Reseach Paper GSCM
Reseach Paper GSCM
Reseach Paper GSCM
Abstract
Over the past few decades, companies have shown growing interests in relation to the
environmental impact of their manufacturing activities. Green supply chain management
(GSCM) has been considered by the manufacturers as a feasible option to reduce the
environmental impact of operations while simultaneously improving their operational
performance. The literature suggests that further research on institutional pressures, performance,
and environmental practices are needed, especially in the case of developing countries like
Pakistan. The present paper explores the GSCM pressures, practices, and performance observed
in the chemical industry of Multan. The data were treated using partial least squares structural
equation modeling (PLS-SEM) provided by Smart PLS software. The results show that the
sustainability (economic, environmental and social performance) of the studied supply chain is
positively related to the adoption of GSCM practices. In addition, the present research also
identified the institutional pressures that influence this supply chain to pursue green supply chain
management practices. The results of this study provide managerial and theoretical approaches
for different industries in Pakistan to focus on environmental awareness by adopting GSCM
practices. In addition, this study helps increase confidence among managers and policy makers
of different industries of developing countries like Pakistan in the adoption of GSCM practices to
improve sustainability.
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Keywords: GSCM, Institutional Pressure, Sustainability ( Economic, Environmental and
Social Performance
1. Introduction
Many firms have been shifted towards using GSCM practices because of globalization
and the environmental pressure (Mathivathanan, Kannan et al. 2018). Sustainability and
GSCM have been taken as bringing innovation into the industrial operations of an
organization (Taghikhah, Voinov et al. 2019). There has been a positive impact of
Sustainability on the enterprise performance in the field of supply chain (Hong, Zhang
et al. 2018). When firms are involved in activities of supply chain, there comes an
economic, social and environmental well‐being (Fernando and Wah 2017). Th GSCM
practices has been taken as an indicator to increase the ecological benefits (Ahmed,
Najmi et al. 2019). Adopting sustainability and GSCM practices have become a
necessary occurrence for firms seeking to reach the global market during the last decade
(Yadav, Luthra et al. 2020). The reduced energy consumption, less waste and saving of
resources is a result of adoption of SDGs (Sustainable Development Goals (Ma, Zhang
et al. 2020). In order to select a sustainable supplier, there are three basic criteria which
include environmental, social and economic factors (Durmić 2019). In developing
countries, majority of the firms were concerned only about the economic factors but
nowadays firms and institutions are focusing on the environmental issues as (Ali, Saad et
al. 2019).
2. Literature Review and Hypothesis Development
The studies regarding GSCM are very few in developing countries of the world (Teixeira,
Jabbour et al. 2016). The success of a firm depends on the selection of good suppliers (Jeong and
Lee 2017). The GSCM practices are adopted by the firms in their corporate strategies due to
competitiveness, legal restrictions and environmental awareness (Jeong and Lee 2017). Green
packaging aids in implementation of GSCM practices through cooperation with the customers
(Thamsatitdej, Boon-Itt et al. 2017). Eco-design is the action during early product development
stage to minimize the product’s environmental impacts during its life cycle without
compromising its performance and cost (Younis, Sundarakani et al. 2016). Eco-design considers
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life cycle assessment, avoids harmful material and uses resources efficiently (Somsuk and
Laosirihongthong 2017). It was revealed that many customers were ready to pay more of the
green products (Li, Lu et al. 2016). The adoption of green supply chain practices impacts
sustainability performance (Giuffrida and Mangiaracina 2020). The adoption of green supply
chain practices are associated with improvements in both environmental and economic
performance (Cousins, Lawson et al. 2019). It is considered that better environmental
management system may explore new opportunities for exploring new ways to add value to core
business programs (Esfahbodi, Zhang et al. 2016).
