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The Impact of Green Supply Chain Integration On Sustainable Performance
The Impact of Green Supply Chain Integration On Sustainable Performance
The Impact of Green Supply Chain Integration On Sustainable Performance
https://www.emerald.com/insight/0263-5577.htm
The impact of
The impact of green supply green supply
chain integration on chain
integration
sustainable performance
Zhaojun Han 657
Institute of Systems Engineering,
Received 10 July 2019
Dalian University of Technology, Dalian, China, and Revised 17 October 2019
Baofeng Huo Accepted 11 December 2019
Abstract
Purpose – The purpose of this paper is to explore the impact of green supply chain integration (GSCI) on
sustainable performance which includes environmental, social and economic performance.
Design/methodology/approach – Based on data collected from 206 Chinese manufacturers, this study uses
structural equation modeling with the maximum-likelihood estimation method to test the theoretical model.
Findings – The results show that different dimensions of GSCI have different outcomes. Green internal
integration lays the foundation for green supplier integration (GSI) and green customer integration (GCI), and
is related to both environmental and social performance. GSI is positively related to economic performance,
whereas GCI is positively related to social performance.
Originality/value – Believing that “how to be green” matters, this study focuses on an integrative approach
to green supply chain management (GSCM), shedding new light on how GSCI influences performance and
providing practical guidelines for different stakeholders.
Keywords Green supply chain management, Supply chain integration, Sustainable performance
Paper type Research paper
1. Introduction
Green supply chain management (GSCM), which integrates environmental concerns into
supply chain management (SCM) (Srivastava, 2007), has emerged as an important strategy
for companies to respond to the growing public environmental awareness and the rising
government regulations (Laosirihongthong et al., 2013). Despite its prevalence, managers
and researchers are still being haunted by the question of “does it pay to be green” (Preuss,
2005; Schmidt et al., 2017; Wong et al., 2018). Previous studies have reported positive,
negative or insignificant relationships between GSCM practices and performance (Golicic
and Smith, 2013). Many efforts have tried to reconcile these inconsistent findings (e.g. Ahi
and Searcy, 2013; Geng et al., 2017; Golicic and Smith, 2013; Sarkis et al., 2011). Yet, few
studies have noted the possibility that how GSCM is implemented may make a difference.
Our study attempts to bring clarity to this ongoing debate on “does it pay to be green” by
adding a dimension of “how to be green.”
Several scholars have acknowledged that there are different approaches to GSCM
(e.g. Bowen et al., 2001; Tachizawa et al., 2015). The most common one is referred to as the
functional approach (Geng et al., 2017; Kirchoff et al., 2016; Vanalle et al., 2017), proposed by
Zhu and her colleagues (e.g. Zhu and Sarkis, 2007; Zhu and Sarkis, 2004; Zhu et al., 2005).
This approach encompasses five green practices and mainly focuses on green practices in
specific functional areas such as green purchasing or green design, and thus describes a
green transactional relationship between supply chain partners (Gunasekaran et al., 2015). Industrial Management & Data
Another common approach to GSCM is the collaborative approach proposed by Vachon and Systems
Vol. 120 No. 4, 2020
pp. 657-674
© Emerald Publishing Limited
This research was supported by the National Natural Science Foundation of China (Nos 71802039, 0263-5577
71525005, 71431002). DOI 10.1108/IMDS-07-2019-0373
IMDS Klassen (2006), which mainly focuses on jointly resolving environmental problems and
120,4 describes a collaborative relationship between supply chain partners.
The functional approach is the initial effort to extend green practices across supply
chains, while the collaborative approach highlights the importance of supply chain
collaboration (Wong et al., 2015). Yet, the level of supply chain involvement described in
these two approaches is too low, limiting the effectiveness of GSCM. Building on these two
658 approaches and the supply chain integration (SCI) literature, some recent studies propose an
integrative approach to GSCM (Song et al., 2017; Wong et al., 2015; Wu, 2013) and have
coined the term green supply chain integration (GSCI). This approach emphasizes strategic
collaboration and integration between supply chain partners in jointly managing intra- and
inter-organizational green processes (Flynn et al., 2010; Wong et al., 2015). It enables a
concerted and integrated effort of the entire supply chain (Wong et al., 2015), thereby may be
a more effective way of greening supply chains.
