Green Supply Chain Initiatives for Competitiveness Dissertation

Abstract

The present study, which is quantitative in approach, utilizes a descriptive research (survey research) design to empirically investigate how the adoption of green supply chain initiatives influences a firm’s competitiveness and image within the UK’s manufacturing sector. The findings of this study are both insightful and informative and can be used by manufacturing organizations to leverage competitive advantage as well as enhance their image and reputation.

In summary, the study has found that (1) most firms’ employ a reactive approach rather than a proactive approach in the adoption of green supply practices practices, (2) most organizations are aware of GSCM practices and adopt the initiatives in varying levels depending on the drivers or pressures informing the adoption process, (3) most organizations have put in place measures to improve internal environmental management, investment recovery and reverse logistics, though the implementation of specific factors of eco-design and green purchasing is lagging behind, (4) green supply chain practices can assist organizations to leverage competitive advantage through cost savings, increasing national and international business opportunities, improving operational efficiency, enhancing the quality of products and improving employee productivity, and (5) firms that have fully integrated green supply chain practices into their supply chains are perceived favourably by customers and supply chain partners.

Introduction

Background

Green supply chain management (GSCM) has been gaining substantial interest amongst scholars and practitioners of supply chain management, purchasing, operations, and logistics, especially over the last decade (Perotti et al 2012), in large part due to the increasingly competitive, regulatory and community pressures forcing organizations to balance their economic and environmental performance (Sarkis 2012). With increased pressures for organizations to compete under an environmentally sustainable paradigm, it is expected that enterprises will need to develop and implement strategies to minimize adverse environmental impacts associated with their products, services, and operations (Zhu et al 2005).

Srivastava (2007) cited in Perotti et al (2012, p. 641) defined GSCM as “…integrating environmental thinking into supply chain management, including product design, material sourcing and selection, manufacturing processes, delivery of the final product to consumers as well as end-of-life management of the product after its useful life.” Success in addressing environmental concerns in supply chain management may provide new opportunities that may serve as a triggering factor for competitiveness, value addition to core business programs, and progression of organizational image and reputation (Holt & Ghobadian 2009).

However, despite the proliferation of hundreds of scholarly papers on the integration of environmental issues within supply chain management (Sarkis 2012), extant knowledge on how green supply networks can be used to enhance competitiveness and image development in the manufacturing sector remains highly fragmented even though organizations within this domain are highly dependent on their environments and tend to continuously adapt to external change dynamics (Zhu et al 2010; Lee et al 2012). Additionally, in recent years, the UK’s manufacturing sector has been on a downward trend in terms of its contribution to the country’s GDP (Holt and Ghobadian 2009), hence the need to undertake a study investigating how firms within the sector can promote their image and competitiveness through the adoption of green supply chain practices.

Research Aim, Objectives & Research Questions

The present study focuses on GSCM practice in selected manufacturing organizations within the United Kingdom (UK), intending to empirically investigate how the implementation of GSCM initiatives influences a firm’s competitive orientation and image. The specific objectives of this study include:

1. to investigate the degree to which UK’s manufacturing organizations are aware of the principles and initiatives of GSCM;
2. to investigate the perceptions of senior managers within the organizations on the role of GSCM in spurring competitive advantage and image/reputation development;
3. to identify and potential trajectories for organizations within the manufacturing sector to build image and competitiveness through GSCM initiatives; and
4. by doing so, contribute substantially to the body of knowledge regarding green supply networks and their potential organizational outcomes within the manufacturing sector.

The present research is guided by the following research questions, with the view to achieving the aim and objectives as set out in the study:

1. What have the organizations done to ensure the implementation of green supply initiatives within the supply chain management network?
2. How do green supply initiatives influence the organization’s competitive advantage and image development, especially along the supply chain?
3. What should be done to facilitate organizations in the achievement of competitive advantage and positive image using their supply channels and networks?

Rationale of the Study

The purpose of this study is to empirically investigate the extent and nature of GSCM adoption and implementation in the UK manufacturing sector; and if the implemented green supply chain initiatives have led to the enhancement of competitive advantage and image development within the supply chains of the concerned industry players within the sector. Fulfilling this purpose is worthwhile for organizations within the manufacturing sector in two broad ways. While corporate environmental management has traditionally oriented itself towards facilitating internal environmental initiatives of the organization (Hervani et al 2005), a stream of extant literature (e.g., Holt & Ghobadian 2009; Lee et al 2012) now demonstrates that focus is gradually shifting towards the effective and efficient management of an organization’s impacts outside the confines of the enterprise, into the management of upstream and downstream supply chain activities.

More importantly, with increasing environmental regulations witnessed in recent years, organizations within the manufacturing sector are expected to fulfill socially responsible business practices by producing environmentally sound products and servicing them to the final customers’ demand by employing environmentally sustainable practices throughout the supply chain (Hong et al 2009). The findings of this study unearth demonstrate socially and environmentally responsible business practices that could be used by organizations within the manufacturing sector to enhance their supply chain management models through the adoption of green supply initiatives.

The second reason why this topic is worthwhile is predicated upon the need for organizations to adopt strategies and practices that will enhance their business outcomes, including competitive advantage and reputation development. Extant literature demonstrates that organizations throughout the world are continuously attempting to develop novel and innovative ways to enhance their performance and competitiveness (Green et al 2012). Bacallan (2000) cited in Rao and Holt (2005, p. 898) is of the view that “some of these organizations are enhancing their competitiveness through improvements in their environmental performance to comply with mounting environmental regulations, to address the environmental concerns of their customers, and to mitigate the environmental impact of their production and service activities.” Since the manufacturing sector is a major player in supply chains under its responsibility to produce products for onward transmission to ending customers (Hong et al 2009; Holt & Ghobadian, 2009), the findings of this study serve as a reference point for organizations willing to implement GSCM to achieve environmental sustainability within their supply chains and hence enhance their competitiveness and reputation.

The choice of the manufacturing sector to serve as the study context in this research has been informed by two relevant issues. The first is grounded on the fact that the UK’s manufacturing sector, though not as big as the services sector in terms of contributing to the country’s gross domestic product (GDP), increasingly faces environmental pressures from government agencies and customers to improve its environmental image and performance (Holt & Ghobadian, 2009). organizations within the manufacturing sector can achieve these outcomes if knowledge about the adoption of environmentally sustainable green supply practices is availed to them. The second issue concerns the fact that although the manufacturing sector is at the core of supply chain networks (Quayle 2003; Hong et al 2009), many organizations continue to experience losses due to ineffective production and supply chain practices, and also due to lack of integration and coordination between their supply networks and customer expectations (Holt & Ghobadian 2009). Findings from this study will therefore assist these organizations to integrate green practices into their supply chain not only to boost their corporate image by satisfying the final customers of the supply chain but also to enhance performance in line with the acknowledgment that GSCM promotes efficiency, competitiveness, marketing exposure and synergy among business partners and lead corporations (Rao & Holt 2005).

Dissertation Structure

To successfully meet the study objectives and answer the research questions, this project is further organized into four chapters. Chapter 2 contains a literature review on the UK’s manufacturing sector and the industry’s application of green supply chain initiatives to provide a glimpse of the scenario about the achievement of competitive advantage and image development. This chapter also contains a literature review targeting the areas of theory in green supply networks, and also provides a critical synthesis of the relevant literature on green supply chain management along with some attempt aimed at critically evaluating the extant literature. Chapter 3 discusses the research methodology used in this study, along with the justifications considered in selecting the methods and approaches. Overall, this section discusses the study design, population and sample, data collection approaches, ethical considerations, and data analysis techniques. Chapter 4 is dedicated to a detailed analysis of the research findings guided by the objectives and key research questions, along with a comprehensive discussion of the findings. The final section provides conclusions and recommendations arising from the research findings as well as implications for future research.

Literature Review

Introduction

The present study investigates how the adoption of green supply chain initiatives influences a firm’s competitiveness and image within the UK’s manufacturing sector. This chapter analyzes relevant literature on the UK’s manufacturing sector, supply chain management (SCM), and green supply chain management (GSCM), before exploring two theories related to supply chain networks – the resource dependence theory and institutional theory. The chapter then proceeds by analyzing literature on the critical factors fostering the implementation of the practices, before analyzing literature on current green supply chain trends and practices. Afterward, the chapter evaluates extant literature on GSCM and firm competitiveness as well as green supply chain initiatives and image development. The chapter then concludes with a summary of the main themes reviewed in the section.

