Company Capability as a Driver of Corporate Sustainability Performance in the Submarine Cable Ecosystem in Indonesia

Illustration by AI

FORMOSA NEWS

Research conducted by Nanang Hendarno and Sulaeman Rahman Nidar from Universitas Padjadjaran in June 2026 analyzes how internal company capabilities influence sustainability performance within the submarine cable industry in Indonesia.

Background and Issues

The telecommunications industry, specifically the submarine cable infrastructure, is a strategic sector for Indonesia's economy. However, the industry faces significant challenges, including high capital expenditure (CAPEX), low utilization rates of specialized vessels, and difficulties in reducing operational costs. Additionally, there is a shortage of certified human resources and a slow adoption of advanced technologies like IoT and AI. This study addresses the research gap regarding the relationship between company capabilities and sustainability performance in this specific ecosystem within a developing country context.

Research Methodology

This study utilizes a quantitative approach with an explanatory research design. Data were collected via a census of all 27 companies operating within the submarine cable industry in Indonesia. Analysis was performed using Partial Least Squares Structural Equation Modeling (PLS-SEM) to assess the causal relationships between latent constructs.

Key Findings

• Significant Influence: Company capability has a significant effect on corporate sustainability performance in the Indonesian submarine cable ecosystem.
• Dominance of Technological Capability: Technological capability is the most dominant dimension (loading factor of 0.941), serving as the main foundation for strengthening company capability. This includes the integration of real-time ship monitoring systems, marine sensors, and communication devices.
• Synergy of Capabilities: Success is not driven by a single capability, but by a combination of complementary strengths, including organizational learning (0.913), reconfiguring capability (0.866), seizing capability (0.864), and sensing capability (0.830).
• Economic Performance: Within the sustainability framework, economic performance has the highest impact (loading factor of 0.972), indicating that business sustainability remains heavily influenced by factors like market share, customer growth, and cost efficiency.

Implications for Management

The authors provide several strategic recommendations:

1. Strategic Investment: Management is advised to prioritize strategic investment in technological capabilities to improve operational efficiency and decision-making accuracy.
2. Organizational Learning: Fostering a culture of organizational learning is essential to adapt quickly to rapid technological and market shifts.
3. Holistic Sustainability: Management must strive to balance economic goals with environmental and social aspects to ensure that sustainability achievements are comprehensive rather than partial.

Author Profile:

• Nanang Hendarno and Sulaeman Rahman Nidar – Universitas Padjadjaran, Indonesia.

Research Source: Hendarno, N., & Nidar, S. R. (2026). "Company Capability as a Driver of Corporate Sustainability Performance in the Submarine Cable Ecosystem in Indonesia". Indonesian Journal of Business Analytics (IJBA), 6(3), 449-466.