Int. J.

Production Economics 164 (2015) 234–244

Contents lists available at ScienceDirect

Int. J. Production Economics

journal homepage: www.elsevier.com/locate/ijpe

Green supply chains: A perspective from an emerging economy

Jayanth Jayaram a,n, Balram Avittathur b
a
Moore School of Business, University of South Carolina, Columbia, SC 29208, USA
b
Indian Institute of Management Calcutta, D.H. Road, Joka P.O., Kolkata 700104, India

art ic l e i nf o a b s t r a c t

Article history: We use grounded theory arguments and field data to support a model that links environmental
Received 20 April 2014 government policies to customer actions and firm sustainability strategies. A firm's sustainability
Accepted 2 December 2014 strategy in turn influences the design and deployment of green supply chain management strategies.
Available online 6 December 2014
Specifically, green design, product recovery and reverse logistics were found to be key facets of green
Keywords: supply chain management strategies. Our focus on the emerging economy of India and the unique
Future green supply chains insights of this qualitative Delphi study that relies on grounded theory makes key contributions to
Supply chain key trends theory building and managerial practice in the area of sustainable supply chain management.
Environmental sustainability & 2014 Elsevier B.V. All rights reserved.
Sustainable supply chains
India

1. Introduction since expanded to address supply chain integration in the context of

Environmental sustainability has been receiving immense aca-
demic and industry attention in recent years. Increasing carbon
emissions and the associated global warming have been raising
numerous questions on the efforts required to make businesses
more sustainable environmentally. In a globalized world, where
manufacturing is increasingly getting concentrated, transportation
of products over long distances is a reality. Increasing consump-
tion, richer lifestyles and supply chain issues such as higher levels
of logistics and transportation coordination have led to higher
carbon emissions thereby raising important questions on environ-
mental sustainability. On a parallel basis, customers are becoming
more environmentally conscious and are making procurement
choices with an eye on environmentally friendliness of its ingre-
dients. Examples of this are environmental logistics (goods moving
shorter distances), use of environmentally friendly logistics modes
(like inland waterways) and environmentally friendly packaging
choices (Yang et al., 2013; Sheu et al., 2005).
The theme of supply chain integration in global supply chain
management has occupied significant attention among several
researchers (Danese et al., 2013; Jayaram and Tan, 2010; Narasimhan
and Jayaram, 1998). Indeed, there has been a recent meta-analysis that
summarized the effects of supply chain integration on firm perfor-
mance by empirically examining this relationship across a wide cross
section of studies (Leuschner et al., 2013). This body of literature while
significantly emanating out of works done in USA and Europe has
n
Corresponding author.
E-mail addresses: jayaram@moore.sc.edu (J. Jayaram),
balram@iimcal.ac.in (B. Avittathur).
emerging economies such as China, Hong Kong, India and other
similar evolving economy contexts like Turkey (Zhang and Huo, 2013;
Yu et al., 2013; Jayaram et al., 2011; Lam and Postle, 2006; Cetindamar
et al., 2005; Sahay et al., 2006; Sahay and Mohan, 2003). India in
particular has become a vital cog in the supply chain functioning of
many global firms. The context of India as a source of products and
services as well as knowledge capital makes it a pertinent choice to
study trends in supply chain practices there. Indeed, in the Indian
context, there have been empirical studies that have examined the
extent of use of supply chain management practices amongst Indian
companies which is in sharp contrast to what has been practiced
among companies in the developed world (Sahay and Mohan, 2003;
Sahay et al., 2006; Joshi et al., 2013). For example, greening initiatives
is especially important in India given the lower purchasing power of
consumers and shortages in electricity supplied from the grid
(Jayaram and Avittathur, 2012). These initiatives include eco design
of products to accommodate the lower purchasing power as well as
need for products to be high on energy conservation given the scarcity
of energy during certain parts of the year and in non-urban areas.
Therefore, the leap from supply chain management to green supply
chain management has been relatively rare in the Indian context,
although there has been an emerging interest in reporting case study
research studies (Kumar et al., 2012) and other large scale empirical
studies in the Indian context (Mitra and Datta, 2014; Mohanty and
Prakash, 2013; Kumar et al., 2013).
In contrast to many studies that have looked at trends in sus-
tainability in the developed countries (Carter et al., 2000; Carter
and Jennings, 2002) there have been recent attempts to examine
these trends in emerging economies like India (Gupta et al., 2013;
Jayaraman et al., 2012; Ishaswani and Datta, 2011; Ashraf et al.,
2009; Motwani et al., 1998), China and Taiwan (Ye et al., 2013; Zhu

http://dx.doi.org/10.1016/j.ijpe.2014.12.003
0925-5273/& 2014 Elsevier B.V. All rights reserved.
 J. Jayaram, B. Avittathur / Int. J. Production Economics 164 (2015) 234–244 235

