Corporate Social Responsibility and Environmental Management

Corp. Soc. Responsib. Environ. Mgmt. 15, 322337 (2008)

Published online 14 February 2008 in Wiley InterScience
(www.interscience.wiley.com) DOI: 10.1002/csr.173

The Role of Organizational Size in the Adoption

of Green Supply Chain Management Practices
in China
Qinghua Zhu,1* Joseph Sarkis,2 Kee-hung Lai3 and Yong Geng1
1
School of Management, Dalian University of Technology, Dalian, Liaoning Province,
Peoples Republic of China
2
Graduate School of Management, Clark University, Worcester, MA, USA
3
Department of Logistics, The Hong Kong Polytechnic University, Hung Hom, Kowloon,
Hong Kong, Peoples Republic of China

ABSTRACT
Economic globalization, increasing resource scarcity and environmental degradation have
caused green supply chain management (GSCM) to become an important competitive
approach for organizations involved in international trade. Using survey data collected from
over 200 China-based organizations, we compare the implementation levels of ve GSCM
practices among small-, medium- and large-sized organizations in China. We nd that
medium- and large-sized organizations are more advanced than their smaller-sized coun-
terparts on most aspects, but not necessarily all, of these GSCM practices. Future research
includes possible studies on GSCM practices and promotion, especially targeting small
manufacturing organizations. In addition, the inuence of globalization and foreign direct
investment, especially after Chinas entry into the WTO, could be more carefully examined.
Copyright 2008 John Wiley & Sons, Ltd and ERP Environment.

Received 8 June 2007; revised 20 December 2007; accepted 21 December 2007

Keywords: environmental practices; rm size; implementation, empirical study

Introduction

G
LOBALIZATION AND COMPETITION AMONG NETWORKS OF ORGANIZATIONS ARE COMPETITIVE CHARACTERISTICS EMERGING
in developing countries such as in China. As a growing manufacturing powerhouse, China is a part of
the global supply chain. Cost and competitive advantages can be gained through embracing supply chain
management (SCM) in this environment (Christopher, 2005). Industrial and organizational activities
causing resource depletion and increasingly detrimental environmental situations have stipulated stricter legisla-
tion, regulations and public scrutiny. Inevitably, organizational tradeoffs among economic and environmental
efforts must be assessed and implemented (Pagell et al., 2004). Green supply chain management (GSCM) has
emerged as a management approach in response to these pressures (Zhu et al., 2005; Lopez et al., 2005).

* Correspondence to: Qinghua Zhu, School of Management, Dalian University of Technology, Dalian, Liaoning Province 116024, Peoples
Republic of China. E-mail: zhuqh@dlut.edu.cn

Copyright 2008 John Wiley & Sons, Ltd and ERP Environment
Organizational Size and Green Supply Chain Management Practices in China 323

Corporate environmental management practice has seen increasing study in most developed countries but with
less focus on emergent economy countries. Many of these emergent economy countries are becoming more
industrialized as manufacturing jobs are outsourced to them and their own consumer markets grow. China is
characterized by profound manufacturing growth, which is expected to continue through the remainder of this
decade (Hitomi, 2003). Chinese manufacturers growth and industrial practices have serious regional, global
logistics and environmental implications. In handling the increasingly large volume of physical ows for manu-
factured products in trade, it is essential for Chinese manufacturers to have a management system to meet and
balance both economic and environmental goals in performing their logistics processes.
Additional factors such as foreign direct investments, joint ventures, foreign and supplier relationships and
World Trade Organization (WTO) membership bring further pressures for logistics and environmental planning
and actions in China. Even with these nascent situations, investigation of corporate environmental practices in
Chinese business logistics has been limited, but continues to grow (Hong et al., 2004; Zhu et al., 2008). Given
Chinas role in the global economy and its environmental implications, the environmental aspects of business
logistics in China are still under-explored. GSCM is relatively novel and considered an innovation within
China.
To help address these research gaps and advance the research in logistics and the environment, this paper
seeks to examine the adoption of GSCM by Chinese manufacturers as a business logistics innovation and
investigate whether organizational size plays a role in the adoption of GSCM. Organizational size is a critical
characteristic because previous studies have observed that what works and is applied in large rms may not be
applicable to smaller organizations (Chen and Hambrick, 1995). Larger companies increasingly adopt
environmental related practices such as corporate social responsibility for managing their Asian supply chains,
especially in China (Welford and Frost, 2006). The issues of organizational size and environmental relationships
(for example, environmental performance, adoption of practices, managerial environmental opinion) have typi-
cally been studied with organizational size as a control variable. Also, the results have been mixed on whether
organizational adoption of environmental practices relates to organizational size. We explicitly study this organi-
zational size effect in relation to GSCM and its various underlying factors and practices. GSCM in this investiga-
tion includes ve major practice factors (Zhu and Sarkis, 2004), i.e. internal environmental management (IEM),
green purchasing (GP), customer cooperation with environmental concerns (CC), investment recovery (IR) and
eco-design (ECO) practices (see Table 1 below for the type of item we have used to dene each factor).
A study background discussion provides details on the sample and the methodology used to gather empirical
data to test the organizational size effect. A comparative analysis to determine the differences in adopting GSCM
among small-, medium-, and large-sized organizations will then be presented. The results and their implications
are discussed with future research directions identied.

Organizational Size and Environmental Management

SCM and GSCM

SCM has been dened as

. . . all activities associated with the ow and transformation of goods from raw materials (extraction), through
the end user, as well as associated information ows. Materials and information ow both up and down the
supply chain . . . (Handeld and Nichols, 1999, p. 2).

In this denition, SCM is considered as a business process. Increasingly, the ecosystem thinking and
environmental concerns have been integrated into the following SCM denition:

The term supply chain describes the network of suppliers, distributors, and consumers. It also includes
transportation between the suppliers and consumers, as well as the nal consumer, the environmental effects
of product development, manufacturing, storing, transporting, and using a product, as well as disposing of
the product waste, must be considered (Messelbeck and Whaley, 1999, p. 42).

Copyright 2008 John Wiley & Sons, Ltd and ERP Environment Corp. Soc. Responsib. Environ. Mgmt. 15, 322337 (2008)
DOI: 10.1002/csr
324 Qinghua Zhu et al.

