Abstract
This study investigates the relationship between environmental orientation and firm performance with the mediating role of green supply chain management (GSCM). This study uses a survey questionnaire to collect data from 247 CEOs from Chinese small and medium-sized enterprises (SMEs). Structural equation modeling is used to analyze data and test hypotheses. Empirical results show that internal and external environmental orientations are positively related to the three elements of GSCM, namely, environmental selection, monitoring, and collaboration with suppliers which are also positively related to firm performance. In addition, results show that environmental selection, monitoring, and collaboration with suppliers mediates the relationship between internal and external environmental orientations and firm performance. The findings provide important implications for academic researchers and business managers in planning and implementing environmental strategies. In terms of theoretical implications, this study sheds a new light to current knowledge about the effect of environmental orientation on GSCM and firm performance of SMEs. This study also provides empirical evidence to clarify the mediating mechanism of GSCM in the link between environmental orientation and firm performance of SMEs. In terms of practical implications, this study provides knowledge for managers of SMEs to better understand the important role of environmental orientation and green supply chain management. Findings of this study provide knowledge for managers of SMEs to make their business policies better.
Highlights
Climate change and environmental deterioration cause public concerns for environmentally responsible behaviors [1]
The results show that internal environmental orientation was significantly and positively related to environmental selection of suppliers (r = 0.16, p < 0.01), environmental monitoring of suppliers (r = 0.05, p < 0.01), and environmental collaboration with suppliers (r = 0.15, p < 0.01)
The total effect of external environmental orientation on firm performance was statistically significant. These results show that environmental selection, monitoring, and collaboration with suppliers partially mediate the relationship between external environmental orientation and firm performance
Summary
Climate change and environmental deterioration cause public concerns for environmentally responsible behaviors [1]. Firms today are under increasing pressure from stakeholders and society to adopt an environmental orientation [2]. Customers demand more environment-friendly products, governments implement increased control and tightened regulations over business activities, and communities expect firms to protect and maintain green ecosystems. These pressures lead to a growing concern that firms should consider sustainability and environmental elements in their current production modes and business activities [3]. Given the importance of the above issues, firms may reluctantly engage in environmental activities [3]. Due to the need to balance economic and environmental performance [4].
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