Though some scholars have recognized the importance of GSCI and have discussed its
implications for performance (e.g. Song et al., 2017; Wong et al., 2018), the conceptualization
and operationalization of GSCI are still ambiguous and inconsistent; the empirical evidence
on how GSCI influences performance is still scarce. To advance the understanding of this
integrative approach, our study draws on the SCI literature and the natural-resource-based
view (NRBV ) to develop a theoretical framework of GSCI and investigates how different
dimensions of GSCI influence sustainable performance which includes environmental, social
and economic performance.
Achieving sustainability has become a new strategic lever and been high on the agenda of
many leading firms and supply chains (Kang, 2018). Existing GSCI studies have not paid
attention to this important facet of performance. Even in the broad field of GSCM, the
predominant focus has been on how GSCM influences environmental or economic performance
(Golicic and Smith, 2013; Li et al., 2016; Zhang and Yang, 2016; Zhu and Sarkis, 2007). Social
performance has received scant attention (De Giovanni, 2012; Pagell and Wu, 2009). Our study
tries to fill this gap and shed new light on how the integrative approach to GSCM influences
sustainable performance. This is also important to the debate on “does it pay to be green” in
that we raise the concern that economic profits should not be the only metric.
Overall, by investigating the impact of GSCI on sustainable performance, our study
contributes to the understanding of “does it pay to be green” in two ways. First, we add a
dimension of “how to be green.” Second, we propose that sustainable performance may be a
more appropriate metric.
3. Methodology
3.1 Sampling and data collection
Given the uneven economic development in China, we collected data from manufacturing
companies located in both economically developed regions, including Bohai Bay Economic
Rim, Pearl River Delta and Yangzi River Delta, and other regions that are less economically
developed, including northeastern, central and western China. In the selected regions, we
used the directory provided by National Bureau of Statistic of China as our sampling pool.
We called each randomly selected company to identify a key informant and his/her
agreement to participate. The key informant should be knowledgeable about their supply
chain’s green activities; thereby, they should have a title such as supply chain manager,
purchasing manager, marketing manager, vice president or CEO/president.
We mailed the questionnaire, along with a cover letter explaining the objectives of this
study. We also highlighted potential contributions to the participating companies in the
cover letter. To improve response rate, we made follow-up phone calls and reminding
e-mails (Chen et al., 2016). Out of 2,820 companies contacted, 812 companies agreed to
participate. There were 206 usable questionnaires returned, yielding a response rate of
25.4 percent based on the questionnaires distributed. Table I provides the profile of the
S-GIS The impact of
Green supplier Environmental green supply
S-GPC H2b
integration performance chain
S-GSA H3b integration
H1a H4b
I-GIS
H2a 663
Green internal Social
I-GPC
integration H3a performance
I-GSA H4a
H1b H2c
C-GIS
H3c
Green customer Economic
C-GPC H4c
integration performance
C-GSA
Figure 1.
Notes: S, supplier; I, internal; C, customer; GIS, green information sharing; Conceptual model
GPC, green process coordination; GSA, green strategic alignment
Industries Region
Metal, mechanical and engineering 40.8 Bohai Bay Economic Rim 35.4
Electronics and electrical 19.4 Yangzi River Delta 24.8
Textiles and apparel 10.2 Pearl River Delta 19.9
Chemicals and petrochemicals 7.8 Other areas in China 19.9
Food, beverage, alcohol and cigarettes 6.3
Building materials 4.9
Publishing and printing 4.4
Rubber and plastics 3.9
Pharmaceutical and medicals 2.4
Number of employees Ownership
o50 1.0 State owned 16.0
50–99 1.0 Privately owned 53.9
100–199 23.3 Foreign owned 19.4
200–499 34.0 Joint venture 10.7
500–999 18.0 Table I.
1,000–4,999 18.4 Profiles of responding
5,000 or more 4.4 companies
sample companies. It shows that the sample represents a variety of industries and firm sizes.
Table II provides the information about the respondents. Most of them were middle or top
managers and had been in their positions for six or more years. Thus, they should be
knowledgeable about their companies’ GSCI activities and performance.