Measurement items Constructs

IEM GP CC IR ECO

Commitment of GSCM from senior managers (IEM1) 0.869a

Support for GSCM from mid-level managers (IEM2) 0.876
Cross-functional cooperation for environmental improvements (IEM3) 0.830
Total quality environmental management (IEM4) 0.883
Environmental compliance and auditing programs (IEM5) 0.822
ISO 14001 certication (IEM6) 0.678
Environmental management systems exist (IEM7) 0.787
Providing design specication to suppliers that include environmental 0.746a
requirements for purchased item (GP1)
Cooperation with suppliers for environmental objectives (GP2) 0.795
Environmental audit for suppliers internal management (GP3) 0.765
Suppliers ISO14000 certication (GP4) 0.677
Second-tier supplier environmentally friendly practice evaluation (GP5) 0.777
Cooperation with customer for eco-design (CC1) 0.796a
Cooperation with customers for cleaner production (CC2) 0.861
Cooperation with customers for green packaging (CC3) 0.837
Cooperation with customers for using less energy during product transportation 0.701
(CC4)
Investment recovery (sale) of excess inventories/materials (IR1) 0.803a
Sale of scrap and used materials (IR2) 0.772
Sale of excess capital equipment (IR3) 0.878
Design of products for reduced consumption of material/energy (ECO1) 0.815a
Design of products for reuse, recycle, recovery of material, component parts 0.824
(ECO2)
Design of products to avoid or reduce use of hazardous of products and/or their 0.688
manufacturing process (ECO3)

Table 1. Results of conrmatory factor analysis for GSCM

a
Initially xed at 1.0 for the purpose of estimation.

GSCM can be dened as integrating environmental concerns into SCM. Originally, GSCM was bounded to
purchasing issues. GSCM is dened as integrating suppliers into environmental management processes (Walton
et al., 1998; Hervani et al., 2005). GSCM consists of the purchasing functions involvement in activities that include
waste reduction, recycling, reuse and the substitution of materials (Narasimhan and Carter, 1998). However, more
broadly, operations, marketing and logistics have been integrated into the GSCM framework. This paper uses the
increasingly accepted concept of GSCM, which includes IEM, GP, CC, ECO and IR (see, e.g., Zhu and Sarkis,
2004; Narasimhan and Carter, 1998).

Organizational Size and Environmental Practice

A study of organizational size differences helps to determine whether resources and capabilities associated with
different sized organizations play a role in adopting GSCM practices. Determining whether smaller organizations
are adopting at greater, lesser or even equal rates as compared to medium and larger organizations for environ-
mental practices sets the foundation for practical and research issues. Differences among these organizations will
inuence different strategies that can be applied by supply chain and logistics partners, investors, professional
organizations and government policy makers to aid smaller or larger organizations or both when seeking to adopt
these GSCM practices and innovations. For example, if larger organizations are adopting practices earlier
than their smaller counterparts, then a diffusion mechanism through collaborative partnerships with smaller

Copyright 2008 John Wiley & Sons, Ltd and ERP Environment Corp. Soc. Responsib. Environ. Mgmt. 15, 322337 (2008)
DOI: 10.1002/csr
Organizational Size and Green Supply Chain Management Practices in China 325

organizations may be a policy that should be encouraged. Yet, if all organizations seem to be lagging in a particu-
lar GSCM practice adoption, supply chains, umbrella professional groups or even regulatory agencies may play a
larger role in diffusing these innovative practices.
Environmental research has traditionally focused on very large organizations in developed countries (Gil et al.,
2001). We expand this research to incorporate small and medium sized organizations within a developing country.
From a research perspective, these ndings will help to shed an exploratory light on whether explanatory theories
related to organizational size (i.e. resource based or resource dependency) can be used to investigate its relation-
ship to adopting GSCM and for what specic practices further investigation should be pursued.
The issues of organizational size and environmental relationships (for example, environmental performance,
adoption of practices, managerial environmental opinion) have typically been studied with the perspective of orga-
nizational size as a control variable. We explicitly study this organizational characteristic effect based on various
factors of GSCM. In the more general sociological literature, very few studies have looked at organizational size
and the respective environmental performance or practices (Grant et al., 2002). Much of the literature in this area
has been relegated to management research.
Organizational size inuence and differences on environmental management practice have different potential
theoretical explanations. A resource-based theory perspective (e.g. Barney, 1991) argues that larger rms often have
more nancial resources and capabilities to handle environmental issues. Also larger rms face more direct pres-
sures due to their visibility and external (to China) economic relationships, and are typically held to higher stan-
dards to meet the social expectations for acceptable environmental performance (Russo and Fouts, 1997). Others
have posited that what may work for larger organizations may not be appropriate for smaller organizations and
this may be a reason for differing practices (Pimenova and van der Vorst, 2004).
Organizational size and corporate environmental practice adoption in China has seen some studies, with results
showing that Chinese rms size had a small positive inuence on eco-sustainability orientation (Barnzei and
Vertinsky, 2003). Yet, in other countries, the organizational size relationship with eco-sustainability was stronger
(Barnzei and Vertinsky, 2003). The signicant effect of organization size on environmental strategy may be due
to resource-based aspects such as the greater capacity or greater slack characteristics of larger organizations to aid
in absorbing the risks and unpredictability associated with voluntary environmental strategies, or to these organi-
zations higher visibility (and hence, higher external scrutiny). As knowledge, practices, systems and routines at
the business and natural environment interface become more widely diffused, smaller organizations may begin
to adopt specic environmental strategies (Sharma, 2000). Larger organizations also adopt such practices as par-
ticipating in voluntary programs (e.g. Responsible Care) (King and Lenox, 2000), and these larger rms typically
performed better on environmental performance (Russo and Fouts, 1997). Yet, not all aspects of environmental
practice adoption have been found to relate to organizational size (Christmann, 2000). These mixed results are
additional reasons to further tease out which practice adoptions may or may not be inuenced by organizational
size.
Extension of the resource-based view across the supply chain through resource dependence theory (Emerson,
1962) can help explain the variations for rms of different sizes in adopting environmental practices. In SCM,
dependences are often created between the exchange partners (Cook, 1977). Such dependences often enable the
exchange partners to exercise some degree of control or inuence over the resource environment or the rms
exchange partners for performance gains. As environmental awareness increases, adopting GSCM can be viewed
as an attempt by larger rms to improve supply chain performance as they depend on the chain resources to grow.
Once a dominant rm embraces GSCM, other chain members as dependent rms need to follow and comply with
their dominant partners imposition of the requirement to adopt the environmental practices. Due to their lack of
capital and know-how, smaller rms would seek to comply with the environmental requirements of their larger
partners for their continued access to resources in the supply chain. In the context of SCM, smaller rms seeking
environmental practices would rely on their larger chain partners for sharing of GSCM adoption and successful
experience. The dependence of smaller rms on the knowledge and resources of GSCM practices from their larger
chain partners shed lights on their varying levels of adopting GSCM.
This brief overview shows that organizational size may play a role in organizational and environmental relation-
ships, but not all aspects of environmental management practices are dependent on the size of the organization.
We shall tease out some of the GSCM practice adoptions, at least in China, which show differences based on