et al., 2011, 2013; Cheng, 2011; Chiou et al., 2011; Christmann and
Taylor, 2001) and the Middle East (Abbasi and Nilsson, 2012; Brik
et al., 2013).
We contribute to this stream of literature with a focus on India by
reporting on expected changes in the design and deployment of
environmental supply chains in the future from the perspective of
senior supply chain management managers in India. We use survey
data and a grounded theory approach using the input from manu-
facturing executives who have a vast experience base in supply chain
management of Indian firms with a global footprint. These execu-
tives have worked or are currently working for firms in India that
have a global footprint. In many cases, these executives having
acquired practical and academic experiences that are advanced in
terms of supply chain training. Accordingly, the basis of this research
is well founded in terms of an enriched background of the respon-
dents in the general area of supply chain management and specifi-
cally, in the area of green supply chain management. We use the
survey findings to understand the expected changes to supply chains
from an emerging economy and from a global perspective.
2. Developing the green supply chain framework
Environmental issues have received fair attention in literature in
the last 40 years. However, relating them to consumer behavior
changes, firm level changes and supply level changes have evolved
only in the recent years. We survey literature regarding these
linkages under three sub-sections namely customer issues, sus-
tainability strategies and expected changes to green supply chains.
A summary of this literature is presented in Table 1. Table 1 has two
parts; the first part summarizes the different theories that have been
employed in the sustainability literature. As can be seen from this
table, a variety of perspectives can be used to promote common
themes in green SCM. Arguably this has resulted in a ‘scattered’
approach of understanding the different theoretical lens that can
shed light on our phenomenon of interest. Therefore, a consideration
of past theories coupled with the grounded theory approach appears
to be more pertinent in the emerging context of India.
One noticeable lacuna in the summary of the past studies is a
synthesis of studies using a grounded theory approach which is an
important but neglected theoretical lens, especially in the domain
of green supply chain management. The use of grounded theory to
complement existing theories has been common in operations and
supply chain management as well. For example, Binder and
Edwards (2010) used a grounded theory approach to study inter
firm governance mechanisms. Also, Narasimhan et al. (2010) used
this approach in the strategic outsourcing context and examined
the influence of integrative supply management practices.
Dowlatshahi (2005) used this approach in the context to remanu-
facturing in the reverse logistics context. Closer to the theme of
this paper, Koh et al. (2012) examined the multitier influence of
implementation of directives and standards such as WEEE and
ROHS on the supply chain. A similar approach was taken by
Teixeira et al. (2012) in the context of the Brazilian green supply
chains although the issue of interest was not on overall green
supply chain management but on environmental training pro-
grams in Brazil. Taken together, these studies form an essential
core that support our approach as well.

Table 1a
Relevant theories on sustainabilitya.

Name of theory Source Comments

Complexity theory (Crozier and Thoenig, 1976) Takes a macro-policy view.

Ecological modernization
theory
Information theory
Institutional theory
Resource based view
Resource dependence
theory
Social network theory
Stakeholder theory
Transaction cost economics (Williamson, 1981)
Grounded theory
(Janicke, 2008; Murphy and Gouldson,
2000)
(Simpson et al., 2007)
(DiMaggio and Powell, 1983)
(Barney, 1991)
(Pfeffer and Salancik, 1978)
(Jones et al., 1997; Wuyts et al., 2004)
(Freeman, 1984)
(Glasser and Strauss, 1967)
Promotes partnerships between public and private enterprise.
Uses a micro-data based approach
Takes into account drivers from institutions.
Brings into the scarcity of resources perspective.
Points out the dependence equation between supply chain partners.
Similar to the resource dependence view, uses sociological lens to probe GSCM.
Similar to the institutional theory view, this view points out the multifarious interests
surrounding green SCM.
Takes a micro-approach similar to information view but focuses on transaction as the unit of
analysis.
Points to a contextual view.

a
Adapted from Sarkis et al. (2011).

Table 1b
Main studies on green supply chains.

