The Mediating Role of Structural Social Capital on the Relationship Between Internal Environmental Management and Sustainable Performance

Abstract

Increasing demand for green initiatives and issues of sustainability has recently necessitated a paradigm shift in the way firms, particularly those in the manufacturing sector, conduct their operations. Therefore, Green Supply Chain Management (GSCM) was developed to integrate environmental management approaches within manufacturing organizations. GSCM's internal environmental management and social capital through collaboration of supply chain partners can be viewed as fundamentally comparable in that social capital is accumulated through the process of firms constructing social interactions in current networks. However, the number of GSCM studies that incorporate a social capital approach, especially empirical studies, remains limited in term of quantity. To determine the relationship between internal environmental management, structural social capital, and sustainable performance, this study was performed. This study aims to evaluate the mediating effect of structural social capital on the relationship between internal environmental management and sustainable performance. Malaysian manufacturing companies that are ISO14001 accredited were surveyed. Respondents submitted a total of 106 questionnaires that were deemed suitable for data analysis using Partial Least Squares-Structural Equation Modelling (PLS-SEM). Internal environmental management was found to have a significant correlation with structural social capital. Additional research utilizing PLS bootstrapping has revealed that structural social capital significantly mediates the relation between internal environmental management and sustainable performance. In addition to contributing to theoretical knowledge, the results would be useful for delivering new insights to management regarding their environmental goals and maintaining successful performance under the pressure of stakeholders, customers, and environmental standards.