The UK’s Manufacturing Sector

The manufacturing sector continues to play a substantial role in the growth and prosperity of the economy in many countries (Huang et al 2012a). Extant literature demonstrates that “in 2009, manufacturing was the third largest sector in the UK economy in terns of Gross Value Added (contributing £126.74 billion), behind Wholesale and Retail (£137.68 billion) and Financial Services (£126.89 billion)” (Hatton 2012, p. 1). The sector remains a significant contributor to the country’s GDP, exports, and employment, though scholars and practitioners agree that it has been in relative decline for a long time now (Holt & Ghobadian 2009). Consequently, the need to retain national and, in some instances, international competitive advantage is leading UK’s manufacturing firms to develop corporate strategies, entailing integration and development of their supplier bases (Kim & Min 2011), as well as “greening” their business practices to meet environmentally challenging requirements (Holt & Ghobadian, 2009). Indeed, an increasing number of UK manufacturing firms are embracing the concept of GSCM not only to get more international business opportunities and cut down on costs by enhancing their supply chain practices but also to increase productivity and enhance the environmental image (Kim & Min 2011).

Manufacturing firms in the UK, which are concentrated in areas dealing with petroleum products, chemical products, pharmaceutical products, rubber and plastic, metal products, computers, and electronic products, electrical equipment, machinery, and transport equipment, among others (Hatton 2012), certainly require GSCM because the “waste generation and natural resource use, primarily attributed to manufacturing, contribute to environmental degradation” (Hsu et al 2013, p. 658). Additionally, the mounting global concerns call for an urgent need for these organizations to shift their strategies and operations, with the view to responsibly incorporating environmental issues into their supply chains to effectively deal with devastating environmental, economic and social ramifications brought about by environmental challenges (Lee 2008; Hsu et al 2013).

Many firms in the UK’s manufacturing sector are increasingly adopting green supply chain initiatives due to market pressure mostly coming from downstream customers and consumers, regulatory pressures mostly coming from government agencies, and competition (Holt and Ghobadian 2009). In the current environmental legislation, government agencies and other pressure such groups such as Greenpeace and Friends of the Earth, are keen to ensure that manufacturing firms in the UK implement environmental management standards (ISO 14000 series), which assist organizations to move towards ecologically sustainable practices by (1) encouraging an internationally common approach to environmental management, (2) strengthening the organizations’ capacities to improve and measure environmental performance through continual system audits, and (3) improving international trade and removing trade barriers (Beamon, 1999).

Supply Chain Management (SCM)

Extant literature demonstrates that SCM appears in current discourse as a novel concept but the actual definitions of what it encompasses are at best blurred. As noted by Holt and Ghobadian (2009), SCM exhibits typical characteristics of a subject at initial phases of evolution including definitional multiplicity and perceived lack of conceptual clarity. Today, there is yet to be an unambiguous agreement as to the definition of SCM even though several academics have focussed interest on the development of an integrated definition of SCM by systematically evaluating a collection of proposed definitions found in numerous scholarly articles.

The present study adopts a definition presented by Lambert et al (1998) cited comprehensively in Holt and Ghobadian (2009, p. 934), who define “SCM as the integration of key business processes from end-user through original suppliers that provide products, services, and information that add value for customers and other stakeholders.” This particular definition bears similarities with the definition presented by Gibson et al (2005) also cited in Holt and Ghobadian (2009, p. 934), who view “SCM as encompassing the planning and management of all activities involved in sourcing and procurement, conversion, demand creation and fulfilment, and all logistic management activities.” In attempts to operationalize SCM, Lambert et al (1998) cited in Holt and Ghobadian (2009) identified three closely interrelated elements including (1) SC business processes – activities that produce a specific output of value to stakeholders, (2) SCM components – managerial variables by which business processes are integrated and managed across the SC, and (3) SC structure – the network of members of SC. These components will be evaluated in more detail within the GSCM context.

Green Supply Chain Management (GSCM)

Increasing environmental concerns and resource depletion challenges have caused governments and regulatory agencies operating at various levels to design and implement stricter regulations in their supply chains not only in the UK but also globally (Holt & Ghobadian 2009). Concurrently, members of the public are increasingly becoming aware of existing environmental challenges through formal and informal environmental education channels (Sarkis 2012). Given these socio-political shifts, firms within the manufacturing sector are slowly implementing environmental practices such as cleaner production and ISO 14001 certification, while others are adopting recent regulations such as the RoHS (Restrictions of the use of Hazardous Substances) directive to develop the capacity to broaden their environmental practices to their suppliers and customers (Zhu et al 2010). As a direct consequence of these efforts, a systematic approach called the green supply chain management (GSCM) is gaining recognition as the approach of choice in SCM. This systematic approach, which integrates environmental issues into SCM, has been increasingly accepted and implemented by forward-thinking organizations across the world through the use of such practices as green purchasing, customer cooperation with environmental considerations, eco-design, and investment recovery (Zhu et al 2010).

Available literature demonstrates that unlike traditional supply chain paradigms, “a green supply chain considers the environmental impacts of the production process as goods flow through the supply chain” (Hsu et al 2013). These authors further elaborate that green supply chains are inexorably different from traditional supply networks because they attempt to “close the loop” by adopting practices such as reuse, remanufacturing, and recycling products and materials using a common forward supply chain, with the view to reducing adverse environmental impacts (e.g., air, water, and land pollution) and wasted resources, from the acquirement of raw materials by organizations to the ultimate use and disposal of finished products by customers. Modern GSCM practices not only deal with environmental effects in forwarding supply chains dealing with the delivery of products and services to end customers but also place much focus on reverse supply networks dealing with recycling of used products, reuse, remanufacture, and reprocessing into raw materials (Hu & Hsu (2010).

Theoretical Underpinnings of SCM & GSCM

Many theories have been developed over the years to explain SCM and GSCM (Holt & Ghobadian 2009), but this section will only illuminate two of such theories – the resource dependence theory and the institutional theory. Several scholars have expounded on the resource dependence theory (RDT) to demonstrate the importance of GSCM in achieving firm competitiveness and image development. For example, Lee et al (2012, p. 1149) note that “in the resource dependence perspective, establishing inter-organizational collaboration is essential to gain competitiveness, especially as risks in the firm’s global supply chains have been amplified and relying solely on internal resources is not sufficient to compete with other global firms.” The RDT underscores the fact that only a few organizations are internally self-sufficient concerning their strategically critical resources, and hence they must rely on outside resources and partnerships with other organizations to safeguard their competitiveness. Consequently, firms that lack essential resources to realize their objectives must seek competitiveness by establishing mutually beneficial relationships with partner firms to obtain the needed resources.

According to the RDT, organizations also seek to minimize uncertainty and manage external dependence by purposely structuring their exchange relationships and instituting formal and informal linkages with other organizations not only to provide information about the activities of a particular organization which may have an impact on the focal organization but also to provide a communication channel for information and to offer a significant first step in obtaining commitments of support from important components of the environment (Lee et al 2012). In summary, therefore, firms are not only able to synergistically combine their own resource sets with the complementary resources of partner firms through the interdependence, hence developing a resource buddle that is unique and hard to imitate but is also able to obtain sustainable competitive advantage and enhanced organizational performance by cultivating such relationship-specific capabilities to become superior to what these firms may uniquely possess on their own (Lee et al 2012; Perotti et al 2012).

Lee et al (2012, p. 1152) acknowledge that “in the context of GSCM, inter-organizational collaboration is even more important for managing the internal and external coordination and cooperation to have the system successfully implemented throughout the whole supply chains.” This view is reinforced by Kim and Min (2011), who argue that for large manufacturing organizations to effectively implement GSCM-oriented initiatives including green purchasing, eco-design, and cooperation with customers, they need to develop good internal environmental management as well as effective and efficient external cooperation and coordination with suppliers and customers in their supply chains as illustrated in the RDT.

Consequently, as suggested by Lee et al (2012), manufacturing organizations need to make collaborative efforts with both the first- and the second-tier suppliers, along with other global buyer organizations, with the view to instituting and maintaining strategic green networks that will enhance compliance with environmental regulations as well as customer demands. Additionally, from the supplier firms’ perspective, it has been noted that adopting green supply chain initiatives could create potential business opportunities because many firms are demanding that their suppliers implement the initiatives and fulfill additional environmental requirements including environmental audit programs (Lee et al 2012).