3.2 Measures
All our measures were developed based on previous studies. First, we searched the previous
literature to develop valid measures for our constructs. Second, since the initial
questionnaire was developed in English, we transferred it into Chinese by a SCM professor
IMDS Distribution variables Percentage
120,4
Tenure of current position in firm (years)
⩽1 0
2–5 23.3
6–10 39.8
11–15 18.9
664 ⩾16 18.0
Position of respondent
Top manager (e.g. presidents, CEO, director and deputy of these positions) 22.3
Table II. Middle manager (e.g. manager of purchasing, marketing, production and other
Respondent operations-related positions) 76.2
characteristics Others (e.g. purchaser and salesman) 1.5
in China. The Chinese version was then back-translated into English by the other two SCM
professors to check against the original English version for equivalence. Finally, we ran a
pilot test with 18 companies and conducted in-depth interviews with managers in the
meanwhile to refine the questionnaire. Based on their feedback, we modified the wording of
some items to guarantee that all items were understandable and relevant to GSCI practices
in China. The measures for our constructs are shown in Table AI.
We used a seven-point Likert scale to capture respondents’ perception of the levels of
their GSCI practices and performance. As we stated before, we define each dimension of
GSCI (GSI, GII and GCI) as a second-order construct, composing of GIS, GPC and GSA. The
measures for these three first-order constructs were adapted from Vachon and Klassen
(2006), Flynn et al. (2010) and Wong et al. (2015). Respondents were asked to rate the extent
to which their companies had implemented these practices, with “1” indicating the practices
were not at all implemented and “7” indicating they were extensively implemented. The
measures for environmental performance were adopted from Zhu and Sarkis (2004). The
measures for economic performance were adopted from Flynn et al. (2010). The measures for
social performance were adopted from De Giovanni (2012). The respondents rated the
performance measures compared with their major competitors, with “1” meaning “much
worse” and “7” meaning “much better.”
4. Results
We employed structural equation modeling (SEM) to test our hypotheses, using LISREL
8.54 with the maximum-likelihood estimation method. The goodness of fit indices of our
model were acceptable ( χ2 (1,575) ¼ 2,841.96, NNFI ¼ 0.98, CFI ¼ 0.98, RMSEA ¼ 0.062
and SRMR ¼ 0.11), according to the suggested threshold values (Hu and Bentler, 1999).
Figure 2 shows the SEM results with standardized coefficients for the significant paths.
5. Discussion
5.1 Major findings
In line with both the literature on GSCM and SCI (e.g. De Giovanni, 2012; Wong et al., 2018;
Zhao et al., 2011), our results find that GII is positively related to GSI and GCI. This
strengthens the important role of internal integration in the GSCM field that how green
activities are implemented within companies may expand across supply chains.
Our results also find that, out of the three dimensions of GSCI, only GII is positively
related to environmental performance, whereas the effects of GSI and GCI are
nonsignificant. These findings contradict with those of studies adopting a functional or
collaborative approach, which report a positive relationship between external
environmental collaboration and environmental performance (De Giovanni, 2012;
Construct 1 2 3 4 5 6
Tachizawa et al., 2015). Yet, our findings are consistent with the findings of Wong et al.
(2018), which also adopts the integrative approach and only finds internal sustainable
development to influence environmental performance. This suggests that the integrative
approach is indeed different from the functional and collaborative approach. Integration
with suppliers and customers is much more complex and difficult. It requires suppliers and
customers to devote more resources and to participate at multiple levels. It is possible that
the current level of GSI and GCI is too low to enhance environmental performance. Yet, we
acknowledge that such a statement warrants more evidence.
In terms of social performance, our results find that GII and GCI are positively related to
social performance, whereas GSI is not. These findings are partially supported by previous
studies. For example, De Giovanni (2012) and Geng et al. (2017) both find that internal
environmental management has a positive relationship with social performance and the
effect of external environmental collaboration is nonsignificant. The reason why we find
GCI to positively influence social performance may be that customers are always assumed
to hold responsibilities for their upstream parties’ unsustainable behaviors (Lee et al., 2012;
Vanalle et al., 2017). For example, Apple and Nike were blamed for their suppliers’
sweatshop labor conditions. As such, when having opportunities, customers want
guarantees that their manufacturers behave properly. GCI offers customers such
opportunities to work closely with manufacturers at multiple levels, so that customers
can demand manufacturers to improve workplace safety and employee health and also help
them in the process. Apparently, a loosely connected relationship with customers is not
sufficient to offer customers such opportunities. On the contrary, suppliers care less about
manufacturers’ social performance. Though having the opportunity to help manufacturers
address workplace safety or community welfare, suppliers are not motivated. Thus, GSI
does not have a significant impact on social performance.