Themes Source Comments

Customer (Mobley et al., 1995; Essousi and Linton, 2010; Wang et al., 2013; Scarpa and Both industrial and consumer based customers influence sustainability.
related Willis, 2010; Herring, 2006; Young et al., 2010; Bai and Sarkis, 2010; Nishitani,
issues 2010)
Sustainability (Hart and Dowell, 2011; Lin, 2012; Lubin and Esty, 2010; Ameer and Othman, The varied nature of sustainability strategies at the centralized head
strategies 2012; Galbreth and Ghosh, 2012; Arnold and Hockerts, 2011; Curkovic and quarter level has important implications for the design of green supply
Sroufe, 2011) chains.
Product (Carter and Jennings, 2002; Chiou et al., 2011; Gavronski et al., 2011; Recovery of products and materials is an integral element and benefits
recovery Gunasekaran and Spalanzani, 2012; Zhu et al., 2013) associated with Green SCM.
Reverse (Thun and Müller, 2010; Chiou et al., 2011; Gavronski et al., 2011; Trends pertaining to forward flows in green SCM should be
supply Gunasekaran and Spalanzani, 2012; Zhu et al., 2013) concomitantly examined along with reverse flows from customer back to
chains the OEM manufacturer.
Green designs (Chiou et al., 2011; Gavronski et al., 2011; Gunasekaran and Spalanzani, 2012; An important facet of the influence of sustainability strategies is in the
Zhu et al., 2013) design of products and processes from an environmentally friendly point
of view.
236 J. Jayaram, B. Avittathur / Int. J. Production Economics 164 (2015) 234–244
The second part cites studies that have examined sustainability
issues in varied contexts using emerging economy contexts such as
Brazil, China, India and other countries. Again this pattern prompts
a closer look at the design of green SCM by taking into account, the
broader sustainability missions of the firm, customer input and
overall state of the economy. This is to say that the growth or lack
of growth in the economy can prompt differential strategies with
respect to sustainability and design of green SCM. In the ensuing
section, we tease out these perspectives in depth leading to the
support of our initial theoretical framework.
2.1. Institutional isomorphism theory precepts
Proponents of institutional isomorphism theory have argued that
firms adopt green supply chain management initiatives in reaction to
government regulations and pressures from customers (DiMaggio
and Powell, 1983; Deephouse, 1996; Dacin, 1997; Glover et al., 2014).
Specifically, these are grouped under what is termed as coercive
pressures. Although the other source of pressure, namely the
mimetic pressures is very much prevalent in the Indian context,
we do not directly capture the effects arising from mimetic pressures
in this study. Coercive pressure due to environmental regulations
imposed by the government and other regulatory bodies, on
organizations to adopt specific green practices have been reported
in the prior literature (Bansal and Roth, 2000; Hall, 2000). As supply
chains are embedded in the relationships and institutions that
comprise a national economy (Khanna et al., 2006), it may be argued
that the business environment in a country, say India is reflective of
the country's institutional environment (Scott, 2001). Such an
argument has recently been made in the context of supply chain
technology investments in India (see Saldanha et al., 2015).
2.2. Customer pressures
The examples of companies that have influenced customer
loyalty demonstrates the powerful role of customer's persuasive
pressures on buying choices. For example, BMW with its close to
100% recyclability of components that make up its car is able to
showcase the importance its places on sustainability. In response,
customers are willing to pay a premium to endorse such behavior.
A similar trend can be seen in the area of industrial purchasing as
well. Similarly, the category of customer consciousness includes
pressures or requirements imposed by purchasing firms or indi-
viduals specifying certain green requirements in products and
services (Blumberg, 1999; Christmann and Taylor, 2001). For
example, IKEA requires its suppliers to be environmentally
friendly by aligning their environmental strategies with IKEA's
(Elg and Hultman, 2011). One example of this is in packaging. Just
as IKEA practices green packaging, it expects its suppliers to do so
too. In another example, IKEA has an automated machine that will
accept CFL light bulbs from customers and provide them with a
coffee voucher in exchange. As the COO of sustainability of IKEA,
Howard (2011) quotes,
“IKEA aims at having all of its products to be recyclable or
renewable by 2015. In our transparent world, every product will
have a story. You've got to make sure it's a good one.”
Wal-Mart will only work with suppliers that meet their strict
environmental standards by using one of the most comprehensive
environmental scorecards and enforcing compliance. What is
remarkable about this scorecard is that it applies to a global supply
base (Dhiman, 2008; Rigby and Tager, 2008). Whether the supplier is
located in China or in Brazil, they are subject to the same standards.
Toyota requires its suppliers to supply parts in returnable totes
which are then reused as part of closed loop supply chain (Page,
2010). These examples point to the importance of sustainability that
companies emphasize while engaging with their suppliers.
On the academic front, several studies have examined the
influence of customer pressures on shaping and designing sustain-
ability strategies. Mobley et al. (1995) report that consumers are
influenced positively by recycled material in the products they
purchase. Essoussi and Linton (2010) study the consumer pre-
ference for purchasing products with recycled components.
Though products made of recycled components were perceived
to be of lesser value than products made of new components,
customers were willing to buy the former if the perceived
functional risk was low. In the context of China, Wang et al.
(2013) found that consumers did not prefer to purchase remanu-
factured products when they had a choice of buying a virgin new
product even if the price was higher for the new product. There is
sufficient literature regarding consumer behavior and renewable
energy consumption (Scarpa and Willis, 2010; Herring, 2006).
Herring (2006) argues that rather than focusing on improving the
efficiency of energy use, an effective CO2 policy should concentrate
on shifting to energy from renewable sources. However, the
literature is scant on the effect of high requirement of non-
renewable energy resources in the making of a product and for
its eventual consumption. Young et al. (2010) report that the
customer's motivation to pursue green criteria is influenced by
their knowledge about environmental issues. Bai and Sarkis (2010)
argue that conventional supplier selection research does not
emphasize environmental sustainability factors and highlight the
importance of evaluating supplier environmental performance
while selecting them. Nishitani (2010) report that increasing
customer pressures have increased the adoption of ISO 14000
standards by suppliers. To sum up, these studies highlight the
influence and role of customer pressure in designing sustainability
strategies in contexts other than in India.
2.3. Sustainability strategy
Hart and Dowell (2011) evaluate the application of Natural-
Resource-Based View (NRBV) of the firm as proposed by Hart
(1995) in the period between these publications and reports that
“most of the application of NRBV has been focused on pollution
prevention, with much less attention to empirical research on
product stewardship or sustainable development strategies”. Lin
(2012) identifies pollution prevention as one of the firm level
environmental strategies that range along a continuum of pro-
activeness. Lubin and Esty (2010) indicate that sustainability efforts
in firms are driven by innovations in energy efficiency, renewable
power, resource productivity, and pollution control. Ameer and