On its part, “institutional theory asserts that firms adopt initiatives in order to gain legitimacy or acceptance within society” (Zhu & Sarkis 2007, p. 4335). This implies that the implementation of certain organizational practices such as green supply chain initiatives may indeed enhance an organization’s legitimacy or acceptance to operate by external actors such as government agencies and customers. The theory, which was originally coined by Jennings and Zardbergen (1995), holds that environment alignment may be influenced by three pressures: normative (pressure exerted by external stakeholders who have a vested interest in the firm such as customer requirements), coercive (pressure exerted by those in power such as government agencies), and mimetic (pressure occurring when a firm attempts to mimic the actions of successful competitors within the industry). The framers of the theory “argue that because coercive forces, through regulations and regulatory enforcement, have been the main pressures for environmental management practice adoption, firms within an industry have implemented similar practices” (Zhu & Sarkis 2007, p. 4338). This assertion demonstrates that the theory can be used to show that the realization of competitive advantage is a major concern for firms in the adoption of green supply chain practices.

Critical Factors for Fostering GSCM

According to Hu and Hsu (2010), many organizations are still facing challenges in adopting and implementing green supply chain initiatives as they are yet to discover bundles of drivers that may be used to foster the development of green supply chain initiatives through the development of organizational capabilities. Extant research demonstrates that a multiplicity of factors individually and collectively foster green supply chain adoption among manufacturing organizations in various countries across the world (Kim & Min 2011; Lee et al 2012). A critical analysis of green supply chain literature demonstrates that organizations adopt GSCM due to external stakeholder pressures and customer demands, top management commitment, organizational capabilities, a willingness by suppliers to participate in GSC initiatives, and government involvement (Lee 2008).

According to Lee (2008, p. 191), government involvement in green supply chain practices “includes a range of scope from direct technical and financial support to indirect encouragement with tax-cut incentives and to infrastructure development for environmentally friendly industrial complexes.” In organizational capabilities, “a firm may undertake a set of endeavours to minimise the negative environmental effects associated with the entire life cycle of its products or services, starting from design to acquisition of raw materials to consumption and product disposal” (Hsu et al 2013, p. 659). These authors concluded that the most important drivers for the adoption of green supply chain practices include regulatory measures, customer pressures, competitor pressure, and socio-cultural responsibility.

Current GSCM Trends & Practices

From the existing literature, it is clear that many manufacturing industries in the UK are increasingly realizing that environmental sustainability is one of the critical defining factors of a firm’s performance, competitiveness, and survival. In a study aimed at evaluating the extent and nature of implementing green supply networks in the UK manufacturing sector, Holt and Ghobadian (2009) found that although corporate environmental management has characteristically focussed on managing internal environmental practices, attention is increasingly shifting towards the management of a firm’s impacts outside the boundaries of the organization as demonstrated by the rising number of manufacturers who have shown concern in managing their upstream and downstream supply chain activities.

In assessing both the operational practices and pressures for green supply networks among 149 manufacturing firms in the UK, Holt and Ghobadian (2009) found that the most common practices for firms adopting GSCM were predicated upon internal cost-saving activities and that the size of the company does not have a direct impact on green supply chain initiatives even though smaller manufacturing companies reported limitations in adopting the initiatives. By comparison, Zhu and Sarkis (2004) study evaluating the relationships between GSCM practices and performance of manufacturing firms in the Chinese context found that three industries (automobile, power plants, and electronic industries) varied considerably in their adoption and implementation of GSCM initiatives. An important finding of Zhu and Sarkis’s study is that “it identified four kinds of GSCM practices, including internal environmental management, external environmental management, investment recovery and eco-design” (Huang et al 2012b, p. 148). Another study done in 2010 by Zhu and colleagues identified green purchasing, customer cooperation with environmental considerations, eco-design, and investment recovery as important GSCM practices for any forward-thinking organization within the manufacturing sector to consider adopting and implementing (Zhu et al 2010).

Within the manufacturing sector, green supply chain practices have largely been categorized in the literature as follows:

Green Purchasing

Available literature demonstrates that “green purchasing focuses on creating external linkages with suppliers to ensure that they are practicing sound environmental management activities” (Hsu et al 2013, p. 660). Green purchasing not only ensures that purchased products have advantageous ecological features, such as reusability, recyclability, and non-toxic materials, but also addresses concerns in waste minimization, material replacement through proper sourcing of raw materials, and non-use of hazardous products in manufacturing or purchasing processes (Hong et al 2009).

Since supplier involvement is a critical component in the attainment of environmental objectives, a stream of extant literature (e.g., Lee 2008; Hu et al 2010; Kim & Min 2011) acknowledges that environmentally proactive organizations are increasingly managing their suppliers’ environmental performance to warrant that purchased products are environmentally friendly and have been developed through environmentally conscious processes. Consequently, Hsu et al (2013, p. 660) argue that “green purchasing revolves around evaluation of suppliers’ environmental performance and providing advice to suppliers to improve their performance.” In the UK’s context, leading manufacturing firms such as SABMiller plc, Reckitt Benkiser, and Imperial Chemical Industries have all instituted green procurement practices with suppliers and are indeed encouraging them to obtain environmental certification such as the ISO 14001 (Holt & Ghobadian 2009).

Environmental Design

Most environmental design initiatives are concerned with internal and external collaboration on both product and process design, with the view to minimizing environmental impacts of products during the life cycle (Vachon & Klassen 2006). Hsu et al (2013, p. 661) acknowledge that while the prominence of the environmental design was primarily grounded on technical enhancements that could be undertaken on both products and processes to minimize environmental costs, organizations adopting GSCM are increasingly realizing that it is “essential to develop a healthy working relationship with consumers, suppliers and governmental authorities in order for design for environment to truly become an integral part of green supply chain initiatives.”

On their part, Zhu et al (2010) argue that an underlying pre-requisite for initiating environmental design practices is the external coercive, normative, and socio-cultural pressure that requires to be exerted on the firm to influence cross-functional cooperation among units both within and outside the boundaries of the organization. It has been reported in the literature that green purchasing does not characteristically have the same investment requirements as environmental design because it takes less time for additional staff training and less need for supporting technologies as required in supporting environmental design initiatives, particularly in response to customer or market pressures (Zhu & Sarkis 2007).

In a developed economy such as the UK, the external pressure for international regulatory compliance continues to oblige successive governments to make sure that manufacturing organizations have a built-in design for the environmental requirements in their processes and operations (Hong et al 2009). Consequently, as noted by Holt and Ghobadian (2009), UK manufacturing firms are bound to comply with the stringent legislation that is already in place in other countries if they expect to import their products to these countries. In their study, Hsu et al (2013) underline that some of the compliance concerns “range from life cycle assessment of all products, reduction in material and energy consumption use and ensuring that packaging materials are not only reusable but also have a significant portion of recyclable contents.” For instance, while Hewlett-Packard (HP) initiated an environmental design program for producing energy-efficient, hazardous free and recyclable products, Dell Corporation initiated an environmental stewardship program for designing energy-efficient products and took a conscious step to enhance upgradeability, reuse, and recyclability (Hsu et al 2013).

Reverse Logistics

This concept places much attention on “closed-loop systems with an aim to reuse, recycle and remanufacture materials” (Hsu et al 2013, p. 660). Reverse logistics concerns the recovery of discarded products (cores), and may also entail packaging, shipping, and backhauling the discarded materials to a centralized location with the view to either recycling or remanufacturing; hence the technicalities of reverse logistics oblige substantial attention by logistics professionals. As acknowledged by Holt and Ghobadian (2009), most manufacturing firms operating in European Union member countries are required to deal with backhauls to handle the waste packaging in their warehouses, and also to effectively resolve customer satisfaction issues when dealing with the recoverable materials. According to Tan et al (2013), stiff competition for raw materials is forcing many organizations operating in the United States to internalize such practices at home. On their part, Hsu et al (2013, p. 661) note that “there is already a transportation packaging law in Germany that requires the manufacturers to take-back all the pallets, cardboard boxes, stretch and shrink and strapping used to protect the products during shipment.” In major European countries such as Germany and The Netherlands, firms are prohibited by law to process their electronics waste by undertaking to landfill or to ship such waste to regions where a landfilling is still allowed, hence the need for them to initialize and adopt reverse logistics.