Copyright 2008 John Wiley & Sons, Ltd and ERP Environment Corp. Soc. Responsib. Environ. Mgmt. 15, 322337 (2008)
DOI: 10.1002/csr
326 Qinghua Zhu et al.

organizational size and their level of adoption of these practices. This investigation extends the body of literature
on the perspective of whether the organizational size characteristic plays a signicant role in the adoption of GSCM
practices, especially in an emerging economic environment. Implications for practice and theory will be discussed
after the results are presented.
Overall, we posit the following proposition.
Small, medium and large organizations have differing levels of adoption on the ve categories of GSCM practices.

Methodology

Sample
The data for this study are from survey questionnaires administered to managers from Chinese manufacturing
organizations. These organizations are sources of signicant resource and environmental burden within China,
especially since China has become a world factory (Zheng and Wang, 2006). Second, export and sales to foreign
customers are two major drivers for Chinese enterprises to improve their environmental performance (Christ-
mann and Taylor, 2001). Thus, based on these observations, we chose respondents mainly from three types of
organization throughout China, namely, traditional heavy polluters such as petroleum reneries, chemicals,
paper and pulp, textile and metallurgical industry, organizations exporting products or becoming suppliers of
foreign organizations, foreign direct investment (FDI) organizations and joint ventures. The questionnaire was
initially developed in English and then was translated into Chinese by a research team member who is a native
Chinese speaker. Twenty-two items in part one (GSCM practices, please see Table 1 below for detailed items) were
developed on the basis of industrial expert opinions and our review of the literature (e.g. Zsidisin and Hendrick,
1998; Walton et al., 1998; Sarkis, 1999; Carter et al., 2000). The target respondents were requested to answer the
questions using a ve-point Likert scale (1 = not considering it, 2 = planning to consider it, 3 = considering it
currently, 4 = initiate implementation, 5 = implementing successfully).
Due to potential problems for pure mail surveys (Larson, 2005), the data collection was administered through
three inter-related steps. Initially, a pilot test was conducted during two workshops for managers on environmen-
tal management in the Tianjin Economic and Technological Area (TEDA) and Dalian Economic and Technologi-
cal Development Zone (DETDZ), the largest and the second largest industrial zone in China according to GDP.
A total of 28 valid organizational responses were collected in the pilot test. Second, we used convenience sampling
of respondents through workshops in the School of Management at Dalian University of Technology1 and collected
158 valid organizational responses using the questionnaire. During the convenience sampling survey, managers
were requested to respond the survey questionnaire. To reduce the potential threats of respondent bias associated
with convenience sampling, we also conducted a random sample survey through regular postal mail followed by
telephone calls within the Dalian metropolitan area in the nal stage of our survey data acquisition process. The
randomly targeted organizations were identied from the list of Dalian Manufacturers using the selection criteria
based on the three types of organization outlined in the last paragraph. Out of a total of 1000 survey questionnaires
mailed, a total of 128 valid organizational responses from manufacturing enterprises were received (a 12.8%
response rate).
When we administered our survey questionnaire, especially to our convenience samples in workshops, our
respondents chose not to provide such information as rm size and industrial sectors because they felt uncomfort-
able in disclosing the demographic characteristics of their organizations, which they considered sensitive. Of the
314 survey responses (28 from the pilot, 158 from convenience sampling and 128 from random surveys), 209 of
them (12 from the pilot, 107 from convenience sampling and 90 from random surveys) reported their rm size.
For these 209 responding manufacturers, we completed a Chi-square test to compare organizational characteristics

1
The National Center for Industrial Science and Technology in the School of Management at the Dalian University of Technology was estab-
lished in 1980. The center is the rst joint training project between the Chinese and American governments. It is one of nine training bases for
industrial sectors in China designated by the State Economic and Trade Commission since 2001. In recent years, the center provided training
for managers targeted by our study. Since managers involving in training programs are representatives from all regions within China, we can
argue that their responses can generally represent the broader Chinese situation.

Copyright 2008 John Wiley & Sons, Ltd and ERP Environment Corp. Soc. Responsib. Environ. Mgmt. 15, 322337 (2008)
DOI: 10.1002/csr
Organizational Size and Green Supply Chain Management Practices in China 327

of the two groups of respondent manufacturers, i.e. the convenience samples including respondents from workshops
and the mail survey samples. The test results indicate that no difference, at a 5% level of statistical signicance,
exists between the two groups on ownership and rm size.
Further, we divided the 128 mail survey responses into two groups representing the theoretical respondents
and non-respondents, respectively.2 We evaluated non-response bias using t-test to determine whether there were
signicant statistical differences in the mean values of the ve categories (factors) of GSCM practices (see the next
section for calculation of the mean values) between the two groups. The results showed no statistical differences
between the groups at p > 0.05 signicance level for any of the factors, suggesting that non-response bias should
not be a problem in this study (Armstrong and Overton, 1977).