Othman (2012) compare the financial performance of companies
with superior sustainable practices against ones that do not engage
in such practices. Reducing total emissions generated and improving
performance on energy use were among the environmental factors
on which the firms were evaluated. Galbreth and Ghosh (2012)
model a duopoly competition where one firm's product is more
sustainable than the other's and report interesting results linking
firm's sustainability and sustainability awareness of its consumers.
Arnold and Hockerts (2011) study the corporate sustainability
innovation strategy at Royal Philips and report capturing of sustain-
ability related information, adoption of sustainability reports, stake-
holder integration in environmental themes, and ISO 14001
certification of all units as some of the important sustainability
oriented changes within the firm. Curkovic and Sroufe (2011) report
that adoption of ISO 14000 standards by firms enable them to build
competitive advantage across their supply chain. These studies
suggest the key influence of overall sustainability strategies from
the top management leadership.
 J. Jayaram, B. Avittathur / Int. J. Production Economics 164 (2015) 234–244
2.4. Green supply chain design
Green Supply Chain Management (GSCM) has been a topic of
strong research interest in recent years (Carter and Jennings, 2002;
Chiou et al., 2011, Gavronski et al., 2011; Gunasekaran and
Spalanzani, 2012; Zhu et al., 2013). Specifically, these studies have
reported the use of initiatives such as using environmentally
friendly materials, having environmental standards as a selection
criterion for suppliers, having environmental audits for suppliers,
recycling process waste back into the manufacturing process,
capturing environmental information such as process waste and
materials recycling, and improving on environmental metrics such
as tracking process waste and materials recycling.
The literature on GSCM points to GSCM initiatives falling under
three broad categories: product recovery, reverse supply chains
and collaborations, and green designs. The GSCM initiatives under
product recovery refer to supply chain initiatives that are under-
taken internally at either the manufacturer or its suppliers.
The GSCM initiatives under reverse supply chains and colla-
borations refer to supply chain initiatives that are undertaken
jointly with suppliers and customers. Based on an elaborate cross-
sectional survey with manufacturers in four Chinese industries,
Zhu et al. (2013) examined the influence of cooperation with
customers and suppliers on environmental objectives. Other
pertinent literature includes Gunasekaran and Spalanzani (2012)
and Thun and Müller (2010), and the initiatives reported include
remanufacturing, using returnable packing materials, recycling of
parts and packaging material, collaboration with supply chain
partners in recycling and remanufacturing, using third party
providers and reverse logistics. The GSCM initiatives under green
designs refer to supply chain initiatives that are undertaken in the
domain of design. Some of the pertinent literature includes Chiou
et al. (2011), Gunasekaran and Spalanzani (2012) and Zhu et al.
(2013), and the initiatives reported include design of performance
measures, products and processes for greater environmental
friendliness and impact.
Fig. 1 describes the organizing framework of this study that will
be validated based on insights from supply chain managers in the
field study. Specifically, findings from testing of this conceptual
framework will be used to refine the model into an Inductive
Research Framework. The inductive research framework will form
the basis for offering testable hypotheses for future research. This
approach was taken because the immediate application of refined
and well established constructs in the sustainability domain in the
context of Western countries is unlikely to be applicable in the
Indian context. It is expected that some modification and differ-
ential priorities is expected in the Indian scenario. Thus, a field
based approach that involved interview protocol questions that
were modified for the purpose of a large scale Delphi study
approach was taken. Normally, Delphi studies employ a panel of
experts (typically less than 10). In order to get a wider coverage
that represented a broad variety of contextual knowledge of
sustainability issues in India, we used a large scale Delphi study
approach.
2.5. The green supply chains: questionnaire and research
methodology
Based on the above literature we developed a survey question-
naire (provided in the Appendix A) that comprised of items on
Sustainability
Environmental Customer Green Supply
Strategy
Policy Issues Chain Design
Emphasis
Fig. 1. Conceptual grounded theory framework.
237
Table 2
Scale reliability of the measures.
Question and measures Number of items Cronbach alpha
for different
environmental
emphasis
Low High
Consumption related issues
1. Green procurement 2 0.819 0.623
2. Green consciousness 4 0.806 0.844
Company level responses
1. Sustainable firm 11 0.924 0.927
Expected changes to the supply chains
1. Product recovery 6 0.873 0.817
2. Reverse supply chains 5 0.817 0.826
3. Green designs 3 0.865 0.806
consumption related issues, company level responses to changes in
consumption patterns and expected changes to supply chains owing
to changes in consumption and company responses under different
environmental emphasis scenarios. The consumption related issues
comprised of two measures – green procurement (two items) and
green consciousness (four items). Company level responses were
treated as one measure comprising of 11 items. Expected changes to
supply chains comprised of three measures – product recovery (six
items) and reverse supply chains (five items) and green designs
(three items). All together the questionnaire had 31 items. Regarding
environmental emphasis, we created two scenarios, low- and high-
environmental emphasis scenarios. A “high” environment emphasis
refers to considerable and widespread action by governments (of
many countries) to limit emissions and waste through new policy
and tariff measures. It also refers to higher sensitivity of customers
towards purchasing more environment friendly products. A “low”
environment emphasis refers to insignificant and isolated action (by
a few countries only) to change policy and tariff measures regarding
limiting of emissions and waste.
Our sample of supply chain professionals was selected from
participants of an executive program from a premier business school
in India. These professionals had prior work experience as managers
in local and multi-national manufacturing firms in India. Only those
managers with at least five years of work experience in manufactur-
ing/operations/purchasing were selected to be included in our study.
Our final sample comprised of 65 managers who had worked in
industries such as automotive, capital goods, electronics, pharma-
ceuticals and steel. We instructed the participants to respond to
the 31 items based on their overall experience in supply chain
management in the Indian context rather than on the basis of their
experience in the firm they served. For each environmental empha-
sis scenario, we asked the participant to respond on a five-point
scale (1¼Strongly disagree, 2¼Disagree, 3¼Neutral, 4¼Agree, and
5¼Strongly agree) to the 31 items mentioned above. All the mea-
sures in the three categories turned out to be reliable scales in both
the environmental emphasis scenarios (Cronbach alpha greater than
0.8 except in one instance where it was 0.623, which is considered
acceptable).The scale reliability of all the measures are described
in Table 2.
3. Findings and analyses
3.1. Important items
We determined the sum of Agree and Strongly agree responses
as a percentage of total responses for the 31 items in both the
environmental emphasis scenarios. The items were ranked within
238 J. Jayaram, B. Avittathur / Int. J. Production Economics 164 (2015) 234–244