A study by the Council of Logistics Management cited in Hsu et al (2013) reports that reverse logistics is affected by three fundamental concerns, namely the structure of the network, the planning for material flows, and the classification and routing of materials. An important characteristic that is used to identify the reverse flows is that the collection of materials from the marketplace is a “supply-driven flow” rather than a “demand-driven flow” as witnessed in a forward flow logistics paradigm, resulting in the creation of a great deal of uncertainty among stakeholders in regards to the quantity, timing and condition of items (Huang et al 2012a; Hsu et al 2013). In the UK, a substantial number of firms within the manufacturing sector are continuously involving their suppliers, service contractors, vendors, distributors, and end-users in minimizing or eliminating adverse environmental impacts of their manufacturing activities through reverse logistics in a focussed attempt aimed at greening their supply chains to sustain competitiveness in the global market (Lee et al 2012).

GSCM & Firm Competitiveness

Extant literature shows that organizations worldwide are increasingly attempting to initiate new and innovative ways to enhance their performance and competitiveness (Perotti et al 2012), with a substantial number of them adopting GSCM as an operational initiative geared towards “enhancing their competitiveness through improvements in their environmental performance to comply with mounting environmental regulations, to address the environmental concerns of their customers, and to mitigate the environmental impact of their production and service activities” (Rao & Holt 2005, p. 898). Although some studies have reported a positive relationship between a firm’s competitiveness and proactive environmental strategies in terms of green supply initiatives, others have reported negative correlations depending on the moderating factors applied by the researchers as well as the heterogeneity of environmental management strategies initiated by the firm and industry.

For instance, Zhu and Sarkis (2004) extensively cited in Zhu & Sarkis (2007, p. 4335) found that “GSCM practice has a positive relationship with environmental performance, positive economic performance, and negative economic performance.” According to the authors, positive economic performance (competitiveness) is defined as benefits obtained through GSCM (e.g., decrease of cost for materials purchasing, a decrease of cost for energy consumption, a decrease of fee for waste management, a decrease of fee for waste discharge and decrease of fine for environmental accidents), whereas negative economic performance is defined as increased investment and costs (e.g., increase of investment, increase of operational cost, an increase of training cost and increase of costs for purchasing environmentally friendly materials). In their study, Zhu and Sarkis (2007) found that if market pressures cause manufacturing firms to adopt green supply chain initiatives such as eco-design and green purchasing practices, the environmental performance of these organizations is better; however, economic performance tends to worsen when market pressures cause the implementation of eco-design practices.

Another study concluded that although the existence of competitive pressures does not cause manufacturing firms who implement green supply chain initiatives to enhance environmental performance, the existence of competitive and mimetic pressures through the implementation of green purchasing, internal environmental management, and investment recovery, do cause positive economic performance, hence triggering competitive advantage (Kim & Min 2011). Research by Green et al (2006) identified the adoption of green supply chain initiatives as a strategic initiative that improves a firm’s overall market orientation, performance, and capacity to satisfy customers. An empirical study conducted by Green et al (2012) found a positive correlation between green supply chain practices and firm competitiveness in manifest variables of improved efficiency, quality improvement, productivity improvement, and cost savings.

This study also found a positive relationship between green supply chain initiatives and organizational performance, especially in key areas of new market opportunities, product price increase, profit margin, sales, and market share. Their study concluded that “the adoption of GSCM practices by manufacturing organizations leads to improved environmental performance and economic performance, which in turn, positively impact operational performance and organizational efficiency” (p. 290). In their study measuring supply chain efficiency from a green perspective, Kim and Min (2011) found that green supply chain initiatives led to value addition and competitive advantage for countries focusing on manufacturing or logistics as these practices led to a substantial reduction in environmental degradation. This view is reinforced by Jensen et al (2013), who found that GSM practices facilitate value creation and competitiveness by transforming supply chain outputs primarily considered as “waste” in isolation of one firm’s perception into use-value when evaluated from a chain perspective.

Despite the findings illuminated above, it remains unclear whether green supply chain initiatives lead to increased organizational competitiveness, especially within the context of the UK’s manufacturing sector. Rao and Holt (2005) reveal that although frameworks for achieving competitive advantage through the managerial standards of customer satisfaction, employee empowerment, quality cost systems, lean manufacturing, continuous improvement, and productivity enhancements are well documented in the literature, these measures fail to reflect the impact of green supply chain initiatives towards the overall competitiveness of the organization. This, according to the authors, “is not really surprising since competitiveness primarily interfaces between the firm and the market, and as long as the market does not seek environmental value-drivers in the products and services it purchases, environmental issues are not necessarily considered by organizations and consumers” (p. 906).

In their interviews with operations and general managers of selected manufacturing firms in the UK, Holt and Ghobadian (2009) found that manufacturers facing greater environmentally focussed regulatory pressures, as well as stiff competition from peers, tend to allocate more financial resources for these environmental practices, hence diminishing their economic performance. The study by Perotti et al (2012) found that the adoption of green supply chain initiatives by firms is often done in a reactive rather than a proactive manner, and it does not seem to be hinged on the search for competitiveness based on eco-sustainability due to low customer and shareholder awareness of the possible benefits of GSCM. This particular study concludes that a better set of indicators is needed to measure the effects of green supply chain initiatives on firm competitiveness and performance.

GSCM & Image Development

Many organizations the world over continue to be pressured by international customers, particularly image-conscious multinational organizations, to enhance their environmental image and performance with the view to seeking a balance between social issues and market factors in determining long-term success (Carter 2005; Zhu & Sarkis 2007). Although economic and market performance has traditionally and continues to be, the priority for many manufacturing firms, environmental performance through the adoption of green supply chain initiatives are increasingly becoming important as a fundamental fulcrum in enhancing the firm’s image and reputation, hence increasing their competitiveness (Green et al 1998).

The study by Zhu and Sarkis (2007) found that green supply chain initiatives among Chinese manufacturers results in a better firm image and reputation among customers but may diminish organizational economic benefits when market pressures exist. Lee et al (2012) found that the adoption of environmentally friendly SCM practices, including internal environmental management, green purchasing, cooperation with customers, and eco-design, had a positive impact on the firm’s image and reputation as suggested by customers and other shareholders, employee job satisfaction, operational efficiency, relational efficiency as well as business performance. This study noted that the reinforcement of a firm’s image and reputation was predicated upon such factors as cost savings and cycle time reduction for customers, enhanced environmental quality for communities around the firm, and overall customer values as well as individual objectives and aspirations of employees working in GSCM-compliant organizations.

From the above analyzes, it is evident the sets of indicators and measurement models used to evaluate the relationship between the adoption of green supply chain practices and firm competitiveness and image development were developed and tested mostly in China and other Asian countries (e.g., Rao & Holt 2005; Zhu & Sarkis 2007; Kim & Min 2011; Jensen et al 2013). The contribution of this study is therefore significant in that it is one of a few empirical studies (e.g., Holt & Ghobadian 2009) that have refined the measurement items to purposively investigate how green supply practices influence firm competitiveness and image development in the UK’s manufacturing sector.

Conceptual Framework

Extant literature demonstrates that a conceptual framework refers to an image or symbolic representation of an abstract notion that is not only intended to illustrate the direction of the study, but also the relationships of the different constructs that the researcher aims to investigate in the research process (Sekaran 2006), with the view to (a) observing behaviors, circumstances, interactions and environments, (b) examining these observations for themes, patterns, and categories, and (c) providing solutions to the key research questions based on what can be synthesized from the study findings (Creswell 2002). Consequently, Balnoves and Caputi (2001) acknowledge that the conceptual framework is modeled around perceived or imagined interrelationships between the independent and dependent study variables.

Based on the objectives and key research questions of the present study, therefore, the adoption of green supply chain practices and initiatives by firms in the UK’s manufacturing sector is the independent variable, while firm competitiveness and image development are the dependent variables. It is important to note that while the independent variable underscores the factor which is measured, manipulated, or chosen by the researcher to determine its relationship to or association with, an observed phenomenon of interest, the dependent variable underscores the factor which is observed and measured by the researcher to determine the strength or effect of the independent variable (Creswell 2002). In the present study, GSCM practices and initiatives are antecedent or precursor factors that are acknowledged to either directly or indirectly influence firm competitiveness and image development.