Data Analysis
To evaluate the reliability and unidimensionality of the factors, we performed a reliability test and itemtotal cor-
relation analyses. The measure in the reliability test is Cronbachs alpha, which ranges from 0 to 1.0, with values
larger than 0.60 indicating acceptability (Nunnally and Bernstein, 1994). Itemtotal correlation refers to a cor-
relation of an item or indicator with the composite score of all the items forming the same set. Items from a given
scale exhibiting itemtotal correlations less than 0.50 are considered part of the domain of a single construct. As
shown in our test results, the alpha values are 0.94, 0.87, 0.88, 0.83 and 0.87, while the itemtotal correlations
are 0.670.88, 0.680.74, 0.620.80, 0.650.74 and 0.730.76 for IEM, GP, CC, IR and ECO, respectively. The
high values of Cronbachs alpha (>0.60) and of the itemtotal correlation coefcients (>0.50) of the ve factors
suggest that all of the ve factors t the data reasonably well.
The key premises of the testable proposition in this study rely on the validity of the measurement properties of
the constructs on adopting GSCM practices. The results in Table 1 show that a ve-factor measurement model ts
the data acceptably. The chi-square goodness-of-t statistic is statistically signicant, indicating that the model is
different from the data. However, because large samples are likely to lead the chi-square statistic to reject valid
models (Bagozzi and Yi, 1988), we relied more heavily on other statistics of t: the comparative t index (CFI),
goodness-of-t index (GFI), normed t index (NFI), TuckerLewis index (TLI) and root mean square residual
(RMR). These statistics suggested that the data t the measurement model reasonably well (2 = 680.19; df = 199;
CFI = 0.90; GFI = 0.82; NFI = 0.87; TLI = 0.89; RMR = 0.076).
We now proceed to interpret the self-reported values of the ve factors of GSCM practices by the respondent
organizations. The mean value of all items measuring a particular factor (e.g. IEM) was initially used as the value
of that factor. The value (level) of GSCM practices implemented was derived by an average of the ve underlying
GSCM factors. The descriptive statistics and comparisons of adopting GSCM in Chinese organizations are sum-
marized in Table 2.
Table 2 shows that most GSCM practices are primarily at the planning or early consideration stages, with a
mean value between 2.60 and 3.81 (3 = considering it currently). Overall, IEM, ECO and IR attained higher levels
of implementation, with mean values of 3.57, 3.52 and 3.39 respectively, while external relationships have only
been considered rather than implemented, with mean values of 2.97 and 2.92 for GP and CC, respectively. Possible
survey bias in the responses may exist, since respondents may tend to overstate their actual GSCM practice situ-
ation. It seems that industrial relationships (external relationship management) are less emphasized by rms
contemplating the implemention of GSCM practices in China.
Analysis of variance (ANOVA) and t-tests were used to examine the variations in GSCM practices, and each of
the ve categories, for different sized organizations. The post hoc tests using the Bonferroni procedure for all of
the ANOVA results were similar. We categorized the sample organizations into three groups in terms of their
employee establishment, i.e. small those with employees less than 300, medium those with employees between
300 and 2000 and large those with employees more than 2000, according to the organizational criteria put
forward by the State Economic and Trade Commission in China (SETC, 2003).

2
The rst group included 82 completed responses that were returned within two weeks after the mailing. The second group included 46
completed responses that required follow-up telephone calls and returned after the cut-off for the rst mailing.

Copyright 2008 John Wiley & Sons, Ltd and ERP Environment Corp. Soc. Responsib. Environ. Mgmt. 15, 322337 (2008)
DOI: 10.1002/csr
328 Qinghua Zhu et al.

Results

Internal Environmental Management

As shown in Table 2, IEM practices have been initiated or at early consideration stages in all three groups of the
sample organizations. IEM has the highest mean value of 3.57 among all the GSCM practices. Commitment to
environmental management by senior managers receives the highest attention for implementation, with the
highest mean value of 3.81.
Results from further analysis show that large-sized organizations have higher levels of IEM practices for both
composite IEM factor and individual items, but statistically signicant differences do not exist at the construct
level, i.e. the IEM factor (see Table 2). The ANOVA results show that the two internal environmental practices,
i.e. ISO14001 certication and establishment of environmental management systems, have signicant
implementation differences among large-sized, medium-sized and small-sized organizations. Further t-tests
demonstrate that large-sized organizations initiate the implementation of environmental management systems at
a higher level than both medium-sized and small-sized organizations. In terms of ISO14001 certication, large-
sized organizations have signicantly higher levels of implementation than small-sized organizations, but not
medium-sized organizations. Thus, the proposition only receives partial support when the environmental system
implementation items are specically examined within the broader IEM category.
Table 2 shows that small-sized organizations have the lowest mean values for the IEM factor and its underlying
items. Obviously, small-sized organizations in China only consider or plan to consider establishing environmental
management systems, with a mean value of 3.10, let alone ISO 14001 certication, with the lowest mean value of
2.68 on IEM (which exemplies the provincialism of small-sized organizations and lower urgency for them to
meet international standards). Generally, larger organizations tend to have more resources and higher levels of
awareness for the establishment of environmental management systems. Moreover, large-sized organizations,
according to institutional theory and legitimacy concerns, may have increased visibility and face more pressure
from both governments and customers to attain ISO14001 certication. Such institutional pressures have yet to
be ltered down to smaller organizations through their logistics channels.

Green Purchasing
Our results show that the implementation of GP practice is still lagging and few Chinese organizations have
integrated environmental concerns into their supplier partnership and cooperation programs. These results are
evident in Table 2, with most items of GP attaining mean values around or even less than 3.00. As an example of
this lag, many organizations from developed countries evaluate not only their direct suppliers but their second-tier
suppliers (suppliers suppliers) as well. In their study on supplier evaluation, Walton et al. (1998) put forward the
ten top environmental supplier evaluation criteria. Among these, the evaluation of environmental friendly practices
for second-tier suppliers was identied by them as the second most important criterion. However, our survey
results indicate that second-tier suppliers environmental practice is in an early consideration stage by many
Chinese organizations, with a relatively low mean value of 2.60.
Further examination of the ANOVA and t-test results in Table 2 show that the sample organizations have similar
levels of GP implementation regardless of their rm size. Therefore, the proposition is not supported if we consider
only the composite GP factor. Furthermore, when we examine the individual GP items using ANOVA, we nd
that four of the ve practices in GP are not signicantly different in the sample among different sized organiza-
tions. However, the t-test results show that larger organizations implement two GP practices at higher levels. These
two GP practices are concerned with providing design specications to suppliers that include environmental
requirements for purchase items, and cooperation with suppliers for environmental objectives. These ndings are
consistent with those of Hall (2000), that large organizations drive the environmental activities through their
supply chains. For this practice, we argue that the proposition is weakly supported.