the respective category for each environmental emphasis scenario.
After ranking an item, we termed it as significant on the basis of
whether it was ranked in the top quartile of all the items in that
question for at least one of the environmental emphasis scenarios.
The top quartile included top item in consumption related issues,
top three items in company level responses and top three items in
expected changes to the supply chains in each environmental
emphasis scenario. Please refer to Appendix A for the details. The
issues that were significant could be classified into three cate-
gories: (i) issues that were statistically important only in low
environmental emphasis scenario, (ii) issues that were statistically
important only in high environmental emphasis scenario and
(iii) issues that were statistically important in both environmental
emphasis scenarios.
that India cannot afford to be very environmentally conscious at its
current stage of economic development.
Our findings on items significant only in the low environmental
emphasis scenario are described in Table 3 and are as follows. In
this scenario the consumers would be educating themselves about
environmental issues. This in turn would make firms focus on
reducing energy consumption and educating important employees
about environmental issues. This firm level response would result
in the firm's supply chains to focus on using recycled packaging
materials and recycling process waste back into the manufacturing
process.
3.3. Items that were important in high environmental emphasis
scenario

3.2. Items that were important in low environmental emphasis China and India are among many countries that have been having
scenario a consistently high economic growth in this century but presently
having lesser emphasis on environmental issues. However, this may
Low environmental emphasis scenario is the current Indian not continue in this fashion given the increasing awareness of
context. Many experts from the policy and industry circles think environmental issues to various stakeholders in a society. Thus the
important items in this section, as described in Table 4 below, would
Table 3 be critical to the management of firms in the coming years.
Green supply chains-low environmental emphasis scenario. In a high environmental emphasis scenario, customers would
be insisting on buying more products made from environmentally
Question Important items
friendly components. Firms would respond to this demand from
Consumption related issues Educating themselves about environmental customers by focusing on (i) pollution prevention by means of
issues approaches such as emissions reduction, (ii) capturing environ-
Company level responses Reducing energy consumption mental information such as energy use and carbon emissions and
Educating employees about important
environmental issues
(iii) reporting performance along environmental information such
Expected changes to the Using recycled packaging materials as energy use and carbon emissions. This firm level response
supply chains Recycling process waste back into the would result in the firm's supply chains to focus on (i) building
manufacturing process products with environmentally friendly materials and (ii) design-
ing and developing processes keeping in mind their environmen-
tal impact (Fig. 2).
Table 4
Green supply chains-high environmental emphasis scenario.
3.4. Items that were important irrespective of the environmental
Question Important items emphasis scenario
Consumption related Buying more products made from environmentally
issues friendly components We find the presence of certain trends to be significant irrespec-
Company level Pollution prevention by means of approaches such tive of the economic growth. These trends, described in Table 5,
responses as emissions reduction reflect some of the issues that face firms and supply chains in
Capturing environmental information such as emerging economies. On the consumption side, we did not notice
energy use and carbon emissions
any item that was significant irrespective of what the environmental
Reporting performance along environmental
information such as energy use and carbon emphasis was. However, it was noticed that irrespective of the
emissions environmental emphasis, firms believe in (i) reducing total emis-
Expected changes to the Building products with environmentally friendly sions generated and (ii) improving performance on energy use and
supply chains materials
carbon emissions. This in turn would make supply chains to focus on
Designing and developing processes keeping in
mind their environmental impact (i) capturing environmental information such as process waste and
materials recycling and (ii) improving on environmental parameters

Environmental Governance Policy Customer Issues Company Response Sustainability

Supply Chain Design
Green
Green Design
Purchasing

Sustainability
Strategy
Product
Recovery

Green
Changes in
Customer
Environmental
Consciousness
Emphasis Policy
Reverse
Supply Chains

Fig. 2. Induced research framework.

 J. Jayaram, B. Avittathur / Int. J. Production Economics 164 (2015) 234–244 239

such as process waste and materials recycling, irrespective of what was positive for all the factors indicating that the scores were
the environmental emphasis is. higher in the high environmental emphasis scenario for all the
factors. The correlations among the different factors is shown in
Fig. 3.
3.5. Factors and their correlations

Each measure described in the methodology section was 4. Discussion

converted into a factor in the following manner. The total score
arrived at by adding the scores obtained in the different items in a
measure for a particular environmental emphasis was divided by
the number of items in that measure to arrive at a score for that
measure in that environmental emphasis scenario. Next, the
difference between these scores for the high and low environ-
mental emphasis scenarios was determined and was termed the
factor score for this measure. Table 6 describes the mean and
standard deviations of these factor scores. The mean difference
Table 5
Green supply chains-both environmental emphasis scenarios.
The analyses of factor scores led to the induced research frame-
work which could be tested in future research. In the ensuing
paragraph, we discuss each relationship that is embedded in the
induced research framework along with the implications for under-
standing sustainability supply chain issues in India. To a certain
extent, the strength of the relationships from our analyses of a large
Delphi study suggests the importance of these key constructs in the
Indian context. Such a parsimonious model and research framework
will help advance further study in this important emerging econ-
omy context.

