Sustainability orientation, supply chain integration, and SMEs performance: a causal analysis

Abstract

PurposeThe pressure of globalization has raised social concerns related to the protection of the environment, forced companies to use sustainability as a strategic weapon to fulfill the legal obligations and achieve overall competitiveness. It is reported that small- and medium-sized enterprises (SMEs) are globally responsible for approximately 70 percent of the industrial pollution, justifying urgent attention to the operations of these businesses. The purpose of this paper is to analyze the impact of sustainability orientation (SO) and supply chain (SC) integration implemented by SMEs on their sustainable procurement (SP) and design. Moreover, this study examines how SMEs’ SP and design affect their environmental and cost performance (CP).Design/methodology/approachThe authors develop a comprehensive model to test the relationships among SC, SC integration, SP, sustainable design (SD), environmental performance (EP) and CP at the SMEs level. The authors investigate the relationships of the mentoned factors by a data set that is collected from 358 Indian manufacturing SMEs.FindingsThe results indicate that in the SMEs’ context: SO positively influences both SP and SD; external integration positively affects SP; internal integration positively affects SD; SP positively influences EP and has not impact on CP; and SD positively influences both EP and CP.Originality/valueThis study provides a broad view of the relation between driving factors that may direct SMEs toward a better sustainability performance and offers practical managerial insights into these important business entities.