Governance and Strategy in Sustainable Food Processing: A Hierarchical Framework

Abstract

This study investigates the governance and strategic frameworks required to advance sustainability in Indonesia’s food processing sector. Employing the Decision-Making Trial and Evaluation Laboratory (DEMATEL) method, the research systematically examines the interdependencies among governance, economic viability, social equity, and environmental sustainability. The analysis demonstrates that integrated governance structures and active stakeholder engagement represent the most influential drivers of sustainability outcomes, exerting significant causal effects on the adoption of sustainable practices. In contrast, resource constraints and knowledge gaps, particularly among small and medium-sized enterprises (SMEs), emerge as critical barriers that limit the sector’s capacity to transition toward sustainable models. The results emphasize the importance of aligning national and local policy frameworks to overcome fragmented initiatives and strengthen implementation across different levels of governance. Furthermore, the findings highlight the need for targeted capacity-building programs and financial incentives to support SMEs in adopting sustainable technologies and practices. Stakeholder collaboration—including government agencies, industry associations, and civil society—plays a central role in pooling resources and expertise to enhance sector-wide sustainability performance. By identifying the most influential drivers and barriers, this study provides actionable insights for policymakers and practitioners, underscoring the urgency of developing collaborative governance models to accelerate the sustainability transition in Indonesia’s food processing industry.