Question Important items 4.1. Implied hypotheses from the induced research framework

Consumption related None The insights from the field based inquiry broadly cover expected
issues
changes in future supply chains, especially within the sustainability
Company level responses Reducing total emissions generated
Improving performance on energy use and carbon domain in the context of the emerging economy of India. While
emissions most of the past literature, (with a few exceptions), have reported
Expected changes to the Capturing environmental information such as low environmental emphasis in most countries, especially from the
supply chains process waste and materials recycling view point of governance issues in emerging economies. The
Improving on environmental parameters such as
process waste and materials recycling
exception might be in developed economies of Germany, Holland,
Sweden and Denmark (to name a few). Any greening initiative that
automatically translates into customer benefits and improvements
in firm performance could be traced easily firms. However, the
challenges to firms emerge while implementing greening initiatives
Table 6
Descriptive statistics. that may have no bearing on financial performance which is typical
of contexts in which conventional performance measures cannot be
Question and factors Sample Environmental emphasis used (Young et al., 2010; Bai and Sarkis, 2010). For instance, the end
size goal might be sustainability supply chain design per se and not on
Low mean High mean
(SD) (SD)
outcomes. Many changes with regards to greening supply chains
may be through a change in the external environment (movement
Consumption related issues from low environmental emphasis to high environmental empha-
1. Green procurement (C1) 65 3.015 (0.980) 4.300 (0.695) sis). Therefore, the research objective is whether the changes in
2. Green consciousness (C2) 65 3.081 (0.839) 4.115 (0.776)
customer related measures and the consequent changes in a firm's
Company level responses
1. Sustainable firm (F) 65 3.245 (0.774) 4.383 (0.584) sustainability strategy are positively associated with each other and
Expected changes to the supply also with the expected changes to supply chains as a result of
chains environmental emphasis changing from low to high. Finally, we
1. Product recovery (S1) 65 3.164 (0.793) 4.341 (0.527) are interested in exploring the linkage from sustainability strategy
2. Reverse supply chains (S2) 65 3.059 (0.786) 4.126 (0.636)
3. Green designs (S3) 65 2.974 (0.910) 4.272 (0.645)
and environmental supply chain design. We elaborate on these
relationships below.

Fig. 3. Factor correlations.