Summary

From the analysis of the relevant literature, it is evident that although an increasing number of UK’s manufacturing firms are embracing the concept of GSCM to get more international business opportunities, cut down on costs by enhancing supply chain practices, increase productivity, and promote the environmental image, the link between green supply chain practices and improvements in competitive advantage and image development for these organizations remains unclear. As demonstrated in the literature review, many research initiatives are exemplifying greening practices in the supply chain and others evaluating the economic and business impacts of the environmental performance of the firm; however, only a few studies have empirically tested if the adoption of these practices is yet to be translated into improvements in critical spheres of competitiveness, image building and economic performance within the UK’s context. Additionally, although some studies have reported a positive relationship between a firm’s competitiveness and proactive environmental strategies in terms of green supply initiatives, others have reported negative correlations depending on the moderating factors applied by the researchers as well as the heterogeneity of environmental management strategies initiated by firm and industry.

This review has identified green purchasing, customer cooperation with environmental considerations, eco-design, reverse logistics, and investment recovery as important practices that could be adopted and implemented by firms not only to enhance their image but also to sustain competitiveness and performance. However, it is important to empirically test the extent that these practices influence the firm’s image and competitiveness in terms of overall market orientation, performance, and capacity to satisfy customers, as well as in other manifest variables such as improved efficiency, quality improvement, productivity improvement, cost savings, environmental friendship, and employee satisfaction. Consequently, collecting and analyzing data on how these variables influence firm image and competitiveness in the UK context is a necessary prerequisite to facilitating the adoption of green supply chain practices not only by UK firms but also globally. As acknowledged in a report by the United Nations Development Programme cited in Hafkin and Huyer (2007, p. 26), “without data there is no visibility; without visibility, there is no priority.” It is this understanding that provides the impetus for the next chapter, which aims to demonstrate the techniques, approaches, and methodologies used to collect relevant data used in empirically testing how green supply chain initiatives to influence firm competitiveness and image development within the UK’s manufacturing sector.

Methodology

Introduction

The present research seeks to critically investigate how firms within the UK’s manufacturing sector use green supply chain initiatives to build their image and improve competitiveness within the industry. This chapter aims to provide information on the methodologies, approaches, and strategies used to answer the main research aim and objectives, in addition to detailing the justifications for selecting these methodologies. In essence, the chapter discusses

1. the research paradigm,
2. research design,
3. population and sample,
4. data collection instruments,
5. ethical considerations,
6. reliability and validity, and
7. data analysis procedures.

Research Paradigm

Although extant literature shows that research paradigms are sets of practices and beliefs (Biel et al 2007), they are fundamentally characterized by ontological, epistemological, and methodological differences not only in their approaches but also in their contribution to evidence and knowledge base (Wahyuni 2012). Denzin and Lincoln (1994) comprehensively cited in Welford et al (2011, p. 38-39) “described six main paradigms: constructionism, interpretivism, feminism, positivism, post-positivism and critical theory.” Since the theoretical perspective or philosophical underpinning of any research study is mainly predicated upon the methodology in research questions and can encompass any of the mentioned research paradigms (Wahyuni 2012), this study employs a post-positivist paradigm to develop knowledge on the topic of interest through exploring cause-and-effect relationships as well as employing statistical measures in evaluating the variables or phenomena of interest (Bryman & Bell 2007). This paradigm provides the researcher with the capacity to not only segregate variables and causally link them to establish the extent and frequency of relationships between the adoption of green supply chain practices and firm competitiveness and image development (Sekaran 2006), but also to determine which variables of interest to investigate and which data collection instruments to use, resulting in highly reliable and valid scores (Creswell 2002). These justifications inform the selection of the post-positivist research paradigm.

Research Design

The present study, which is quantitative in approach, uses a descriptive research (survey research) design to critically evaluate how green supply chain initiatives to influence competitiveness and image development for organizations in the UK’s manufacturing sector. Extant literature shows that quantitative methods can employ three research designs – descriptive, correlational, and causal-comparative – to collect and gather numerical data obtained through formal instruments (Sekaran 2006), and that descriptive research involves not only identifying the unique characteristics of the phenomenon of interest in the study but also examining the situation as it is without changing or modifying it (Creswell 2002). The justifications for employing a descriptive research design in this study, therefore, are that (1) it allows the researcher to collect important information about the issues under investigation (green supply chain practices, firm competitiveness, and image development) by simply posing questions to participants and tabulating their responses, (2) it enables the researcher to learn about a large population (UK’s manufacturing sector) by surveying a sample of supply and/or production executives working in manufacturing organizations, and (3) the study subjects are only measured once (Phillips & Starwaski 2008).

Since descriptive research studies typically use face-to-face interviews, telephone interviews, or previously written and pretested questionnaire instruments to collect primary data from participants (Sekaran 2006), the present study uses an online questionnaire instrument (survey approach) requiring study participants to respond to a series of statements or questions about the phenomenon of interest through the self-report technique. While the self-report technique is justified for application in this study because it is easy to use, less costly to manage, and provides participants with the needed flexibility to respond to the questionnaire items at their pleasure (Bryman & Bell 2007), it nevertheless runs the risk of intentional data misrepresentation because some participants may only be interested in generating a favorable impression to the investigator rather than outlining the issues of interest as best known to them (Creswell 2002). To minimize this challenge, the researcher ensured that all participants were comprehensively briefed about the nature and purpose of the study before engagement, with the view to ensuring that they provided an accurate description of the observations of the phenomena.

Target Population & Sample

The target population for this study comprises supply and/or production managers of the UK’s manufacturing firms registered with the Chartered Institute of Purchasing and Supply (CIPS). Specifically, the study targets supply and/or production executives in six manufacturing industries dealing with petroleum products, automobile, pharmaceutical products, rubber and plastic, heavy plants and machinery, as well as computers and electronics. The justification for selecting these industries is predicated upon the fact that these industries have expansive supply chains, hence more likely to degrade the environment in the absence of green supply chain practices (Holt & Ghobadian 2009). It is imperative to note that the researcher uses an online CIPS database to identify a pool of firms in the six manufacturing sectors (petroleum, automobile, pharmaceuticals, rubber and plastic, heavy plants, and computers and electronics), before contacting the management to seek for participation.

Upon achieving approval for participation, the researcher employs a simple random sampling technique to select a sample of 96 firms representative of the six manufacturing industries, implying that 16 firms are selected for each specific industry. This technique is justifiable as it ensures every organization in the six manufacturing industries has an equal chance of selection (Balnoves & Caputi 2001). Purposive sampling is used to specifically select 192 supply, operations, and/or production executives in the 96 firms, implying that 2 executives are selected for participation per firm. Sekaran (2006) acknowledges that participants in a purposive sample are selected to take part in a study based on two underlying factors: (1) compatibility to the study aim and objectives, and (2) demonstrated a comprehensive understanding of the phenomena under investigation.

Consequently, the justification for using purposive sampling to select supply and production managers is based on (1) their interest in the subject matter, making it less likely for them to ask a junior member of staff with limited knowledge to complete the questionnaire, and (2) their knowledge in the subject matter reduces the likelihood of common method variance. The purposive sampling technique has a distinct advantage over other non-probability sampling techniques in this type of study because it enables the researcher to focus attention on individuals who share particular characteristics or possess unique knowledge in particular areas (Creswell, 2002). A major disadvantage is that most supply and production executives choose to join CIPS, and this may infer views and perceptions that are not widely shared in the population; however, a balanced sample drawn from among interested executives is preferable to a completely random sampling to overcome this challenge. The inclusion (eligibility) criteria for the study sample include the following dimensions:

• Demonstration of adequate knowledge of green supply chain practices;
• Executives must be 21 years or older;
• Executives may be of either gender
• Executives must have worked for their respective firms for a period not less than three years, and;
• Executives must demonstrate readiness and willingness to take part in the study.