Institutional Pressure
Institutional Pressures significantly moderate the relationship between total quality management
and supplier relationships on Environmental Performance of the organization in the Indian
rubber industry dustry (Dubey, Gunasekaran et al. 2015). The conventions, regulations and
rules put an institutional pressure on firms and it becomes a reason for innovative and new
environmental (Murphy and Gouldson 2020). The laws and rules are taken as a major source of
outer influence on a firm’s GSCM practices (Lai, Wu et al. 2013). Environmental management
standards are implemented by organizations in terms of institutional pressure (Latif, Mahmood
et al. 2020). The GSCM practices are linked with the institutional pressure (Zhu and Sarkis
2004). In the light of above literature, the first hypothesis of this research paper is given as
H1: Institutional Pressure is related with the adoption of GSCM practices within an
organization.
It can be said that the adoption of GSCM gives rise to good economic performance (Zailani,
Jeyaraman et al. 2012). The economic improvements of GSCM are a lot and they include less
cost, less energy consumption, less investment in purchasing of raw material and less cost in
waste treatment (Vijayvargy 2017). The better environmental management programs are
adding more avenues for adding value in the business activities of the firms (Geng, Mansouri
et al. 2017). The high cost is a result of improved GSCM practices which in return increases the
economic improvement (Green, Zelbst et al. 2012). There has been a positive relation between
the Economic Performance and the green practices (Laosirihongthong, Adebanjo et al. 2013). By
3
reducing solid waste and promoting community health, GSCM practices have a beneficial impact
on the environment and the economy (Eltayeb, Zailani et al. 2011). The green practices have
a good impact on the environmental performance which automatically improves the economic
performance (Zhu and Sarkis 2004). In the light of the above literature, the second hypothesis of
this research paper is given as
H2: The adoption of GSCM practices is related with the economic performance of an
organization.
The environmental performance can be achieved when the GSCM practices are followed
according to many scholars (Zhu, Sarkis et al. 2007). The relationship between the green
performance and environmental management is positive (Seuring and Müller 2008). The green
practices are adopted by the firms to improve their business which gives rise to a good
Environmental Performance (Zhu, Sarkis et al. 2013). An effective IEMS (Integrated
Environmental Management System) helps in improving its environmental performance (Zhu,
Sarkis et al. 2012). The green practices are adopted by the desire of the firms to improve their
business which gives rise to a good environmental performance (Almeida, Alvarenga et al.
2019). The good will, relations and reputation of a firm give rise to environmental performance
(Jacobs, Singhal et al. 2010). In the light of the above literature, the third hypothesis of this
research paper is given as
H3: The adoption of GSCM practices is related with the environmental performance of an
organization.
The social sustainability and its supply chain reveals the safety and health of the workers (Ashby,
Leat et al. 2012). The image and reputation of brand is saved when the companies are busy in the
social benefits of society (Awaysheh and Klassen 2010). While talking about the Social
Performance, it means improvement and increase in quality and standards of life of people
without harming the (Yusuf, Gunasekaran et al. 2013). The image and reputation of brand is
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saved when the companies are busy in the social benefits of society (Awaysheh and Klassen
2010). In the light of the above literature, the fourth hypothesis of this research paper is given as
H4: The adoption of GSCM practices is related with the social performance of an
organization.
Pressure is being faced by the companies from the stakeholders like competitors, customers,
suppliers and regulatory institutes because of the concern for their impact on the environment for
their operations (Govindan, Kaliyan et al. 2014). Many firms conduct GSCM with the ambition
of improving the economic performance of firms and reducing environmental impact (Baah
2019). Green practices in the supply chain lead to efficiency which increase market shares and
create profitability (Fang and Zhang 2018). The GSCM practices impact the sustainability for the
retailers and the stakeholder and focus safety of supply chain resources (Holweg, Teller et al.
2016). The GSCM practices have been taken by companies for many reasons and they include
financial reasons, customer demands, competitive advantage, environmental and social groups
(Lin and Sheu 2012). The institutions which perform EMS have a strong impact on total quality
management and sustainability performance (Yang, Lin et al. 2010). In the light of above
literature, the further hypotheses of this research paper are given as
H5: The adoption of GSCM practices mediates the relationship between Institutional Pressure
and Economic Performance.