240 J. Jayaram, B. Avittathur / Int. J. Production Economics 164 (2015) 234–244
4.2. Link between environmental governance policy and customer
issues
As mentioned earlier, the starting point of our research induced
framework is the change in environmental governance issues from
low to high. These represent conscious governance mechanisms to
influence and inform sustainability issues. For instance, in the
consumer world, such policy issues might result in customers
making choices in their product and service selections with a view
of less harmful impact on the environment. For instance, buying
products and services from companies that are known for their
environmental excellence such as BMW, Apple and Nike. In the
Indian context, examples include the quick adoptions of hydro-
chloro-fluoro-carbon refrigerants and CFL bulbs. This has also been
studied in a recent study by Ghosh and Shah (2012) who com-
pared the effectiveness of different greening policies across a
variety of supply chain structures. Accordingly, we propose a link
between changes in environmental policy making and green
purchasing as under:
H1. Changes in environmental policy making (when the environ-
mental emphasis changes from low to high) is positively asso-
ciated with the customer related measure of green purchasing.
The green consciousness items include reducing non-
renewable energy consumption, educating employees about envir-
onmental issues, and paying more attention to environmental
records and standards of suppliers. Examples of the increase in
consumer green consciousness in India include significant phasing
out of kerosene and firewood stoves and replacing them with bio-
gas and solar powered stoves. In the category of educating
employees and citizens on sustainability issues in India, non-
governmental organizations such as Oxfam India and Center for
Environmental Education have been especially effective. Also,
higher awareness of the effects of disposing plastic bags post-use
on landfills. This resulted in legislative mandates on the effective
disposal of plastic bags and goods. Yet another example is how
leading edge firms are pursuing ISO 14001 standards to gain
legitimacy from global customers. Accordingly, we propose a link
between changes in environmental policy making and green
consciousness as under:
H2. Changes in environmental policy making (when the environ-
mental emphasis changes from low to high) is positively asso-
ciated with the customer related measure of green customer
consciousness.
4.3. Link between customer issues and sustainability strategy
Given the low environmental emphasis in India it would also
be expected that Indian firms may not have a sophisticated
sustainable strategy. However, there are examples of Indian firms
that have crafted strong sustainability strategies as a response to
green purchasing and green customer consciousness. For the sake
of simplicity, we discuss both trends of green purchasing and
green customer consciousness together. It is expected that green
customer consciousness drives the need for green purchasing. One
of the leading green firm in India, Godrej and Boyce, has a “Good
and Green” program and is also famous for development of
environment friendly refrigerators and air conditioners, which
was in response to green purchasing needs expressed by custo-
mers. Many large industrial groups like Hindustan Unilever, ITC
and Tata have sustainability strategies that compare fairly well in
sophistication with their counterparts in developed countries,
which have been a response to the increasing green consciousness.
For example, all three companies have taken into account the
voice of the customer and in particular, the rural customer to
design eco-effective products that meets the ‘green’ needs of the
customer. Also, companies like Hindustan Lever has worked with
NGOs to educate and involve rural citizens especially women in
reaching out the eco-friendly products into their local environ-
ments. This has not only expanded environmental consciousness
among the promoters (rural women) but also extended to the
customers that these promoters have reached. Accordingly, we
propose links between changes in green purchasing and green
consciousness with firm's sustainable strategy as under:
H3. The customer related measure of green purchasing is posi-
tively associated with a firm's sustainability strategy.
H4. The customer related measure of green customer conscious-
ness is positively associated with a firm's sustainability strategy.
4.4. Link between sustainability strategy and sustainability supply
chain design
The product recovery items include building products with
environmentally friendly materials, having environmental stan-
dards as selection criterion for suppliers, having environmental
audits for suppliers, recycling process waste back into the manu-
facturing process, capturing environmental information such as
process waste and materials recycling and improving on environ-
mental parameters such as process waste and materials recycling.
These are again actions that materialize only when a clear
sustainable strategy is in place. Firms like ITC have gone from a
profit maximization approach to the triple bottom line approach,
where performance is also measured on environmental issues.
This has enabled them to bring out many initiatives on product
recovery like solid waste recycling and rain water harvesting. This
leads to the following hypothesis:
H5. A firm's sustainability strategy is positively associated with
product recovery strategies.
There should be alignment between a firm's sustainability
strategy and its reverse logistics strategy. For example, products
should be designed with a view of possibility of some parts being
recovered or recycled. In addition, the ease with which these
products can be remanufactured from salvaged or virgin materials
should be considered. Also, from a packaging point of view, the
possibility of repeated use of the same packaging materials (such
as pallets) in a closed loop should be investigated. One such
example is the use of recycled materials for packaging. A focus
on reducing energy has a key influence on structuring key aspects
of reverse logistics design. Return centers should be close to
customer sites in order to limit transportation times and costs.
The size of these centers should be commensurate with return
rates. Another example is the use of third party providers for
dealing with returns, setting up recycling and disposal depots. In
general, collaborations with supply chain partners in recycling and
remanufacturing strategies requires the alignment of the firms
overall sustainability strategies with its reverse logistics strategy.
Also, a focus on educating employees as a key part of sustainability
strategy has a key influence on staffing the reverse supply chains.
Employees with knowledge of local trends are a great asset that
can eventually lead to successful reverse logistics efforts. Taken
together, these suggested patterns lead to the following
hypothesis:
H6. A firm's sustainability strategy is positively associated with
reverse logistics strategies.
The green design items include designing supply chain perfor-
mance measures, products and processes keeping in mind the
environmental impact. Lack of a clear firm level sustainability
 J. Jayaram, B. Avittathur / Int. J. Production Economics 164 (2015) 234–244
strategy makes the task of green design even more challenging.
The Indian firms with clear sustainability strategies, mentioned in
our examples earlier, have also been leading the industry in terms
of introducing greener products and processes and in making their
supply chains greener. For example, these firms have allocated
resources specifically to environmental projects that enhance the
sustainability missions of these companies and this in turn has
guided eco-design strategies. Measures such as reducing carbon
footprint, improving energy usage and efficiency have guided
choices in the firm's product designs. Given the context of India,
this means an entirely different challenge as the constraints on
resources are fairly severe and also the specific needs of the
customer (post-purchase) should be inherently built in during
the product design phase. Accordingly, we propose that:
H7. A firm's sustainability strategy is positively associated with
green design strategies.
4.5. Limitations of the study
This study takes into account the views of supply chain
managers in India with a vast experience base to come up with
a field based induced research framework. Ideally, it would have
been better to use constructs from the literature to test the validity
of those constructs in a large scale study in India. As the state of
the art with respect to sustainability is still in an evolving (not
mature) stage, we chose to use the field based approach. It is quite
likely that the views of the supply chain managers are restricted to
the domain of influence that they are familiar with. Nevertheless,
it is not expected that this will bias the generation of our overall
research framework as the trends that are sought to be captured
are at a broader and general level.
4.6. Contributions to academic body of knowledge
This paper takes an unique large scale Delphi approach and
uses the grounded theory approach to come up with a field based
induced research framework that examines the antecedents and
consequences of sustainability strategy in India. In a recent
special issue that summarized sustainability issues in Asia,
Tseng et al. (2013) collated articles that combined ‘top-down’
green efforts by policy makers and ‘bottom-up’ efforts by com-
panies in the supply chain in order to impute ramifications on
green supply chain management. Many existing studies on the
topic of green supply chain management have solely examined
issues pertaining to barriers to green SCM in the Indian context
(Govindan et al., 2014; Muduli et al., 2013; Mathiyazhagan and
Haq, 2013; Luthra et al., 2011). A few other studies have looked at
drivers to Green SCM in the Indian context (Bhool and Narwal,
2013). Yet a handful of studies like the study of Singh and
Bharadwaj (2013) and Bhateja et al. (2011) have taken an
approach similar to ours. For instance, Meera and Chitramani
(2014) examine green SCM trends within one state of India,
namely Tamil Nadu. In contrast to these studies, our study, to the
best of our knowledge takes a futuristic approach that is context
dependent based on the growth of the economy. Most other
studies take into account past actions while it is also necessary to
consider future projections as well.
In the same vein and by departing from prior studies that took
a deductive approach, this study takes a mixed approach that
241
takes into account institutional theory to arrive at the initial
interview protocol questions and then the inductive insights of
managers to arrive at the refined research framework. The
customer pressures and governmental regulations part of institu-
tional isomorphism theory was largely supported in the Indian
environment. Moreover, sustainability strategy at the firm level
was found to influence key aspects of green supply chain manage-
ment design. Specifically, eco design, product recovery and reverse
logistics were found to be key aspects of green supply chain
management design.
5. Conclusions
5.1. Managerial implications
In the resource constrained environment of India, our frame-
work points to key practices in green procurement, key customer
related green trends that need to be considered, firms sustain-
ability strategy and facets of green supply chain management
design. Collectively, the practices within each category can serve
as an audit tool and later on as a benchmarking tool for firms to
assess their performance in each category. This assessment can
then in turn to lead to gap analyses and structuring specific
continuous improvement projects to fill the gaps. By connecting
our insights to grounded theory, this study shows the importance
of customer influence on sustainability strategies and in turn the
influence of sustainability strategies at the headquarter level on
the design of green supply chains. By using the measures for each
of the constructs in our framework, managers can use the findings
of this study as an audit tool by managers entrusted with
sustainability programs across the facets of green design, product
recovery and reverse supply chains.
Also, our findings point to the benefit of benchmarking pro-
grams which can be used by managers to compare against the best
in class to improve their own sustainability efforts. Specific targets
for sub categories can be used to track overall progress.
5.2. Future research
A key part of this study is to arrive at a research framework
with testable hypotheses for future research. A large scale valida-
tion of our framework in the context of India could be the next
logical step. Other theories such as natural resource based view of
the firm can also be tested in the context of India. Single industry
studies such as firms in the auto-industry, textile industry and
electronics study can separately studied as they represent those
industries in India in which the environmental pressures and
the need to cope against those pressures are at the highest level.
Also, specific studies that examine the family business context
(see Jayaram et al., 2014) or small and medium enterprises in India
on the topic of green supply chains could be pursued. Also, the
stage in the supply chain can be an important context to study
(see Kumar and Chandrakar, 2012), Finally, comparisons of emer-
ging studies in India, China and Brazil can be used in a cross
national synthesis of studies that examine sustainability issues in
those contexts.
242 J. Jayaram, B. Avittathur / Int. J. Production Economics 164 (2015) 234–244

