Green supply chain management practices and its impact on organizational performance: evidence from Indian manufacturers

Abstract

PurposeThe purpose of this paper is to explore the impact of five dimensions of green supply chain management (GSCM) practices (i.e. internal environmental management, green purchasing, cooperation with customers, eco-design, and investment recovery) on three dimensions of organizational performance (i.e. environmental, economic and operational performance).Design/methodology/approachData were collected based on a cross-sectional survey of managers of 160 manufacturing firms in India. Structural equation modelling was used to test the influence of GSCM practices on each of the organizational performance outcomes.FindingsExcept for internal environmental management and green purchasing, all other GSCM dimensions are found to significantly impact at least one of the performance dimensions, either directly or indirectly. The results highlight that investment recovery practice is a key predictor of environmental performance, whereas eco-design is a key predictor of operational performance. The structural equation modeling result also suggests that GSCM do not directly affect economic performance, but can improve it indirectly.Research limitations/implicationsSince data was collected from managers of manufacturing firms on the basis of their subjective evaluations, future research studies should employ objective performance indicators for analysis. Also, the study did not consider some dimensions of GSCM practices, which can be included in future studies.Practical implicationsManufacturing firms should implement GSCM practices not just because of the pressure from regulatory bodies but also to elevate their environmental, operational and economic performance. The proposed model in this paper suggests practitioners which GSCM factors are driving these performance changes and supports the building of a roadmap for GSCM implementation in their organization.Originality/valueManufacturing firms from four different operating sectors, namely automotive, electrical and electronics, process and machinery sectors are the respondents. The originality of the paper lies in testing the influence of GSCM practices on organizational performance in a novel context, where most GSCM initiatives fail for one reason or another. Furthermore, the assessment of the interaction between five constructs of GSCM practices and three constructs of organizational performance in the Indian manufacturing context offers unique conceptual contribution to the researches in the GSCM field.