H6: The adoption of GSCM practices mediates the relationship between Institutional Pressure
and Environmental Performance.
H7: The adoption of GSCM practices mediates the relationship between Institutional Pressure
and Social Performance.
Sustainability Performance
Environmental Performance
Institutional Pressure (IP) Economic Performance
GSCM Practices Social Performance
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3. Research Methods
The data for this empirical study was collected from the chemical industry of Multan
specifically from the Pesticide and Fertilizer industry. The pesticide industry and fertilizer
industry were chosen because the pesticide and fertilizer industries are vast industries in Multan.
Therefore, middle and top-level managers from the pesticide and fertilizer industry in Multan
were taken as the target population and those firms were selected which were working more than
50 years and where the number of employees was more than 100. This is because the GSCM
practices are introduced only in corporate level firms in a developing country like Pakistan till
now. The questionnaire covered the variables of GSCM practices, Environmental Performance,
Economic Performance, Institutional Pressure and the Social Performance. Items for the
construct GSCM practices were taken from (Zhu and Sarkis 1998, 2007; Zhuet al. 2005, 2013).
Items for the variable Environmental Performance were taken from (Rao, 2002; Zhu et al. 2007,
2013). Items for the variable Economic Performance were taken from (Rao, 2002; Zhu et al
2007). Items for the construct Social Performance were adopted from Paulraj, 2011;Zailani et al.
2012). Items for the variable of Institutional Pressure were adapted from Zhu and Sarkis, 2007;
Zhu et al. 2008). A seven-point Likert scale was constructed in order to check the measures. A
questionnaire covering 5 variables and comprised of 22 questions was finally constructed. The
questionnaire was adopted on Google forms and then sent to the respondents for data collection.
The responses were taken by sending the questionnaire on apps like Whatsapp. Some responses
were collected by sending the questionnaire over the email addresses of the target population.
The questionnaire was constructed with closed questions. The scholar subsequently contacted the
persons on phone to encourage the filling of the forms. Both “probability and non- probability
sampling techniques” were used in data collection. Snowball sampling technique was used in
data collection for getting references of the Supply Chain and Operation mangers from the
pesticide industry of Multan. Purposive Sampling technique was also used because some specific
managers from the supply chain and production departments were required. Finally, 200
responses were collected from the respondents. For data analysis, IBM SPSS software and Smart
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PLS software were used. For demographic analysis, SPSS was used and for statistical analysis
Smart PLS was used.
Table 1
7
ENP3
8
Structural Equation Model ( SEM Model)
Figure 1
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GSCM3 0.829
GSCM4 0.765
GSCM5 0.806
GSCM6 0.802
ECP ECP1 0.785 0.868 0.904 0.653
ECP2 0.731
ECP3 0.885
ECP4 0.812
ECP5 0.822
ENP ENP1 0.875 0.853 0.911 0.773
ENP2 0.885
ENP3 0.877
SOP SOP1 0.802 0.857 0.903 0.700
SOP2 0.814
SOP3 0.851
SOP4 0.878
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IP4 0.354 0.352 0.485 0.870 0.398
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SOP2 <- SOP 0.814 0.812 0.036 22.524 0.000
H5 IP -> GSCM -> ECP 0.375 0.381 0.044 8.554 0.000 Accepted
H6 IP -> GSCM -> ENP 0.358 0.364 0.044 8.047 0.000 Accepted
H7 IP -> GSCM -> SOP 0.450 0.456 0.050 9.061 0.000 Accepted
The present study aimed to investigate the institutional pressure for the adoption of GSCM
practices in the chemical industry of district Multan, Pakistan, and to evaluate the effect of
GSCM practices on sustainability performance. The aims were achieved through empirical
study in which 202 middle and top-level managers from the chemical industry of district
Multan answered the questions on institutional pressure that motivates the adoption of
GSCM practices and the performance of the companies. This research attempts to implement
GSCM practices in a country like Pakistan where the concept of GSCM practices is new.
