The impact of boundary spanning activities and resource orchestration in improving performance of Indonesian state-owned bank branches

State-owned Enterprises (SOEs) are regulated by the state through full, majority, or significant minority ownership and contribute substantially to economic development, public well-being, and public finances. Governments have utilized SOEs, including state-owned banks (SOBs), during crises such as COVID-19 to support public health and economic recovery. SOBs operate in volatile, uncertain, complex, and ambiguous environments with unpredictable customer needs, intense competition, technological change, and digital transformation. These conditions impact banks’ strategic planning, financing availability, efficiency, and stability. The greater the environmental uncertainty, the more branch managers need to conduct boundary spanning activities. Organizations depend on their environment for resources and markets, and boundary spanning activities—such as negotiations, contracting, cooperation building, and managing interactions across boundaries—are essential at multiple organizational levels. Branch managers, interacting with customers and external stakeholders, perform roles such as ambassadors, task coordinators, scouts, guards, and service providers. In addition to boundary spanning, managers must orchestrate resources effectively to achieve performance by combining resources, capabilities, and managerial acumen. SOB branch managers face intra-individual goal conflicts, for example, balancing profit generation with responsibilities toward national economic recovery programs, and pressures from head offices and institutional logics. This study evaluates the impacts of perceived environmental uncertainty and intra-individual goal conflict on boundary spanning activities and resource orchestration, and their effects on perceived performance of branch offices. It aims to confirm prior findings and provide novelty on direct impacts of intra-individual goal conflict on boundary spanning activities and resource orchestration, and the direct impact of boundary spanning activities on resource orchestration.

Context: In Indonesia, four state-owned banks dominate the banking industry in networks, assets, and third-party funds. SOBs carry mandates to contribute to national development, generate profits, provide quality services, pioneer underserved sectors, and assist lower-income entrepreneurs, reflecting dual commercial and social objectives. Core SOE values emphasize trustworthiness, competence, harmony, loyalty, adaptability, and collaboration. The studied bank is the oldest SOB, originally a central bank, later a development bank, and finally a commercial bank with domestic and foreign branches. Literature definitions: Perceived environmental uncertainty (PEUN) is the individual inability to predict environmental conditions, effects, or response consequences due to insufficient or ambiguous information, comprising state, effect, and response uncertainty. Intra-individual goal conflict (GCFL) reflects incompatibility among multiple goals, including conflicts between external and personal goals, concurrent tasks, or multiple targets of the same task. Boundary spanning activities (BSAC) link the organization to its environment and include ambassador, task coordinator, scout, guard, external representation, information processing, and networking functions; they facilitate decision-making, conflict resolution, learning, innovation, and lateral collaboration. Resource orchestration (ROCR) describes managerial actions in structuring, bundling, and leveraging resources and capabilities (rooted in asset orchestration and resource management) to achieve competitive advantage, requiring synchronization across management levels. Perceived organizational performance (PPER) refers to subjective assessments of overall performance relative to competitors, often valid and reliable when objective data are unavailable. Hypothesis development: Prior studies suggest PEUN can increase BSAC and influence ROCR, although findings are mixed regarding BSAC. Evidence indicates ROCR interacts with environmental dynamics to affect performance and transformation. The study proposes H1.a: PEUN positively influences BSAC; H1.b: PEUN positively influences ROCR. Literature on direct links of GCFL with BSAC and ROCR is scarce; prior work shows indirect effects on performance and mediating variables, often negative for commitment and performance. The study proposes H2.a: GCFL negatively influences BSAC; H2.b: GCFL negatively influences ROCR. Literature portrays BSAC as an enabler of ROCR; this study posits a direct positive effect: H3: BSAC positively influences ROCR. Prior research shows ROCR positively relates to or moderates performance relationships; thus H4: ROCR positively influences PPER.

Design: Covariance-based Structural Equation Modeling (SEM) with parceling. Setting: One of Indonesia’s four SOBs, the first and oldest bank wholly owned by the government. Unit of analysis: 201 full-service branch offices; respondents: 186 officially assigned branch managers (92.54%) across 17 Regional Offices (excluding temporary managers and foreign branches). Sample profile: >90% male; >80% aged ≤46; 80.65% with >20 years’ experience; 99.46% postgraduate degree. Measures: Six-point Likert scale (1 = strongly disagree to 6 = strongly agree). Items adapted from literature, translated to Indonesian, refined via expert review. Variables and sources: PEUN (3 dimensions, 10 indicators; Silva & Ferreira, Milliken); GCFL (3 dimensions, 10 indicators; Kwan et al., Locke & Latham, Lee et al.); BSAC (5 dimensions, 19 indicators; Ancona & Caldwell; Bettencourt et al.); ROCR (3 dimensions, 13 indicators; Berseck; Carnes et al.); PPER (2 dimensions, 11 indicators; Delaney & Huselid). Example items provided for each construct. Data collection used an online form distributed through the bank’s network. Pre-test: 45 purposively selected ex-branch managers. Validity: 14 indicators invalid (3 PEUN, 5 GCFL, 4 BSAC, 2 ROCR). Reliability: Cronbach’s alpha 0.936. Questionnaire refined with expert input. Parceling: Given 61 indicators (ideal n≈610 for SEM), the study employed parceling by aggregating items into composites per dimension to reduce indicators, meeting SEM sample requirements (minimum ≈10×indicators; post-parceling minimum ≈160 met by n=186). Rationale and conditions for parceling followed literature (e.g., Little et al., Matsunaga). Measurement model: Validity criterion: standardized loading factor (SLF) ≥0.50. Reliability criteria: Cronbach’s alpha ≥0.90 (scale level), composite reliability (CR) ≥0.70, variance extracted (VE) ≥0.50 (Hair et al.). Results: PEUN CR=0.91, VE=0.57; BSAC CR=0.96, VE=0.57; ROCR CR=0.92, VE=0.53; PPER CR=0.96, VE=0.75. GCFL CR=0.86, VE=0.48 (accepted as reliable given CR>0.70 and VE>0.40). Overall model after parceling: 16 indicators, SLF>0.5, CR=0.98, VE=0.79. Goodness-of-fit: majority indices indicated good fit; Chi-square not fitting; in later check, Chi-square and standardized RMR did not meet thresholds, overall model considered good fit. Structural model and hypothesis testing: One-tailed tests at 95% significance; t≥1.65 considered significant. Paths tested: PEUN→BSAC, PEUN→ROCR, GCFL→BSAC, GCFL→ROCR, BSAC→ROCR, ROCR→PPER.