Copyright 2008 John Wiley & Sons, Ltd and ERP Environment Corp. Soc. Responsib. Environ. Mgmt. 15, 322337 (2008)
DOI: 10.1002/csr
 Items All responses Size 300 300 < Size 2000 Size > 2000 Comparison among three groups
(n = 209) (n = 44) (n = 105) (n = 60)

Mean S.D. Mean S.D. Mean S.D. Mean S.D. 1&2 1&3 2&3 F

Internal environmental 3.57 0.980 3.34 1.018 3.56 0.965 3.77 1.050 1.119 1.894+ 1.275 2.002
management
Commitment of 3.81 1.128 3.81 1.292 3.83 1.069 3.92 1.087 0.092 0.445 0.495 0.146
environmental
management from senior
managers
Support for environmental 3.60 1.037 3.50 1.132 3.64 1.066 3.68 1.041 0.697 0.817 0.232 0.364
management from mid-
level managers
Cross-functional cooperation 3.63 1.058 3.54 1.142 3.67 0.987 3.76 1.135 0.684 0.977 0.566 0.548
for environmental

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improvements
Total quality environmental 3.65 1.130 3.55 1.083 3.56 1.173 3.90 1.227 0.023 1.416 1.752+ 1.772
management
Environmental compliance 3.77 1.065 3.63 1.090 3.80 1.115 4.02 1.058 0.792 1.757+ 1.236 1.568
and auditing programs
ISO 14001 certication 3.23 1.340 2.68 1.415 3.18 1.384 3.40 1.450 1.906 2.385* 0.917 3.012*
Environmental management 3.37 1.219 3.10 1.165 3.34 1.272 3.74 1.292 1.014 2.482* 1.912* 3.337*
systems exist
Green purchasing 2.97 1.048 2.72 1.107 2.92 1.079 3.01 1.035 0.974 1.310 0.498 0.862
Providing design specication 3.28 1.270 2.93 1.332 3.39 1.308 3.43 1.201 1.910 1.972* 0.205 2.303+
to suppliers that include
environmental
requirements for
purchased item
Organizational Size and Green Supply Chain Management Practices in China

Cooperation with suppliers 3.06 1.289 2.50 1.348 3.15 1.317 3.25 1.226 2.660 2.923** 0.518 4.780**
for environmental
objectives
Environmental audit for 2.74 1.314 2.34 1.237 2.74 1.353 2.56 1.317 1.627+ 0.834 0.822 1.376
suppliers internal
management
Suppliers ISO14001 3.15 1.309 3.08 1.289 2.99 1.389 3.09 1.380 0.334 0.041 0.421 0.112
certication
Second-tier supplier 2.60 1.300 2.29 1.365 2.68 1.321 2.64 1.347 1.576 1.250 0.208 1.290
environmentally friendly
practice evaluation

DOI: 10.1002/csr
Corp. Soc. Responsib. Environ. Mgmt. 15, 322337 (2008)
329
 330
Items All responses Size 300 300 < Size 2000 Size > 2000 Comparison among three groups
(n = 209) (n = 44) (n = 105) (n = 60)

Mean S.D. Mean S.D. Mean S.D. Mean S.D. 1&2 1&3 2&3 F

Customer cooperation 2.92 1.015 2.37 1.018 2.93 0.965 2.90 1.050 2.690** 2.406* 0.050 3.612*
Cooperation with customer 2.69 1.266 2.29 1.270 2.75 1.254 2.66 1.334 1.986* 1.385 0.447 1.923
for eco-design
Cooperation with customers 3.04 1.226 2.36 1.423 3.09 1.236 3.25 1.139 3.004** 3.446*** 0.845 6.632**
for cleaner production
Cooperation with customers 2.94 1.243 2.45 1.260 2.97 1.233 2.80 1.297 2.236* 1.320 0.837 2.440+
for green packaging
Cooperation with customers 3.15 1.221 2.67 1.262 3.19 1.200 3.20 1.186 2.326* 2.183* 0.088 3.155*
for using less energy
during product
transportation

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Investment recovery 3.39 1.033 2.72 1.185 3.51 0.972 3.67 0.906 3.975*** 4.421*** 1.011 11.377***
Investment recovery (sale) of 3.43 1.274 2.72 1.503 3.47 1.256 3.83 1.045 3.009** 4.291*** 1.833+ 9.274***
excess inventories/
materials
Sale of scrap and used 3.48 1.171 3.05 1.413 3.64 1.092 3.64 1.071 2.739** 2.393* 0.016 4.429*
materials
Sale of excess capital 3.34 1.155 2.63 1.356 3.50 1.110 3.55 1.012 3.922*** 3.857*** 0.320 9.827***
equipment
Eco-design 3.52 1.020 3.24 1.093 3.63 0.991 3.60 1.010 2.011* 1.657+ 0.179 2.151
Design of products for 3.67 1.110 3.45 1.201 3.75 1.041 3.86 1.137 1.442 1.725+ 0.678 1.697
reduced consumption of
materials/energy
Design of products for reuse, 3.35 1.180 2.95 1.184 3.46 1.235 3.41 1.243 2.195* 1.832+ 0.209 2.506+
recycle, recovery of
materials, component
parts
Design of products to avoid 3.57 1.164 3.31 1.436 3.67 1.110 3.56 1.103 1.613+ 0.979 0.630 1.369
or reduce use of harmful
products and/or their
manufacturing process

Table 2. Descriptive statistics and comparison of GSCM practices in Chinese organizations of different sizes
1 = not considering it, 2 = planning to consider it, 3 = considering it currently, 4 = initiating implementation, 5 = implementing successfully.
1 represents size 300; 2 represents 300 < size 2000; 3 represents size > 200; i&j means Group i compared with Group j in t-tests.
+
p < 0.10; *p < 0.05; **p < 0.01; ***p < 0.001.

