bucharest, Romaniaand EBSCO Publishing 51. Tilt, Carol A., Flinders University, South Australia 52. Koleva, Petia University of Nantes, France Petia, 53. Yusoff, Haslinda UiTM, Malaysia Haslinda,Faculty of Economics 54. Zein, Mustaffa M UiTM, Malaysia M.,Sebelas Maret University, 55. Selvam, V VIT University, India V.,Jl. Ir Sutami 36 A 56. Jardat, Rémi ISTEC, Paris, France Rémi,Solo 57126 57. Caliyurt, Kiymet Tunca Trakya University, Turkey Tunca,Indonesia 58. Momin, Mahmood Ahmed Auckland University of Ahmed, Technology, NZ
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