Industrial Marketing Management 41 (2012) 621–630

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Industrial Marketing Management

Environmental orientation and corporate performance: The mediation mechanism of

green supply chain management and moderating effect of competitive intensity
Ricky Y.K. Chan a,⁎, Hongwei He b, Hing Kai Chan c, William Y.C. Wang d
a
Department of Management and Marketing, Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong
b
Warwick Business School, University of Warwick, Coventry, UK
c
Norwich Business School, University of East Anglia, Norwich, UK
d
Department of Business Information Systems, Auckland University of Technology, New Zealand

a r t i c l e i n f o a b s t r a c t

Article history: This study proposes and empirically tests a model delineating the relationship among environmental orien-
Received 28 April 2011 tation, green supply chain management (GSCM) activities (green purchase, customer cooperation and invest-
Received in revised form 30 January 2012 ment recovery) and corporate performance. Based on responses from 194 foreign invested enterprises
Accepted 16 February 2012
operating in China, this study has generated several important findings. First, it demonstrates that while
Available online 5 May 2012
both internal and external environmental orientations exert a positive and significant influence on the prac-
Keywords:
tice of green purchase and customer cooperation, internal environmental orientation further serves as a sig-
Environmental orientation nificant driver for the practice of investment recovery. Second, it shows that the practice of these three major
Green supply chain management GSCM activities, in turn, significantly enhances corporate performance. Last, the study reveals that competi-
Corporate performance tive intensity strengthens the positive influence of customer cooperation on corporate performance. Overall,
China the findings explicate the importance for firms, in particular those operating in a highly competitive market
condition, to nurture a pro-environmental corporate culture and improve their sensitivity to salient external
stakeholders' environmental demands so as to pursue greener supply chain management.
© 2012 Elsevier Inc. All rights reserved.

1. Introduction oriented. Besides, although environmental management researchers

Owing to the emergence of various mega-developments such
as heightening societal concerns about ecological deterioration and
regulators' tightening environmental control over business activities,
firms today are under increasing pressure to act in an environmentally
oriented manner (Banerjee, Iyer, & Kashyap, 2003; Chan, 2010; Menon
& Menon, 1997). While ethicists advocate that firms' caring about their
environmental impacts is by itself a moral virtue, some strategists con-
ceive that understanding the strategic value for being more environ-
mentally oriented is of ultimate importance for sustainable corporate
success (Russo & Fouts, 1997). A quest of this understanding logically
requires researchers to address a central issue, namely whether and
how environmental orientation impacts on corporate performance.
In the environmental management literature, environmental orien-
tation refers to managerial recognition of the importance of environ-
mental issues facing firms (Banerjee, 2001, 2002). The prior literature
has documented a wide range of factors, such as institutional/regulatory
forces (Chan, 2010), stakeholder pressures (Banerjee, 2001), organiza-
tional resources and cultural factors (Banerjee et al., 2003; Menguc &
Ozanne, 2005), that may drive firms to be more environmentally
⁎ Corresponding author. Tel.: + 852 2766 7110; fax: + 852 2765 0611.
E-mail addresses: msricky@polyu.edu.hk (R.Y.K. Chan), hongwei.he@wbs.ac.uk
(H. He), H.Chan@uea.ac.uk (H.K. Chan), William.Wang@aut.ac.nz (W.Y.C. Wang).
have long believed that a firm's increased level of environmental orien-
tation will improve its strategic responses toward environmental issues,
and consequently its performance (e.g., Lindell & Karagozoglu, 2001),
their belief has yet to be fully validated. For instance, except for the
limited amount of prior research that demonstrated the positive effect
of environmental orientation on performance via pro-environmental
corporate strategic practices (Chan, 2010), previous investigations
often only focused on the bivariate correlation between environmen-
tal orientation and performance (Menguc & Ozanne, 2005) or even
omitted the performance implications of this orientation from the
analysis at all (Banerjee et al., 2003). As a result of this scant research
attention, the issue of how environmental orientation exactly influ-
ences corporate environmental practices as well as performance re-
mains largely unexplored.
Against the foregoing backdrop, this research aims to enrich the
extant literature by examining the mechanism underlying the envi-
ronmental orientation− performance relationship and the moderat-
ing influence of market condition on this mechanism. To this end
and to take advantage of cross-fertilization of related disciplines,
this research first proposes an important pro-environmental manage-
rial practice, green supply chain management (GSCM), as a mediator
of the influence of environmental orientation on corporate perfor-
mance. GSCM has recently attracted considerable academic interest
to explore its various strategic implications (e.g., Zhu, Geng, Sarkis,