DOI: 10.1002/csr
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Qinghua Zhu et al.
Organizational Size and Green Supply Chain Management Practices in China 331

Customer Cooperation with Environmental Concerns

Similar to GP, Table 2 also shows that CC is only at a consideration stage rather than a more advanced
implementation stage, with a mean value of 2.92 for the composite CC factor. Table 2 shows that two of the four
mean values are less than 3.00, while the other two have slightly higher values, 3.04 for customer cooperation for
cleaner production and 3.15 for cooperation with customers for using less energy during product transportation.
The study organizations pay slightly more attention to cleaner production and use less energy during product
transportation to their customers when compared with their other green marketing practices. However, more
foreign organizations have established real or anticipated requirements for their Chinese suppliers. For example,
Bristol-Myers Squibb, IBM and Xerox have encouraged their Chinese suppliers to develop environmental manage-
ment systems consistent with ISO 14001, while Ford, GM and Toyota have required their Chinese suppliers to
obtain the ISO 14001 certication (GEMI, 2001).
As is apparent from the results of ANOVA in Table 2, we nd that CC is different for the three groups of dif-
ferent-sized organizations at the aggregate factor level. In addition, there are differences in most CC items with
an exception for one item, cooperation with customers for eco-design. Thus, the proposition is generally supported.
The results of ANOVA show that the three groups have the largest differences in the cooperation with customers
for cleaner production item. The t-test results show that both large-sized and medium-sized organizations have a
signicantly higher mean value than small-sized organizations on this item, a possible resultant effect from Chinese
government policies. For instance, both central and local governments have established a series of policies and
measures to motivate Chinese organizations to integrate cleaner production principles and tools into their envi-
ronmental practices, and also have organized various activities, including training and auditing programs, and
providing a series of preferable policies in order to accelerate the implementation of clean production (Zhao, 2003).
Another CC item in which we found signicant difference for organizational size variation is cooperation with
customers for using less energy during product transportation; larger organizations tend to have a higher level
of adoption in this practice. A possible reason for this situation is that larger organizations are in a better bargain-
ing position to require their customers to save transportation energy, with economic and environmental benets
accruing.

Investment Recovery
Research on IR such as reverse logistics has been completed for organizations in developed countries (Richey
et al., 2004; Zsidisin and Hendrick, 1998). IR has received much less attention in China than in developed coun-
tries such as the US and Germany. Our survey results show a mean value of 3.39 for IR. Explanations for this
result may be Chinese waste management policies and lack of recycling systems (Zhu and Zhao, 2003).
The results of ANOVA and t-tests in Table 2 show that larger organizations are more likely to be starting imple-
mentation than smaller companies. Both large- and medium-sized organizations have higher implementation
levels than small-sized organizations on all IR practices. As such, we receive strong support for the proposition
on this practice. Moreover, all the mean values in both large- and medium-sized organizations are over 3.00, which
indicates that organizations with over 300 employees have at least considered IR and some of them have initiated
relevant practices. As for the item on IR (sale) of excess inventories/materials, the mean value for large-sized
organizations is highest. The mean values for the three items on IR in small-sized organizations are 2.72, 3.05
and 2.63, all near or below the 3.00 benchmark. Small organizations in China seem to be less concerned with the
importance or necessity of IR. This result may be due to smaller amounts of assets or materials that are not eco-
nomically recoverable in smaller organizations. Smaller amounts of materials may not provide economies of scale
to protably recover these materials. Yet, with the increase of resource prices and solid waste disposal costs,
Chinese organizations will likely continue to pay additional attention to reducing waste through environmental
measures such as IR.

Eco-Design
Results in Table 2 show that ECO has received more attention than GP and CC, especially for design of products
for reduced consumption of materials and/or energy. All the practices within ECO are being considered or

Copyright 2008 John Wiley & Sons, Ltd and ERP Environment Corp. Soc. Responsib. Environ. Mgmt. 15, 322337 (2008)
DOI: 10.1002/csr
332 Qinghua Zhu et al.

initiated, which is evident in the mean value, which scores between 3.00 and 4.00. With increasing scarcity
of resources in China, materials and energy tend to be more expensive. As a result, products consuming less
materials and/or energy tend to be more protable.
The results of ANOVA in Table 2 show that only one item within ECO, i.e. design of products for reuse, recycle,
recovery of materials and component parts, has a slight difference among the three organizational groupings.
However, further t-tests show that small-sized organizations lag behind both large- and medium-sized organizations
on ECO practices. With closer examination of each ECO practice, t-tests show that large- and medium-sized
organizations consider or initiate eco-design for reuse, recycle and recovery of materials or component parts more
than that of small organizations. Large-sized organizations have initiated programs to design products for reduced
consumption of materials/energy through eco-design, with a mean value of 3.86, which is signicantly but higher
than small-sized organizations, with a mean value of 3.45. Overall, it is no surprise that small organizations are
lagging behind larger organizations in ECO, since smaller organizations typically have fewer resources and exper-
tise and lower awareness.
Results in Table 2 also suggest that most organizations have considered design of products to avoid or reduce
use of harmful products and/or their manufacturing process, with a mean value of 3.31, 3.67 and 3.56 respectively.
The greater involvement of larger organizations in eco-design provides ample opportunities to develop relation-
ships based on this activity. Having capabilities of this practice may result in a better chance to win business in
China.