- Descriptives: All respondents experienced types of intra-individual goal conflict but reported head office support. Managers emphasized service delivery and ambassador BSAC, environmental monitoring and image management; they faced limited authority for ROCR, focusing on optimizing existing resources; branch performance improvement needed in employee retention and market share. - Measurement model: All constructs valid and reliable post-refinement (PEUN CR=0.91 VE=0.57; BSAC CR=0.96 VE=0.57; ROCR CR=0.92 VE=0.53; PPER CR=0.96 VE=0.75; GCFL CR=0.86 VE=0.48). Overall model CR=0.98 VE=0.79. Good fit on most indices; Chi-square and standardized RMR not met but overall acceptable fit. - Structural paths (t-values): • H1.a PEUN→BSAC: positive, significant (t=4.71). Supported. • H1.b PEUN→ROCR: positive, significant (t=3.57). Supported. • H2.a GCFL→BSAC: observed positive and significant (t=4.36), opposite to hypothesized negative direction. Not supported in sign, but statistically significant positive effect found. • H2.b GCFL→ROCR: negative, not significant (t=−1.32). Not supported. • H3 BSAC→ROCR: positive, significant (t=6.32). Supported. • H4 ROCR→PPER: positive, significant (t=16.16). Supported. - Overall pathway with highest load: PEUN → BSAC → ROCR → PPER. Findings show that higher environmental uncertainty prompts increased boundary spanning, enabling stronger resource orchestration, which in turn enhances perceived branch performance.

The study confirms that perceived environmental uncertainty motivates branch managers to intensify boundary spanning and resource orchestration. Managers respond to uncertainty by scanning and learning from the environment, filtering information to support programs, and elevating service excellence, then leveraging knowledge management to pursue goals. Contrary to the hypothesized negative effect, intra-individual goal conflict increased boundary spanning activities but did not affect resource orchestration. This suggests that, in the Indonesian context, managers faced with competing goals engage more externally to secure assistance, negotiate, and mobilize support while working within limited orchestration authority. Cultural dimensions (high power distance, collectivism/low individualism, relatively lower masculinity and indulgence) help explain why managers prioritize harmony, obedience to superiors, and loyalty to the organization, choosing to amplify boundary spanning rather than resist or reduce engagement. The direct, significant BSAC→ROCR link highlights that externally oriented managerial behaviors help acquire, align, and deploy resources, translating into stronger orchestration capabilities. Ultimately, ROCR strongly and positively influences perceived branch performance, underscoring the centrality of managerial resource coordination in SOB branches operating under uncertainty and goal tensions.

Four main findings: (1) Perceived environmental uncertainty positively and significantly influences boundary spanning activities and resource orchestration; (2) Intra-individual goal conflict, instead of exerting negative effects, positively and significantly affects boundary spanning activities but does not affect resource orchestration; (3) Boundary spanning activities positively and significantly influence resource orchestration; (4) Resource orchestration positively and significantly influences perceived branch performance. The observed positive GCFL→BSAC effect aligns with Indonesian cultural preferences for workplace harmony, obedience to supervisors, and organizational loyalty. The strongest explanatory path is PEUN → BSAC → ROCR → PPER, indicating managers counter uncertainty by increasing boundary spanning, which enhances orchestration and performance. The study contributes by confirming known relationships (PEUN with BSAC/ROCR; ROCR with PPER) and offering novelties on the direct BSAC→ROCR link and the GCFL relationships. Managerially, it suggests equipping branch managers with boundary-spanning and orchestration capabilities, enabling non-hierarchical communication with top management, and delegating greater orchestration authority to mitigate performance risks from goal conflicts.

Two limitations: (1) The model includes one external variable (perceived environmental uncertainty) and one internal variable (intra-individual goal conflict); (2) Respondents are limited to branch managers (middle management). Future research directions: (1) Add external variables (e.g., fintech, digital technology, COVID-19) and internal variables (e.g., digital transformation, new ways of working, digital culture); (2) Incorporate intervening variables (e.g., uncertainty, ambiguity, collaboration, customer engagement, goal commitment/prioritization/alignment, trust, perceived organizational support, strategic thinking, entrepreneurial orientation); (3) Broaden respondent types across managerial levels and boundary-spanning roles; (4) Replicate across other SOBs, private banks, other financial institutions, and SOE clusters.