0019-8501/$ – see front matter © 2012 Elsevier Inc. All rights reserved.
doi:10.1016/j.indmarman.2012.04.009
622 R.Y.K. Chan et al. / Industrial Marketing Management 41 (2012) 621–630
& Lai, 2011; Zhu & Sarkis, 2004; Zhu, Sarkis, & Geng, 2005). Despite
the potential for employing GSCM to improve marketing practices
(e.g., in terms of product and package design, marketing communication
and channel selection) and ultimately enhance firm competitiveness
(Closs, Speier, & Meacham, 2011), such employment has only received
scant attention from marketing researchers. Moreover, as regards
those GSCM investigations reported in other non-marketing (mostly
logistics and operations management) literature, they have invariably
omitted an important strategic variable, environmental orientation as
an antecedent from their analysis. Given that environmental orientation
relates closely to a firm's environmental practices (Banerjee, 2002), a
more comprehensive analysis of the impacts of environmental orienta-
tion on GSCM, and the performance implications of the latter is consid-
ered timely and important to bridge the gaps in the extant literature.
This research also tests how market condition (e.g. competitive in-
tensity) moderates the effect of environmental orientation on corporate
performance. This examination helps rectify the traditional internal
focus of prior resource-based research (Aragon-Correa & Sharma, 2003)
and advance understanding of the essential role that contextual condi-
tions may play in the transformation of environmental orientation into
such desirable organizational outcomes as ecologically responsible
supply chain practices and improved corporate performance. In short,
this study not only inspires marketing researchers to pursue investiga-
tions on this important yet neglected area, but also provides practitioners
with useful insights into fine-tuning their supply chain management
practices to outperform competitors in the marketplace.
2. Conceptual framework and hypothesis development
For reference, Fig. 1 presents the overall conceptual framework
and delineates the proposed relationships among internal and
Environmental
Orientation
H1a
Internal Environmental
Orientation
H1b
H1c
H2a
External Environmental
Orientation H2b
H2c
Note:
Dotted line denotes moderating effects
Fig. 1. The conceptual model.
external environmental orientations, GSCM activities and corporate
performance. Specifically, this study postulates that GSCM activities
mediate the influence of environmental orientation on corporate per-
formance. These proposed relationships are consistent with Banerjee's
(2002) notion of environmental orientation that concerns managers'
cognitive responses toward environmental issues facing firms. As such,
the impact of this orientation on performance is thus believed to be
realized only after translating into corresponding strategies. The pos-
tulated mediating effect of GSCM activities also echoes strategy re-
searchers' long-held premise that managerial perceptions need to be
translated into corresponding acts before influencing performance
(Anderson & Paine, 1975). It is believed that empirical examination
of these proposed relationships would enrich the limited amount of
prior research on environmental orientation. As highlighted earlier,
this prior research often omitted the performance implications of en-
vironmental orientation from its analysis (Banerjee et al., 2003), or
simply examined the bivariate correlation between this orientation
and performance (Menguc & Ozanne, 2005).
Besides the foregoing relationships, Fig. 1 also incorporates a pos-
sible market condition-related moderating variable, competitive in-
tensity, into the analysis (as mentioned). In the following literature
review, this paper will first elaborate on the concept of environmental
orientation and its performance implications. This will be followed by
a description of the concept of GSCM as well as how this corporate
environmental practice and environmental orientation together can
help explain corporate performance. Finally, it will explain why com-
petitive intensity moderates the effect of a particular GSCM activity
(customer cooperation) on corporate performance. This explanation
further highlights how the indirect impact of environmental orienta-
tion (via customer cooperation) on corporate performance is contin-
gent upon competitive intensity of the marketplace.
GSCM Activities Performance
Implications
Green
Purchase
H3a
Customer Corporate
Cooperation H3b Performance
H3c
Investment
Recovery
H4
Competitive Intensity
 R.Y.K. Chan et al. / Industrial Marketing Management 41 (2012) 621–630
2.1. Environmental orientation
As an important business principle to guide corporate environ-
mental practices, environmental orientation has long been regarded
as a core concept in the study of environmental management (Banerjee,
2002). Alongside this, Banerjee (2001) maintained that environmental
orientation is one of the two key factors (the other is environmental