Implications

Even though we have identied some implications in the presentation of results in the previous sections, we further
build on additional implications from both managerial and theoretical perspectives. We rst acknowledge that rm
size affects the adoption of several GSCM practices by Chinese manufacturers. Larger rms have more resources
than smaller rms and have more exibility to devote resources to strategic supply chain activities such as GSCM,
while smaller rms may not share the same level of exibility (Boyer et al., 1996). From our study results, small
organizations were shown to have lower levels of GSCM adoption when compared with larger ones. One possible
reason for this scenario can be such issues as lack of resources/power and/or lack of external pressures on smaller
organizations that may exist for larger organizations. Larger rms are more likely to formalize goals, measures
and organizational procedures, enabling them to attain a higher level of adopting GSCM (Chen and Hambrick,
1995).
Small-sized organizations pay less attention to environmental management systems when compared to both
medium- and large-sized organizations. Reasons may include the lack of resources and/or industrial and consumer
marketing pressures. In China, some local governments in industrial zones provide subsidies and training to aid
small organizations in establishing environmental management systems, especially for ISO 14001 certication
(Zhu and Zhao, 2003). Small organizations can pursue this help from governmental agencies to establish their
environmental management systems. Another possible approach to increase the adoption of environmental man-
agement systems by Chinese manufacturers is to jointly establish environmental management systems among
several small organizations. Foreign organizations, through their industrial marketing channels, especially for
those investing in or planning to invest in China, can help or even force small Chinese organizations to attain
ISO14001 certication.
Firm size affects several external GSCM practices, which greatly inuence logistics channel operations, includ-
ing both GP and CC practices. Small-sized organizations lag behind large-sized organizations on cooperation with
suppliers for environmental objectives. This nding is consistent with previous ndings that rm size affects the
levels of behavior-based management practices such as GSCM, which would require signicant human and nan-
cial resources for such activities as developing and certifying suppliers (Zsidisin and Ellram, 2003). Smaller orga-
nizations typically lack the resources and bargaining power that would affect their supplier practices. Small-sized
organizations pay less attention to two CC practices, that is, cooperation with customers for cleaner production
and for using less energy during product transportation. This phenomenon may result from less pressure for
environmental awareness. However, after Chinas entry into the WTO, many Chinese organizations face pressures

Copyright 2008 John Wiley & Sons, Ltd and ERP Environment Corp. Soc. Responsib. Environ. Mgmt. 15, 322337 (2008)
DOI: 10.1002/csr
Organizational Size and Green Supply Chain Management Practices in China 333

to compete with their foreign counterparts even if they do not export products. Since larger organizations have
higher levels of GSCM adoption, policies that facilitate the diffusion of these innovations to smaller organizations
should be encouraged, either through private partnerships, supply chains, professional organizations or govern-
mental policies.
Our results indicate that all IR practices have received less attention among small-sized organizations compared
with both large-sized and medium-sized organizations. A plausible reason is that fewer economic benets may be
accrued by smaller organizations if they adopt IR practices, as they have smaller amounts of wastes such as scrap
and used materials in their operations. However, with increasing disposal fees for waste, IR will become protable
even for small-sized organizations due to potentials for cost savings. This issue has become more evident recently
due to decreasing resources and increasing environmental pressures and the fact that China has established stricter
laws and regulations related to IR. Increasingly, the adoption of IR practices by Chinese manufacturers will be
driven by coercive pressures rather than economic-driven motivation. It is desirable for small-sized organizations
in China to proactively initiate IR practice instead of reacting to potential regulatory pressures for which they are
poorly prepared.
Compared with large- and medium-sized organizations, small-sized organizations have signicantly fewer
concerns for designing products for reuse, recycling and recovery of materials and component parts. With further
globalization, international laws in other regions may cause eco-design to become a necessary practice for
organizations exporting products in China. For example, the European Community Directive on Waste Electrical
and Electronic Equipment (WEEE) has been implemented (with actions required by organizations starting in June
2006), and Chinese manufacturers are forbidden to use six harmful substances in their products and required to
take back used products or pay extra money when they export electrical and electronic equipment to Europe. As a
result, all Chinese electrical/electronic organizations including many small-sized organizations have been prompted
to design products for reuse, recycle and recovery as well as to refrain from (through substitution designs) using
the six substances.
In China, there are many existing avenues where smaller organizations may take advantage of their resources
for better environmental practices. For example, the China International Cooperation Association of Small and
Medium Enterprises was established in March 1990, and many local associations have also been established to
help smaller organizations gain expertise and knowledge that may not exist in their organizations. The main
mission of this association is to help small- and medium-sized organizations to promote technology progress and
improve international competitiveness. Both central and local Chinese governments have established policies to
help these associations with their missions (CICASME, 2004). Knowledge diffusion of environmental practices
in business logistics should be strongly encouraged through these types of quasi-governmental and/or professional
agency, or industrial marketing relationships between smaller and larger organizations (Lai et al., 2005).
For smaller Chinese organizations to better market themselves to potential business partners, more policies
should be designed and implemented by government and professional groups to encourage small organizations
to improve their environmental performance. For example, cleaner production was encouraged in China through
enforcement for those Chinese manufacturers that can not meet standards (SEPA, 2004); such programs can
extend beyond internal cleaner production policies to supply chain and early prevention policies in areas such as
GP and ECO.
Generally, external supply chain and business logistics relationships, such as that with GP and CC, seem to
have attracted the least attention by Chinese manufacturers, especially from smaller organizations. With the devel-
opment of globalization and core competencies, the competition among organizations has shifted to competition
among supply chains. Thus, inter-organizational supply chain management has become an important business
logistics innovation, especially for multinational enterprises (Lai, 2004). Increasingly, multinational enterprises
have established global networks of suppliers (Dunning, 1993). Domestically, in China, the Chinese government,
a large consumer of many items produced in China, can seek to implement preferred GP agreements. This
mechanism, through the governments own supply chain, can further encourage the adoption of GSCM practices
by organizations of all sizes.
There are numerous implications for domestic Chinese manufacturers based on the results of our study, but
organizations seeking to operate businesses (either as suppliers, actual manufacturers, or customers) in China
should be aware of these evolving environmental strategies and requirements. Internally, managers will become

Copyright 2008 John Wiley & Sons, Ltd and ERP Environment Corp. Soc. Responsib. Environ. Mgmt. 15, 322337 (2008)
DOI: 10.1002/csr
334 Qinghua Zhu et al.

aware of these increasing environmental pressures, further requiring organizations in these logistics supply chains
to meet requirements.
Furthermore, our results for Chinese manufacturers have implications for emerging economies elsewhere. For
example, these other economies will be heavily dependent on logistics and supply chains that are substantially
located in developed nations, who will have stricter environmental regulations or policies. In addition, emerging
economies will have pressures to focus on economic development, sometimes at the expense of environmental
protection. However, economic progress in these countries can coexist with environmental practices, as they appear
to in China. Other emerging countries may also feel these similar pressures for environmental protection, which
will warrant an investigation too.

