The impact of external pressure and sustainable management practices on manufacturing performance and environmental outcomes

Abstract

Purpose The purpose of this paper is to investigate the direct effect of external pressure on environmental outcomes and manufacturing performance and examine the mediating effect of sustainable management practice. Design/methodology/approach This study draws upon institutional theory and resource-based view to understand how factors such as external pressure and sustainable management relate with environmental outcomes and manufacturing performance. The model specifies previously unexplored direct and mediating relationships between external pressure, sustainable management, environmental outcomes and manufacturing performance. The empirical analysis is based on data collected from the sixth edition of the International Manufacturing Strategy Survey. The research hypotheses are tested using structural equation modelling. Findings Results show that while there is a significant direct and mediating relationship between external pressure, adoption of formal sustainability programmes and environmental outcomes, such significant relationships do not exist with manufacturing performance. Practical implications The study shows that external pressure can influence adoption of sustainable practices but this does not necessarily lead to an improvement in manufacturing performance. As such managers need to identify the actual benefits of sustainability and weigh them up against costs of implementing such programmes. Originality/value The relationship between the adoption of sustainable practices and organisational performance is a complex one. In contrast to previous studies, this study found that while external pressure and sustainable management relate positively with environmental outcomes, no such relationship exists with manufacturing performance. This raises a number of question marks over naive implementation of sustainable strategies.

Sustainability Impact on Manufacturing Operational Performance: An Empirical Investigation

“…Rao and Holt, 2005;De Giovani, 2012;Green et al, 2012b;Yu et al 2014;Adebanjo et al 2016;Jabbour et al, 2016;), although they can also be analyzed separately (e.g. Schoenherr, 2012).…”

“…Yu et al (2014, p.685 Adebanjo et al (2016), Ajamieh et al (2016), Hsu et al (2016), Kirchoff et al (2016), Lu et al (2016b), Green et al (2015), Amann et al (2014), Mas'od and Chin (2014), Nejati et al (2014), Perramon et al (2014), Hajmohammad and Vachon (2014), Jabbour et al (2013), Youn et al (2013), Choi et al (2013), Choi and Zhang (2012), Lee (2012), Yang et al (2010) Commitment to sustainability (leadership and employees) (8 studies) Dubey et al (2016), Glavas (2016), Benn et al (2015), Wang (2014), Mellat-Parast (2013), Paille and Boiral (2013), Robertson andBarling (2013), Chen (2011) Environmental performance (8 studies) Gopal and Thakkar (2016), Khaksar et al (2016), Golini et al (2014), Lin et al (2014), Sambasivan et al (2013), De Giovani (2012), Green et al (2012), Pullman et al (2009) External Sustainability Management (e.g. SC Collaboration) (7 studies) Graham and Potter (2015), Luzzini et al (2015), Chen and Hung (2014), Yang et al (2013), Wittstruck and Teuteberg (2012), Zhu et al (2012), Paulraj (2011) Green innovation (7 studies) …”

“…In a context of economic crisis, operations managers tend to narrowly focus on cost reduction, within the realm of a "short-term culture" (Miles, 1993;Gigler et al, 2014;Buil et al 2016). Implementing waste recycling programs, training employees, and subscribing to certifications require significant capital disbursement and costly changes to production processes and equipment (Cruz and Wakolbinger, 2008;Gimenez et al, 2012;Adebanjo et al, 2016). Porter (1991) was among the first in the literature to challenge the common sense that complying with regulations is harmful to the competitiveness of firms.…”

“…Nonetheless, the win/win situation of a positive correlation between improved sustainability and performance met with mixed results in empirical research (Wagner et al, 2001;Zhu and Sarkis, 2004;Graham and Potter, 2015;Szasz et al, 2016;Adebanjo et al 2016). Some authors found a negative effect of sustainability practices adoption on overall firms' performance (e.g.…”

“…Hart and Ahuja, 1996;Montabon et al, 2000;Rao and Holt, 2005;Paulraj and De Jong, 2011;De Giovanni, 2012;Dam and Petkova, 2014). These contradictory results are at least partly due to the use of different constructs and of different operational measures of sustainability (Azevedo et al, 2011;Wu and Pagell, 2011;Adebanjo et al, 2016) and also because sustainability effects may have a time lag.…”