Socio Technical System Theory : When The Law Rules The Business.

Fitrianingrum, Agustina (2019) Socio Technical System Theory : When The Law Rules The Business. In: The 5th Joint International Conference, 15 June 2019, Youngsan University, South Korea.

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Abstract

ASEAN Economic Community (AEC) has been established in 2015, it is considered as a major milestone in the regional economic integration with 10 ASEAN Member States (AMS). Opportunities of a huge market of US$ 2.7 trillion with the total population more than 640 million people in 2017 is a prominent future for ASEAN which is now already be the 3rd largest in economic community Asia and 7th largest in the world. There are three economic generators for AMS which boost the GDP per capita up to US$ 4.308 (increase more than 3 times since 2000) are agriculture (10%), manufacturing (36.8%), and services (50.9%). Manufacturing has been playing important role for the AMS international merchandise trades for export and import. it increases in 2017 by reaching to US$ 2.573 billion. In respond to the issue of better life, United Nation (UN) designed a grand agenda of Sustainable Development 2030. The focus of discussion is how to optimize the manufacturing which is identical with export performance? The determinant internal factors namely: export marketing strategy, firm’s characteristics, including knowledge, firm’s ability and market orientation and; management characteristics while are the mainly factors that cannot be controlled are market intensity and legal-political environment. It is involving the legal, political and regulatory nature of the market and the extent of government intervention into the operation of the export market venture. Supply Chain Performance is related with distribution channels are concerned, inaccessibility to distribution channels has been widely cited as the reason behind the failure of many foreign market ventures. STS theory encompasses three general subsystems; technical, social and environmental. Both side of Supplier and Buyer have their environment that entities including relevant governmental, economic, industrial, transportation and cultural firm contexts. STS emerge where social, technical and environmental systems interact to create organisational outcomes. In supply chain process, Infrastructure has an essential part to the realization of economic integration. It promotes and enhances the physical connectivity. Infrastructure can be categorized into hard and soft infrastructure. The hard infrastructure refers to physical structures that support the society and economy: transport, energy, telecommunications; and basic utilities. Soft infrastructure refers to non-tangibles, such as policy, regulatory, and institutional frameworks; governance mechanisms; systems and procedures; social networks; and transparent procurement systems. While achieving regional hard infrastructure integration is one of ASEAN’s most challenging tasks, given the region’s geographic, size and economic diversity and large funding requirements. Hence, soft infrastructures can be the bridge to realize the ASEAN connectivity in the Economic Integration. Better infrastructure will realize the AEC Blueprint to be a simple, harmonized and standardized trade and customs, processes, procedures and related information flows are expected to reduce transaction costs in ASEAN which will enhance export competitiveness and facilitate the integration of ASEAN into a single market for goods, services, investments and production base. ASEAN achievement will contribute to UN SDGs realization in 2030.

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