Green supply chain management and organizational performance

Abstract

Purpose: The purpose of this study is to explore green supply chain management (GSCM) practices and their relationship with organizational performance. More specifically, this research explores the effect of GSCM efforts and other organizational factors on firm performance of small and medium enterprises (SMEs) that serve as suppliers to large customer firms in the electronics industry. Design/methodology/approach: This study developed a research model relating GSCM practice and business performance through three organizational variables (employee satisfaction, operational efficiency, and relational efficiency) as moderators. Statistical analyses were based on the data collected, through survey questionnaires, from 223 SMEs in the electronics industry in Korea. Reliability, validity, and goodness‐of‐fit of the research model were tested by the widely accepted statistical tools. To test the hypotheses relating GSCM practice implementation and business performance, structural equation modeling was used. Findings: The most anticipated finding of the study was a direct link between GSCM practice implementation and business performance. However, no statistical significance was found. Instead, significant indirect relationships were found between GSCM practice implementation and business performance through mediating variables of operational efficiency and relational efficiency. This result indicates that business performance will be improved when GSCM enhances operational efficiency and operational efficiency. Research limitations/implications: Research on GSCM is still at the early stage. Further refinement of the questionnaire is needed. Generalizability of the findings is also limited because of data collected from electronics firms in Korean. This study shed several important insights. The findings of this study are generally consistent with prior studies in other parts of the world. SMEs in the Korean electronics industry believe that GSCM practices help generate new opportunities to attract clients in addition to complying with the buyer firms' demand. It was also found that implementation of GSCM practices help improve operational and relational efficiencies of supplier firms. Originality/value: Few empirical studies have been done in GSCM based on the conceptual footing of resource dependence theory. Also, this study was conducted from the supplier's perspective in examining the weaknesses of SME suppliers. Thus, the authors emphasize the importance of support from large buying firms for improving SME suppliers' green management capabilities.