In terms of economic performance, we find that out of the three dimensions, only GSI
leads to better economic performance. These results are in line with the previous literature.
For example, Zhu and Sarkis (2007), Green, Zelbst, Meacham and Bhadauria (2012) and
Schmidt et al. (2017) all point out that working with suppliers on green practices is less
costly than the other green practices. This is especially true with respect to the integrative The impact of
approach. The integrative approach indicates that supply chain partners are supposed to green supply
share risks and costs of going green (Zhu et al., 2005). Since downstream parties are chain
normally more powerful than upstream parties (Ha et al., 2011), it is more likely that
upstream suppliers share more costs. Therefore, green integration with suppliers is integration
positively related to focal firms’ economic performance, whereas GII and GCI are not. In fact,
it is acknowledged that green activities, such as GII and GCI, may need more time to 667
generate profitability (Golicic and Smith, 2013; Wong et al., 2018).
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IMDS Appendix
120,4
Table AI.
Survey items (continued )
Items Loadings t-value
The impact of
green supply
CIS3: our company and our major customer can search for green-related operational data chain
in real time 0.88 17.12
CIS4: our major customer shares green requirement information with us 0.86 16.16 integration
CIS5: our company shares green information of products with our major customer 0.85 15.95
Customer-green process coordination (AVE ¼ 0.687; composite reliability ¼ 0.916; Cronbach’s α ¼ 0.919) 673
CPC1: our company and our major customer work together to incorporate environmental –
issues in our product design process (e.g. reduce material/energy consumption; increase
the use of environment-friendly materials) 0.85
CPC2: our company and our major customer work together to incorporate environmental
issues in our manufacturing process 0.88 16.13
CPC3: our company and our major customer work together to incorporate environmental
issues in our delivery process 0.90 16.94
CPC4: our company and our major customer work together to establish a recycling
process for used and defective products 0.77 13.10
CPC5: our company and our major customer work together to better manage the disposal
of industrial wastes (e.g. waste water, gas and residue) 0.73 12.10
Customer-green strategic alignment (AVE ¼ 0.726; composite reliability ¼ 0.930; Cronbach’s α ¼ 0.943)
CSA1: our company and our major customer jointly make each other’s green strategy 0.82 –
CSA2: our company and our major customer have a good understanding of each other’s
green objectives 0.84 16.15
CSA3: our company and our major customer continuously revise green plans to adapt to
changes 0.85 16.73
CSA4: our company and our major customer jointly make green plans 0.89 18.43
CSA5: our company and our major customer jointly make environmental policies (e.g.
environmental objectives, actions, performance measurements) 0.86 17.15
Supplier-green information sharing (AVE ¼ 0.747; composite reliability ¼ 0.937; Cronbach’s α ¼ 0.948)
SIS1: green data sharing between our major supplier and us (e.g. emission data; energy –
consumption data) 0.85
SIS2: our company and our major supplier establish communication channels to share
green information 0.87 16.37
SIS3: our company and our major supplier can search for green-related operational data in
real time 0.89 17.25
SIS4: our major supplier shares green requirement information with us 0.87 16.54
SIS5: our company shares green information of products with our major supplier 0.84 15.59
Supplier-green process coordination (AVE ¼ 0.712; composite reliability ¼ 0.925; Cronbach’s α ¼ 0.934)
SPC1: our company and our major supplier work together to incorporate environmental –
issues in our product design process (e.g. reduce material/energy consumption; increase
the use of environment-friendly materials) 0.87
SPC2: our company and our major supplier work together to incorporate environmental
issues in our manufacturing process 0.91 19.00
SPC3: our company and our major supplier work together to incorporate environmental
issues in our delivery process 0.87 17.41
SPC4: our company and our major supplier work together to establish a recycling process
for used and defective products 0.79 14.57
SPC5: our company and our major supplier work together to better manage the disposal
of industrial wastes (e.g. waste water, gas and residue) 0.77 13.75
Supplier-green strategic alignment (AVE ¼ 0.751; composite reliability ¼ 0.938; Cronbach’s α ¼ 0.952)
SSA1: our company and our major supplier jointly make each other’s green strategy 0.80 –
SSA2: our company and our major supplier have a good understanding of each other’s
green objectives 0.87 17.24
Corresponding author
Baofeng Huo can be contacted at: baofeng@tju.edu.cn
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