Pakistan is a developing economy and the concept of GSCM practices is still new for some
companies of Pakistan. The study and analysis conducted herein using PLS indicated that
institutional pressure is encouraging the chemical sector in Multan, Pakistan, to embrace
GSCM practices. In terms of the relationship between institutional pressure, GSCM
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practices, and sustainability, the findings suggest that their adoption has a significant
influence on the economic, environmental, and social performance of the organizations
evaluated. On the practical side, the findings of this study give fresh information to supply
chain managers, proving that the use of GSCM practices improves the company's
sustainability performance (environmental, economic, and social performance).
There have been few limitations in this research work. This study is limited only to the district
Multan due to time and cost constraints. This study is limited only to the chemical industry of
Pakistan. Furthermore, it is not viable to draw the same conclusions for various types of supply
networks. Further research might look into the same issues in supply networks encompassing
various industry areas. Future studies can be conducted in other industries of Pakistan such as
textile and paint industry. The IP-GSCM-Sustainability model is a new model which is still to be
tested in other geographies and demographics. Social Performance is a new dimension of the
Sustainability Performance which still needs to be researched in developing countries where
social sector development is an important indicator towards attainment of its SDGs (Sustainable
Development Goals).
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Appendix:
Dear Sir/Madam,
I need your kind assistance in completing the followings questions, which I shall use to
collect data for my research. Your help in completing this questionnaire is completely
confidential and will be highly appreciated. I shall be highly thankful to you for your
cooperation.
Best regards,
Misbah Bukhari / M.Phil Scholar,
NCBA&E, Multan.
17
Age: (1) □ 20-25 (2) □ 26-30 (3) □ 31-35 (4) □ 36-40 (5) □ >41
Highest level of Education:
(1) □ Intermediate (2) □ Bachelor (3) □ Master (4) □ MS/MPhil (5) □ PhD
Your experience:
(1) □ less than 1 years (2) □ 2-3 years (3) □ 4-5 years (4) □ 6-10 years (5) □ >10 years
Your experience of current profession:
(1) □ less than 2 years (2) □ 2-5 years (3) □ 6-10 years (4) □ 11 to 15 years (5) □ >15
years
SECTION 2: Green Supply Chain Management, Eco- Design Practices (Zhu and Sarkis, 1998, 2007)
Green Purchasing (Zhu and Sarkis 1998, 2007; Zhu et al. 2005, 2013)
Somewhat
Somewhat
Disagree
Disagree
Disagree
Strongly
Strongly
Opinion
Agree
Agree
Agree
of your agreement or disagreement with each statement.
No
GSCM1 Your firm produces products that have reused or
recycled materials. 1 2 3 4 5 6 7
Somewhat
Disagree
Disagree
Disagree
Strongly
Strongly
Opinion
Agree
Agree
Agree
18
ENP1 Your firm reduces its air emission.
1 2 3 4 5 6 7
ENP2 Your firm reduces the consumption of hazardous
materials. 1 2 3 4 5 6 7
Somewhat
Somewhat
Disagree
Disagree
Disagree
Strongly
Strongly
Opinion
Agree
Agree
Agree
of your agreement or disagreement with each statement.
No
ECP1 Your firm is improving its general level of profitability. 1 2 3 4 5 6 7
Somewhat
Disagree
Disagree
Disagree
Strongly
Strongly
Opinion
Agree
Agree
Agree
your agreement or disagreement with each statement. No
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SOP4 Your firm has changed its supply chain strategy to make
social sustainability data (ethical code of conduct on
1 2 3 4 5 6 7
communities) throughout its supply chain available to the
public.
SECTION 6: Institutional Pressure (Adopted from Zhu and Sarkis, 2007; Zhu et al. 2008)
Somewhat
Somewhat
Disagree
Disagree
Disagree
Strongly
Strongly
Opinion
Agree
Agree
Agree
of your agreement or disagreement with each statement.
No
IP1 For your firm, establishing enterprise green image is
1 2 3 4 5 6 7
extremely important.
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