Data Collection

The questionnaire is used in this study as the primary data collection instrument to identify the GSCM practices adopted in the upstream and downstream supply chain activities of the sampled manufacturing firms, and if these practices lead to competitive advantage and image development. The researcher adopts Zhu and Sarkis (2007) questionnaire consisting of five GSCM practice survey items (internal environmental management, green purchasing, eco-design, cooperation with customers and investment recovery) and three GSCM performance items (environmental, positive economic, and negative economic), to investigate how the adoption of green supply chain practices leads to firm competitiveness. A five-point Lickert-type scale (“1=not considering it”, “2=planning to consider it”, “3=considering it currently”, “4=carrying out to some degree”, and “5=carrying it out fully”) is used to measure the adoption of GSCM practices, while performance/competitive shifts are measured using a five-point scale (“1=not at all”, “2=a little bit”, “3=to some degree”, “4=relatively significant”, and “5=significant”). Five survey items consisting of self-evaluation items and open-ended items have been developed to measure GSCM adoption and image development.

The questionnaire, containing 22 survey items to measure GSCM adoption practices, 17 items to measure GSCM performance/competitive changes, and five items to measure image development, underwent pretesting before the commencement of the data collection exercise not only to assess the structure, length, and appropriateness of the questions used but also to ensure that it provides greater content validity upon exposure to participants in the field (Phillips & Stawarski 2008). The justification for selecting the questionnaire as the primary data collection is predicated upon the issues of cost-effectiveness when administered online (Bryman & Bell 2007), ease of application and adaptability (Sekaran 2006), capacity to guarantee the anonymity of participants, as well as the freedom to include unstructured items to pursue new information which might be unknown to the researcher (Creswell 2002).

Reliability & Validity

In any quantitative research, the reliability of the measurement tool (questionnaire) is of substantial importance as it acts to minimize errors associated with the use of defective or ineffective measurement parameters (Balnoves & Caputi 2001). Reliability, which fundamentally refers to the “exactness” or “correctness” of a measurement technique (Phillips & Starwaski 2008), is used to demonstrate that the same set of data would have been collected from the study field each time in repeat assessments of an identical variable or phenomenon of interest due to consistency of measurement (Sekaran 2006). In the present study, reliability of the measurement instrument has been achieved through (a) pilot-testing the instrument to correct inconsistencies, (b) ensuring that measures included in the instrument only capture data that demonstrate the relationship between adoption of GSCM practices and firm competitiveness and image development, (c) utilizing multiple indicators in the Ticket-type scale to ensure the collection of quality unabridged data, and (d) enhancing the range of measurements included in the questionnaire instrument (Creswell 2002; Sekaran 2006).

Validity in quantitative studies refers to the suitability, meaningfulness, and usefulness of the deductions, propositions, and conclusions arrived at by the investigator based on the primary data collected from the field (Creswell 2002). In this study, internal validity, which guarantees the soundness of an investigation, has been attained through (a) utilizing a wide spectrum of content rather than a constricted one, (b) employing appropriate sampling techniques (simple random and convenience) to meet the interests of the study, (c) collecting data that are relevant to the needs of the study, and (d) employing a validated and reliable data collection instrument (Sekaran 2006). External validity for the present study has been achieved by including adequate sample size (120 supply and production executives) to guarantee that the study results are easily generalized to other study contexts not only in the UK but also globally.

Ethical Considerations

Ethical concerns have been noted during the data collection exercise and addressed as they arose not only to ensure the protection of human subjects but also to guarantee the study conforms to the University’s codes, regulations, and approvals for a study of this nature and scope. Before the commencement of the data collection exercise, a letter seeking permission to collect data from the executives of the sampled firms was dispatched to the CEOs. Once approval was given, an informed consent form with comprehensive information regarding the nature and purpose of the study, along with a detailed description of the rights of participants (e.g., right to informed consent, right to withdraw from the research study, and right to privacy), was prepared and emailed to participants to enlighten them about the purpose of the data collection exercise as well as their rights in the interaction. Lastly, the researcher ensured the anonymity of participants by downloading the returned questionnaires, coding them, and storing the instruments in a password-protected user file.

Data analysis

Since the present study employs a descriptive research design to investigate how the adoption of GSCM practices influences firm competitiveness as well as image development in the UK’s manufacturing sector, SPSS for Windows (Statistical Package for Social Sciences, version 19) has been used to analyze the descriptive data for mean scores, standard deviations, frequencies, and cross-tabulations. The findings are largely interpreted using mean scores of independent and dependent variables, pie-charts, bar-graphs, and normal text, with the view to empirically test how the adoption of green supply chain initiatives impacts upon firm competitiveness and image development within the sector.

Results & Discussion

Introduction

The present study is hinged on the urgent need to investigate how the adoption of green supply initiatives by organizations within the UK’s manufacturing sector affects their competitive orientation and image development. Owing to the fact the UK’s manufacturing sector has been on a backward trend in terms of its contribution to the country’s GDP, it is imperative to empirically test how organizations within this sector can apply green supply chain practices not only to build their image at a national and international level but also to enhance their economic performance and competitiveness. Towards the realization of the study’s aim and specific objectives, a survey was conducted on a sample of 192 supply, operations, and/or production executives drawn from selected industries within the manufacturing sector. It is important to indicate that 104 dully completed questionnaires were returned to the researcher, representing a 54.2% response rate.

Statement of Results

The main highlights of the study findings are not only interesting but informative too, and could be validly and objectively applied by organizations to expand their competitive orientation and enhance their image in the eyes of national and international customers. An analysis of demographic data demonstrates that the mean age of the study participants is 33.6 years, and 68 (65.4%) of the executives are male. A substantial number (58.2%) have worked in their organizations for a period of between five and seven years, implying that they are knowledgeable in supply chain systems and the GSCM practices adopted by their respective firms. The specific industries (petroleum, automobile, pharmaceuticals, rubber and plastic, heavy plants, and computer and electronics) in the manufacturing sector have been equally represented.

Knowledge on the Adoption of GSCM Practices

All the 104 participants acknowledge that their respective firms have adopted GSCM practices, but provide various reasons for doing so. Upon analyzing the multiple responses provided by the participants, it is clear that 68 (65.4%) of the executives think that adoption is necessary to fulfill regulatory requirements from the government, while another 45 (43.3%) mention customer demands as the major force behind the adoption of GSCM practices. Four in every ten executives (41.2%) think their firms have adopted the initiatives due to supply chain partners’ demands. The rest of the distribution is presented in the figure below.

This figure demonstrates that the adoption of GSCM practices by organizations within the UK’s manufacturing sector is still a reactive process as demonstrated by the fact most executives feel that their respective firms adopt green supply chain initiatives due to regulatory pressures and customer/supply partner demands rather than to sustain competitiveness and enhance the image and reputation of the firm.

Descriptive statistics (means and standard deviations) are employed to demonstrate how participants rank the use of GSCM initiatives grouped into five broad GSCM practice factors, namely internal environmental management, green purchasing, eco-design, cooperation with customers, investment recovery and reverse logistics. From the analysis demonstrated in Table 1, it is evident that most manufacturing firms are either considering adopting various GSCM practices or carrying them out to some degree. However, it can be noted that the adoption of eco-design practices and cooperation with customers for eco-design, cleaner production, and green packaging is still lagging in terms of adoption. As demonstrated in the table, most firms have put in place measures to ensure internal environmental management, investment recovery, and reverse logistics, while a sizeable number are still considering implementing eco-design practices in their supply networks. Overall, the sampled participants demonstrate a good understanding of GSCM practices and the level of commitment of their respective organizations in adopting the initiatives, though the results vary, probably due to the level of investment allocated to the adoption of specific GSCM practices. The findings may also vary due to the driving factors for GSCM adoption as well as the priorities set by the respective manufacturing organizations.

Table 1: Descriptive Statistics for Adoption of GSCM Initiatives.

Overall, in internal environmental management, most firms practice senior/middle-level management support for the adoption of GSCM initiatives (x= 4.57), have environmental management programs already in place (x= 4.01), have ISO 14001 certification (x = 4.21), and undertake cross-functional cooperation for environmental enhancements (x= 4.47). A sizeable number (12.5%) are still considering adopting total quality environmental management, and 10 (9.6%) are yet to consider the adoption of eco-labeling of products as an internal environmental management strategy. In green purchasing practices, most of the sampled executives acknowledge that their firms cooperate with suppliers for environmental objectives (x = 4.71), conduct an environmental audit for suppliers’ internal management (x= 4.19), and undertakes second –tier supplier environmentally friendly practice evaluations (x= 4.02). However, 16 (15.4%) of the executives say their firms are in their initial planning stages to start requesting ISO 1400 certification from suppliers. The GSCM practice indicators for eco-design, cooperation with customers, investment recovery, and reverse logistics are included in Table 2.