strategy) for firms to pursue corporate environmentalism. Based on a
thorough literature review and in-depth interviews with senior execu-
tives, he conceptualized environmental orientation as the managerial
recognition of the significance of the impact a firm has on the environ-
ment, and the need to minimize such impact. He further postulated that
there exist two types of environmental orientation, internal and exter-
nal. Internal environmental orientation refers to the firm's internal
values and ethical standards regarding the level of commitment it
should render to environmental protection. It can be interpreted as a
pro-environmental corporate culture that manifests in a firm's formula-
tion of corporate policies and procedures regarding environmental pro-
tection, the elaboration of sustainability reports, and environmental
training for employees (Baker & Sinkula, 2005). External environmental
orientation concerns managers' perception of the need to satisfy the en-
vironmental demands of external stakeholders. This perceived need, in
turn, depends on how seriously managers assess the consequences as-
sociated with their firms' failure to meet these demands.
2.2. Integrating marketing with green supply chain management (GSCM)
Focusing on establishing a green purchasing relationship among
members within the supply chain, GSCM encompasses various eco-
logically responsible practices designed to incorporate environmental
considerations into decision making at each stage of a firm's materials
management and logistical functions through post-consumer disposal
(Zhu, Sarkis, Cordeiro, & Lai, 2008). In essence, GSCM involves integrat-
ing environmental concerns into product flows within and beyond
organizational boundaries. It is becoming an increasingly popular tool
for manufacturers to cope with environmental demands of various
stakeholders (Mollenkopf, Stolze, Tate, & Ueltschy, 2010).
Although issues relating to GSCM have been under-researched in
the field of marketing, some marketing scholars have recently con-
tended that firms' integration of environmental concerns into their
supply chain management can substantially enhance their marketing
practices and competitiveness (Closs et al., 2011). This contention
points to the inter-relationship between marketing and supply chain
management, and the potential benefits for marketers to take a cross-
functional perspective to stay competitive amidst the worldwide in-
crease in environmental consciousness.
As research on GSCM is still in its infancy (Zhu et al., 2011), activities
considered to be essential for practicing GSCM are still evolving and
thus vary across studies (e.g., Zhu & Sarkis, 2007; Zhu et al., 2008). De-
spite this, a recent investigation on manufacturing firms in China empir-
ically demonstrated the presence of three core activities for GSCM,
namely green purchase, customer cooperation and investment recovery
(Zhu et al., 2011). These three activities constitute a valuable reference
for studying GSCM in this investigation.
Green purchase concerns co-operative endeavors between the
firm and its suppliers to minimize the negative environmental impacts
of its inbound logistical activities. Typical examples of this include pro-
viding suppliers with design specifications and incorporating envi-
ronmental requirements for purchased items. Customer cooperation
concerns cooperative endeavors between the firm and its customers
to minimize the negative environmental impacts of its outbound lo-
gistical activities and offerings. This cooperation typically includes
collaboration with customers to achieve more eco-friendly design,
production and packaging for parts or final products. Investment re-
covery concerns the firm's strategic use of recycling, redeployment
and reselling to derive greater value from its materials and products.
623
It is aimed at turning surplus assets into revenues by selling idle as-
sets, reducing storage space and redeploying idle assets for other
more productive utilization. In short, investment recovery is integral
for operations concerning the reuse of products and materials, i.e.,
reverse logistics (Zhu et al., 2011).
2.3. Influence of environmental orientation on GSCM
From the resource-based perspective, a firm's strategic orientation
(e.g., environmental orientation) can be conceptualized as its valu-
able intangible resource that guides strategic practices, and conse-
quently enhances performance (Ge & Ding, 2005; Grant, 1991).
Empirically, prior marketing and business researchers also found
evidence to support this orientation → strategy proposition. For in-
stance, Murray, Gao, and Kotabe (2011) demonstrated that export
ventures in China with higher levels of marketing orientation are more
apt to undertake strategic activities in areas of pricing, new product de-
velopment and marketing communication. Likewise, Chan (2010) also
showed that both internal and external environmental orientations
serve as important determinants for firms' practices of environmental