Conclusions

This paper has investigated the adoption of GSCM practices by manufacturing organizations within China with a
provision of various implications for these organizations. This investigation compared the level of GSCM adoption
for manufacturers of different organizational sizes. Both the support and lack of support (mixed results) for orga-
nizational size as a discriminating factor for environmental innovation is one reason why we wished to further
investigate this characteristics role. We nd in our study that these variations may depend on what GSCM factors
are to be evaluated. In other words, we found some results where organizational size differentiation in GSCM
practice adoption level exists, and some where no difference exists.
Overall, we identied that medium-sized and large-sized organizations are further along than small-sized orga-
nizations in implementing these environmental practices in most areas, with one exception, supplier ISO14001
certication. In most cases, medium-sized organizations implemented GSCM practices at the same rate as larger
organizations, with three exceptions, total quality environmental management systems exist and investment recov-
ery of excess inventories/materials. This result may be due to the fact that 24 medium-sized respondents account
for most (63.2%) of our 38 respondent foreign direct investment organizations/joint ventures.
Under competitive, regulatory and community pressures, it has become increasingly important for organizations
to balance economic and environmental performance (Carter and Carter, 1998; Shultz and Holbrook, 1999).
GSCM practices, especially IEM, have become important for organizations to achieve prot and market share
objectives by lowering their environmental impacts and raising efciency (Sarkis, 1995, 2001). Compared with
developed countries such as the US, Europe, Canada and Japan, China may have weaker corporate culture,
resource, knowledge and performance on environmental management (World Bank, 1997; Zhang et al., 1999).
However, Christmann and Taylor (2001) argued that increasing globalization has made different cultures more
similar. This result has also been made more evident by recent research in this area (Branzei and Vertinsky, 2003).
Currently, Chinese manufacturers have strong drivers and pressures to implement environmental management,
and the relationships and investigation of these pressures will help to further put the adoption of these practices
at a higher level.
With the environmental requirements from international trade, especially after Chinas entry into the WTO, as
well as the relatively scarcity of resources, the Chinese government has established many laws and regulations for
environmental management that should be of concern to manufacturers. Adoption of these many practices is
greater in larger organizations; one of the more effective impetuses to motivate small organizations to implement
GSCM practices may be environmental pressure from large downstream or upstream organizations (Carter and
Carter, 1998). This nding may represent a trickle-down approach for maintaining environmental soundness
throughout materials and product lifecycles. Thus, it would probably take joint efforts and regulatory policy to help
small manufacturers improve their adoption of environmental practices. The relationships between these types of
pressures and adoption of GSCM practices require further investigation.
Proactive GSCM practices are an important avenue to promote environmental practices in all organizations,
especially in small organizations. However, GSCM is still a relatively novel concept in China, as it is in many parts
of the world. Some forward thinking large Chinese organizations have recognized its importance and tried to put
it into practice, but even most of these larger organizations lack experience as well as necessary tools and manage-
ment skills to garner the full benet of these practices.

Copyright 2008 John Wiley & Sons, Ltd and ERP Environment Corp. Soc. Responsib. Environ. Mgmt. 15, 322337 (2008)
DOI: 10.1002/csr
Organizational Size and Green Supply Chain Management Practices in China 335

The results show that GP has gained little attention by Chinese manufacturers and is at a similar implementa-
tion level among small-, medium- and large-sized manufacturers. As we noted in our background discussion, if a
practice is lagging for manufacturers of all sizes, the role of professional industry organizations or governmental
regulators may need to take the lead to diffuse the practice. In this case for GP, the Chinese government can
further promote GP practice by either establishing and enacting stricter regulations, or implementing such prac-
tice themselves as a demonstration of its effectiveness. An example of stricter regulations that have implications
for GP is when the Chinese government enacted the Regulation on Pollution Control for Electronic and Informa-
tion Products, which requires all manufacturers to label hazardous substances used in their products. In this case,
Chinese manufacturers in this industry have to check their suppliers and purposely choose suppliers that do not
use hazardous wastes. In addition, this law specically requires that eco-design principles be used to mitigate the
environmental burden of this equipment.
For other GSCM practices, larger manufacturers are adopting practices at a greater scale than smaller manu-
facturers. In this situation, with unequal implementation and a higher level of implementation by larger organiza-
tions, the larger organizations may serve as an effective diffusion mechanism. That is, larger manufacturers can
be viewed as a diffusion mechanism through their supply chains and collaborative efforts for their partner rms
to adopt these practices. In addition, governmental policy should encourage this collaboration and diffusion
through supportive promotion programs.
Other developing countries, especially those in Asia, can learn from the Chinese experience. Part of this experi-
ence may include other governments establishing regulations to stimulate larger manufacturers to implement
GSCM practices, while larger manufacturers can aid in greening their supply chains through their market and
channel power. Setting up such policy mechanisms in China has caused private organizations to further adopt
these environmentally conscious practices, and other developing countries may nd that these practices are appli-
cable and benecial to them.
We found that rm size has a statistically signicant relationship with the adoption of GSCM practices. However,
other size characteristic factors such as market capitalization, total sales, export sales volumes and percentage of
sales as exports need to be investigated. This initial investigation has provided numerous other opportunities for
future research in this area. For example, we have not studied how to promote GSCM practices, especially for
small organizations: what is successful and what is not. The signicance of the role of selling an organization as
a green organization to industrial partners needs further investigation, not only in China but also in other loca-
tions. In addition, the inuence of globalization and foreign direct investment, especially after Chinas entry into
the WTO, could be more carefully examined, as a potential pressure for further adoption, pointing to a longitudi-
nal study for environmental practices. A comparative analysis with other developing and industrializing nations
and their industries could prove benecial, since most studies at this time are for developed nations. In addition,
the issue of ownership (state owned, privately owned or foreign direct investment) may provide signicant expla-
nation for GSCM adoption and needs to be systematically investigated. Given that China is one of the emerging
manufacturing giants, further investigation in any of these and other directions is necessary to understand the
future environmental situation there and throughout the world.

Acknowledgements
This work is supported by the National Natural Science Foundation of China Project (70772085), the National Institute for
Environmental Studies of Japan, and a research grant by The Hong Kong Polytechnic University (A630).

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