Table 2: Descriptive Statistics for Eco-Design, Cooperation with Customers, Investment Recovery & Reverse Logistics Practice Indicators

The table above provides useful insights into how UK manufacturing executives are aware of the principles and initiatives of GSCM. While many firms are still planning to consider implementing cooperation with customers for cleaner production and cooperating with customers for green packaging, it is evident that many have already put in place measures for investment recovery (sale of scrap and used materials, sale of excess capital equipment), and design of products for reuse, recycle and recovery of material or parts. A substantial number of the manufacturing firms are considering the adoption of other green supply chain practices, including designing products for reduced consumption of materials/energy, designing products to avoid or reduce the use of hazardous products, cooperating with customers for eco-design, sale of excess inventories and materials, and reusing, recycling and remanufacturing materials.

Adoption of GSCM Practices & Firm Competitiveness

Descriptive statistics are again employed to demonstrate the perceptions of the sampled executives regarding the role of GSCM in spurring competitive advantage, as well as the potential trajectories used by organizations within the manufacturing sector to sustain competitiveness by adopting green supply chain practices. Overall, most of the sampled executives believe that the adoption of GSCM practices is relatively significant in achieving competitiveness by decreasing costs for materials purchasing, decreasing costs for energy consumption, decreasing the fee for waste discharge, increasing international business opportunities and customers, as well as improving efficiency, quality of products and productivity of employees. However, it is important to note that the descriptive means of the study findings show that many executives are cautious that some of the GSCM practices may reduce a firm’s competitiveness in terms of increase in investment costs, operational costs, and costs for purchasing environmentally friendly raw materials. In environmental performance, which is intrinsically related to firm competitiveness, many of the sampled executives think that GSCM practices are of relative significance in reducing air emissions, reducing solid wastes, decreasing the consumption of hazardous or toxic materials, and enhancing a firm’s environmental performance. The findings for GSCM performance/competitive indicators are illustrated in Table 3.

Table 3: Descriptive Statistics for GSCM Performance/Competitive Indicators.

According to these findings, the major reason why many manufacturing firms take a reactive rather than a proactive approach in the adoption of green supply chain initiatives may be grounded on the perception that these practices contribute significantly to the increase in investment costs, operational costs, training costs, and other costs related to the purchasing of environmentally friendly raw materials. Overall, however, the perceptions of executives as to the role and potential of GSCM practices in enhancing and sustaining firm competitiveness appear promising, in large part because most of the executives are aware of the obvious benefits that come with “greening” their supply chains.

Adoption of GSCM Practices & Image Development

The application of descriptive statistics to analyze data in this section reveals that senior executives believe the image and reputation of an organization can be enhanced by GSCM efforts. As illustrated in Table 4, the results show that most executives agree with the statements that GSCM practices result in environmental friendship, reduced lead-to-cycle time for customers, enhancement of environmental quality for customers, and improvement in employee satisfaction and retention.

Table 4: Descriptive Statistics for GSCM Image Development Indicators.

When asked the way forward regarding the adoption of green supply chain practices and firm competitiveness as well as image development, 28 (26.9%) of the executives believe the government should provide more incentives for the adoption of GSCM practices by waiving application fees for environmental accreditation, 21 (20.2%) believe their respective firms should allocate more resources to the adoption exercise, while 18 (17.3%) suggest that awareness programs should be carried out to educate customers on how to different firms that have adopted GSCM practices from those that have not. The rest of the distribution is demonstrated in the figure below.

From the above figure, it is clear that some of the most important issues that need to be addressed for increased GSCM practice adoption include: (1) getting more incentives from the government, (2) allocation of more resources toward the adoption of GSCM initiatives, (3) development of awareness programs for GSCM adoption, (4) increased integration of supply chain networks, and (5) increased partnerships between organizations in the adoption of GSCM practices. It is important to note that these issues will in the long enhance firm competitiveness and image development arising from the successful implementation of green supply chain initiatives.

Discussion

The findings of the present study addressed the objectives and key research questions in several ways. In exploring the degree to which UK’s manufacturing firms are aware of the principles and initiatives of GSCM, it is evident that most organizations have put in place measures to improve internal environmental management, investment recovery, and reverse logistics, and others are in the process of implementing eco-design practices in their supply networks. It is important to note that the implementation of these practices varies across industries due to diverse drivers for GSCM adoption. Extant literature demonstrates that such drivers include external stakeholder pressures, customer demands, top management commitment, organizational capabilities, a willingness by suppliers to participate in GSC initiatives, and government involvement (Lee 2008; Kim & Min 2011; Lee et al 2012).

The findings also provide useful insights into how supply, production, and operations managers within the UK’s manufacturing sector perceive fundamental green supply initiatives including cooperation with customers for cleaner production, cooperation with customers for green packaging, investment recovery, design of products for reuse, recycle and recovery of material or parts, design of products for reduced consumption of materials/energy, design of products to avoid or reduce the use of hazardous products, cooperation with customers for eco-design, and sale of excess inventories and materials. In their study, Zhu and Sarkis (2007) found that these GSCM practices can lead to improved organizational and environmental performance. An empirical study conducted by Green (2012) also found a positive association between the adoption of these practices and organizational competitiveness in manifest variables of improved efficiency, quality improvement, productivity improvement, cost savings, new market opportunities, and improvements in product price, profit margin, sales, and market share. Overall, however, it should be noted that the study findings demonstrate that firms within the UK’s manufacturing industry are yet to fully adopt GSCM practices within their supply chain networks, and appears to follow the trend cited by Zhu and Sarkis (2007), that market pressures and regulatory requirements cause the differential adoption of GSCM practices such as eco-design and green purchasing.

The findings of the present study sufficiently address the perceptions of senior management regarding the role of GSCM in spurring competitive advantage, along with the potential trajectories employed by firms within the UK’s manufacturing sector to sustain competitive advantage by adopting GSCM practices. An analysis of the findings shows that the adoption of environmentally friendly SCM practices has a positive impact on the organization’s competitive orientation, especially in manifest aspects such as reducing the cost for materials purchasing, minimizing the cost for energy expenditure, reducing the fee for waste management, reducing the fee for waste discharge, lessening fine for environmental disasters, increasing business opportunities, and improvements in efficiency, quality of products and productivity of employees. Zhu and Sarkis (2007) study found that organizations stand to improve their competitive advantage and economic performance in some of the mentioned areas by adopting GSCM practices. Similarly, Rao and Holt (2005) found that the implementation of green supply chain practices benefits the organization’s competitive orientation through increased cost savings, more business opportunities from environmentally-conscious supply chain partners and multinational corporations, enhanced efficiency, and marketing exposure and synergy among business partners and lead corporations.

In image development, available literature demonstrates that adoption of GSCM practices contributes significantly to the enhancement of a firms image and reputation not only in terms of employee job satisfaction, cycle time reduction for customers, and enhanced environmental quality for communities around the organization (Lee et al 2012) but also in terms of enhancement of overall customer values and individual objectives of employees working in GSCM-compliant organizations (Zhu & Sarkis 2007). The present study has come up with similar findings as results show that GSCM practices result in an enhanced image and reputation for the organization in the eyes of customers and other supply chain partners in terms of environmental friendship, reduced cycle time for customers, enhanced environmental quality for customers and communities as well as improved levels of employee satisfaction and retention.

The present study contributes significantly to the body of knowledge regarding GSCM practices and their potential organizational outcomes within the manufacturing sector. The study findings will assist organizations to integrate green practices such as internal environmental management, green purchasing, eco-design, cooperation with customers’ investment recovery, and reverse logistics to enhance their competitive orientation not only in manifest variables such as cost savings for materials purchasing, energy consumption, waste treatment, and waste discharge, but also in terms of achieving improved efficiency, quality improvement, productivity improvement, and increased international business opportunities and customers. Additionally, the findings will assist organizations to enhance their image and reputation by adopting and leveraging GSCM practices.