Appendix A

See Table A1.

Table A1

Questionnaire: Respondents Ranking of

who chose 4 or item (within
5 (%) question)

For the statements given below, please choose a number between 1 and 5 for each of the two scenarios to indicate how much you Environmental Environmental
agree with the same (1 ¼ Strongly disagree; 2¼ Disagree; 3¼ Neutral; 4 ¼Agree; and 5¼ Strongly agree). emphasis emphasis
Low High Low High
Customer related issues (Mobley et al., 1995; Essousi and Linton, 2010; Wang et al., 2013; Scarpa and Willis, 2010; Herring, 2006;
Young et al., 2010; Bai and Sarkis, 2010; Nishitani, 2010): Compared to their current behavior, customers in upcoming years
would be:
Green procurement:
1. Buying more recycled products 27.7 81.5 6 3
2. Buying more products made from environmentally friendly components 36.9 89.2 2 1
Green consciousness:
3. Reducing their consumption from non-renewable energy resources 32.3 70.8 4 6
4. Educating themselves about environmental issues 38.5 83.1 1 2
5. Paying more attention to environmental performance records of sellers/producers 29.2 80.0 5 4
6. Asking for ISO 14000 environmental management standard of the sellers/producers 35.4 73.8 3 5
Company level responses to changes in the above “customer related issues” (Hart and Dowell, 2011; Lin, 2012; Lubin and Esty,
2010; Ameer and Othman, 2012; Galbreth and Ghosh, 2012; Arnold and Hockerts, 2011; Curkovic and Sroufe, 2011): Compared to
current goals, company objectives in upcoming years would be to:
1. Pollution prevention by means of approaches such as emissions reduction 40.0 95.4 7 1
2. Increasing share of renewable energy 43.1 83.1 5 10
3. Reducing energy consumption 60.0 89.2 1 7
4. Reducing total emissions generated 47.7 92.3 2 3
5. Allocating money and other resources for environmental initiatives 30.8 89.2 10 7
6. Capturing environmental information such as energy use and carbon emissions 38.5 92.3 8 3
7. Improving performance on energy use and carbon emissions 46.2 93.8 3 2
8. Reporting performance along environmental information such as energy use and carbon emissions 35.4 92.3 9 3
9. Educating important external stakeholders such as customers, stockholders and the community about environmental issues 30.8 81.5 10 11
10. Educating important employees about environmental issues 46.2 90.8 3 6
11. Adopting ISO 14000 environmental management standards 41.5 89.2 6 7

Expected changes to the supply chains: compared to current practices, emphasis of firms in coming years would be on:
Product recovery (Carter and Jennings, 2002; Chiou et al., 2011; Gavronski et al., 2011; Gunasekaran and Spalanzani, 2012; Zhu et al.,
2013):
1. Building products with environmentally friendly materials 33.8 90.8 9 3
2. Having environmental standards as selection criterion for suppliers 33.8 89.2 9 5
3. Having environmental audits for suppliers 26.2 80.0 11 10
4. Recycling process waste back into the manufacturing process 53.8 80.0 1 10
5. Capturing environmental information such as process waste and materials recycling 43.1 93.8 4 1
6. Improving on environmental parameters such as process waste and materials recycling 49.2 93.8 2 1
Reverse supply chain (Thun and Müller, 2010; Chiou et al., 2011; Gavronski et al., 2011; Gunasekaran and Spalanzani, 2012; Zhu et al.,
2013):
7. Remanufacturing, that is re-building products where some parts are recovered or recycled 38.5 81.5 6 9
8. Using returnable packaging materials 35.4 73.8 8 13
9. Using recycled packaging materials 47.7 86.2 3 7
10. Using third party providers for dealing with issues such as recycling and disposal 21.5 73.8 14 13
11. Collaborations with supply chain partners in recycling and remanufacturing 26.2 80.0 11 10
Green design (Chiou et al., 2011; Gavronski et al., 2011;Gunasekaran and Spalanzani, 2012; Zhu et al., 2013):
12. Designing performance measures for more environmental friendly supply chains 24.6 83.1 13 8
13. Designing and developing products keeping in mind their environmental impact 38.5 87.7 6 6
14. Designing and developing processes keeping in mind their environmental impact 41.5 90.8 5 3

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