An important finding of the present study is that the adoption of green supply chain practices by organizations within the UK’s manufacturing sector is largely a reactive process as demonstrated by the fact most executives feel that their respective firms adopt green supply chain initiatives due to regulatory pressures and customer/supply partner demands rather than to sustain competitiveness and enhance the image and reputation of the firm. This finding may be attributed to the fact most firms experience cost increases in investment, operations, and training in adopting GSCM practices. Other organizations cite the increase of costs for purchasing environmentally friendly materials as a major hindrance to the adoption of GSCM practices. In the literature, a study by Perotti et al (2012) concluded that the adoption of GSCM initiatives by organizations is often done in a reactive rather than a proactive manner, and it does not seem to be grounded on the search for competitiveness based on eco-sustainability due to low customer and shareholder awareness of the possible benefits of GSCM.

Ultimately, it is therefore important for interested stakeholders to develop strategies and approaches that will enhance the adoption of GSCM practices in organizations, to sustain a competitive orientation and maintain a reputable image to get more business opportunities from customers and other supply chain partners (Holt & Ghobadian 2009; Hu & Hsu 2010). In this regard, the present study finds that not only should the government provide more incentives to organizations in terms of waiving fees for environmental accreditation, but the organizations themselves should allocate more resources toward GSCM practices, and the relevant stakeholders should also develop awareness programs to empower customers in differentiating organizations that have fully integrated GSCM practices from those that have not.

Conclusions & Recommendations

Summary

The present quantitative study, utilizing a descriptive research descriptive, is grounded on the urgent need to empirically test how the adoption of GSCM practices by organizations within the UK’s manufacturing sector affects their competitiveness and image in the eyes of national and internal customers, as well as other supply chain partners. This study has been informed by two underlying issues. The first issue relates to the fact that despite the proliferation of hundreds of scholarly papers detailing the integration of environmental concerns within the supply chain management (Sarkis 2012), extant knowledge on how GSCM practices can be used to enhance competitiveness and build the firm image remains highly fragmented, especially within the manufacturing sector (Zhu et al 2010; Lee et al 2012). The second issue relates to the fact that in recent years, the UK’s manufacturing sector has been on a descending trend in terms of its contribution to the country’s GDP (Hutton 2012), hence the need to undertake a study investigating how the sector can promote their image and competitiveness through the adoption of GSCM practices.

Several conclusions can be drawn from the study findings. First, most firms within the UK’s manufacturing sector employ a reactive approach to adopt GSCM practices. Indeed, it has been demonstrated that most organizations invest in the initiatives due to regulatory and customer/supplier chain pressures rather than to sustain their economic performance and competitiveness. This view is consistent with a previous finding by Perotti et al (2012), who concluded that the adoption of GSCM practices is not grounded on the search for competitive advantage based on eco-sustainability due to low customer and shareholder awareness of the possible benefits of the initiatives.

The second conclusion is that most manufacturing firms in the UK are aware of GSCM practices and employ the initiatives in varying degrees in line with the drivers or factors that are informing the adoption process. Extant literature demonstrates that such drivers include external stakeholder pressures, customer demands, top management commitment, organizational capabilities, a willingness by suppliers to participate in GSC initiatives, and government involvement (Lee 2008; Kim & Min 2011; Lee et al 2012).

The third conclusion is that most organizations within the UK’s manufacturing sector have put in place measures to improve internal environmental management, investment recovery, and reverse logistics, though the implementation of specific factors of eco-design and green purchasing is still lagging. The findings of this study demonstrate that the delay of specific GSCM practices such as eco-design and green purchasing can be attributed to high investment operations and training costs, as well as other costs related to the purchasing of environmentally friendly materials.

The fourth conclusion is that senior managers are aware of the role of GSCM practices in spurring competitive advantage. Competitiveness, according to them, can be achieved through decreasing the cost for materials purchasing, decreasing costs for energy consumption, decreasing the fee for waste management, decreasing the fee for waste discharge, increasing national and international business opportunities, improving operational efficiency, enhancing the quality of products, and improving employee productivity. Other previous studies (e.g., Rao & Holt 2005; Zhu & Sarkis 2007) had found similar findings.

The fifth conclusion is that GSCM practices contribute substantially to the enhancement of an organization’s image and reputation in terms of environmental friendship, reduced cycle time for customers, enhanced environmental quality for customers and communities, and improved levels of employee satisfaction and retention. Zhu and Sarkis (2007) and Lee et al (2012) had also found similar findings while investigating firms for GSCM adoption in the South Asian context, implying that these benefits can also be replicated across manufacturing organizations in the UK.

Apart from these key findings, the present study makes an important contribution to the extant literature on GSCM practices by linking the adoption of green supply chain initiatives to the firm’s competitive orientation and image development. Many of the existing studies (e.g. Hong et al 2009; Hu & Hsu 2010; Huang et al 2012b; Hsu et al 2013) have attempted to investigate GSCM adoption and performance indicators in the Asian context, particularly in China. However, the present study uses the UK context to empirically test how GSCM practices influence firm competitiveness and image development. In this regard, the study has highlighted several issues that should be addressed for UK-based organizations to increase their uptake of GSCM practices, hence leverage their competitive advantage. The most important issues include (1) involvement by the government in the provision of more incentives such as waiving the fees required for environmental accreditation, (2) allocation of more resources by organizations to enhance the adoption of GSCM practices, and (3) development of awareness programs to empower customers in not only differentiating organizations that have fully integrated GSCM practices from those that have not, but also understanding the immense benefits that can be achieved through the adoption of the practices.

Recommendations and Implications for Practice

Based on the key study findings, it is recommended that stakeholders and government agencies should come together to develop a policy framework that would enhance the adoption of GSCM practices for firms to achieve competitive advantage rather as a reactive means to meet the regulatory requirements and customer and/or supplier partners’ demands. Such a framework must address the issues raised by participants as to why more organizations are hesitant to adopt GSCM practices. For example, the framework should include strategies that could be used by organizations to lower their investment, operational, and training costs while adopting GSCM practices.

The study also recommends the waiving of environmental accreditation fees charged by various government agencies so that more firms can broaden their scope in the adoption of GSCM practices. From the findings, it is evident that GSCM practices bring to the organization immense competitive benefits that, if properly tapped, will not improve the economic performance of the firms and the country’s GDP, but also reduce environmental degradation and enhance the quality of life for communities living around the manufacturing firms.

Lastly, government agencies and interested stakeholders should develop awareness programs targeted at enlightening the customers about the important benefits related to GSCM adoption. This way, customers will buy more from firms that have fully integrated green practices into their supply chains, hence not only enhancing their competitiveness and reputation but also ensuring a safer and cleaner environment for communities that are near the manufacturing organizations.

This study implies that GSCM experiences among UK’s manufacturing organizations show that reactive pressures, especially government regulations and customer demands, are the main force behind the adoption of GSCM practices. This orientation needs to change by encouraging organizations to adopt GSCM practices so that they may increasingly leverage their competitive advantage through decreasing the cost for materials purchasing, decreasing costs for energy consumption, decreasing the fee for waste management, decreasing the fee for waste discharge, increasing national and international business opportunities, improving operational efficiency, enhancing the quality of products, and improving employee productivity. Another implication of this study is that GSCM experiences among UK manufacturing firms can be disseminated to other manufacturers in developing countries not only to enhance their competitiveness in the above-mentioned areas but also to improve their image and reputation, hence gain more business opportunities from environmentally-conscious multinational corporations.

Study Limitations

The present study has been limited by financial constraints and time resources, not only obliging the researcher to use a small sample size but also to use online protocols to collect data. Consequently, it may be difficult to generalize the study findings to a larger population of manufacturing organizations in the UK or even abroad because of the researcher’s 104 executives from six manufacturing industries. Upon reflection, it is felt that a larger survey with a larger set of responses would have provided more representative findings which can then be generalized to a larger population. Additionally, upon reflection, it is felt that one-on-one interactions with the study participants would have resulted in data that are rich in context as opposed to the use of online questionnaires to collect data.

Future Research Directions

Although the present study has empirically tested how the adoption of GSCM practices affects the image and competitiveness of organizations within the UK’s manufacturing sector, an investigation of this relationship requiring further data acquisition and theoretical justification is warranted. Consequently, future research can attempt to use more objective data and theories of competition to empirically measure how the adoption of GSCM practices affects the competitive advantage of manufacturing organizations in manifest variables such as share price, market share, and return on assets, and if this relationship is affected by firm size or type of industry within the manufacturing sector. It is important to mention that future studies must be broad-based so that findings are not only more representative but can also be generalized to a wider population.

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