strategies at the strategic level and within the marketing functional
area. In short, the above discussion provides both theoretical and em-
pirical support for the positive influence of these two types of environ-
mental orientation on corporate environmental practices such as GSCM.
Despite the plausibility for both internal and external environmental
orientations to positively influence GSCM, the fact that these two orien-
tations originate from two different sources (i.e., internal vs. external)
suggests that their respective influence on GSCM may be derived from
different pathways. This issue is further discussed below.
Regarding internal environmental orientation, organizational
learning theory suggests that its influence on GSCM is largely attributed
to intra-organizational learning and knowledge sharing among firm
members. From this perspective, internal environmental orientation
can be conceived as part of the core corporate values and beliefs of a
firm. It is often initiated by corporate leaders out of their own pro-
environmental ideology. Owing to the exhortations of these leaders,
this personal ideology will eventually be fused throughout the entire
firm (Egri & Herman, 2000; Sharma, 2000). In short, the above analysis
suggests that internal environmental orientation will help firm mem-
bers develop a collective consciousness of the importance of ecologi-
cally responsible operations, and eventually motivate them to seek
ways to minimize environmental impacts of these operations
(Banerjee et al., 2003).
As regards external environmental orientation, its influence can
be best explained by institutional theory. According to this theory,
firms need to tackle different constraints imposed by various impor-
tant institutions (North, 1990). If firms operate within the constraints
permitted by these institutions, they will enhance their stability and
legitimacy, and ultimately the likelihood of survival (DiMaggio &
Powell, 1983). In environmental management research, these institu-
tions can further be construed as salient external stakeholders that
impose formal (e.g., regulations) or informal (e.g., norms) rules on
how firms should manage their relationship with the natural envi-
ronment (Banerjee, 2001). From this perspective, it is likely that
managers who perceive a strong need to respond to environmental
demands of salient stakeholders will be more inclined to engage in
pro-environmental practices (e.g., GSCM) to cope with these demands.
As this managerial perception, in turn, falls into the definition of
Banerjee's (2001) external environmental orientation, it is thus proba-
ble that this orientation exerts a positive impact on GSCM. Taken to-
gether, the above discussion suggests the following hypotheses:
H1. Internal environmental orientation positively affects the practice
of GSCM activities of green purchase (H1a), customer cooperation
(H1b) and investment recovery (H1c).
624 R.Y.K. Chan et al. / Industrial Marketing Management 41 (2012) 621–630
H2. External environmental orientation positively affects the practice
of GSCM activities of green purchase (H2a), customer cooperation
(H2b) and investment recovery (H2c).
2.4. Influence of GSCM on corporate performance
In order to cope with various operating constraints derived from
heightening governmental and societal concerns over environmental
degradation, Hart (1995) introduced the seminal natural resource-
based view of the firm (NRBV) to suggest that firms should incorporate
environmental considerations into their strategic planning. He further
postulated that such incorporation will enhance the ability of firms to
cope with uncertainties at the business–environment interface, and con-
sequently lead to higher corporate performance. This postulation also
found support from several subsequent investigations conducted in de-
veloped (e.g., Judge & Douglas, 1998; Sharma & Vredenburg, 1998) and
developing nations (Chan, 2005, 2010). In general, scholars in favor of
the NRBV believed that this higher performance is attributed to firms'
reduced legal risks associated with environmental violation (Bansal &
Roth, 2000), improved corporate reputation and the resultant enhanced
ability to serve environmentally conscious customers (Chan, 2005), and
other cost and marketing advantages associated with continuous inno-
vations (Porter & van der Linde, 1995).
Despite the empirical support derived from several NRBV investiga-
tions, the relationship between pro-environmental strategic practices
and corporate performance is far from unequivocal. For instance, some
researchers were doubtful that the huge investment involved in these
practices may indeed dampen profitability (Walley & Whitehead,
1994). Still others subscribing to the notion of ‘low hanging fruit’ also
suspected that firms may find it increasingly difficult to realize cost
savings from these practices once the more obvious inefficiencies
have been rectified (Hart & Ahuja, 1996).
Relating specifically to the field of supply chain management,
some scholars also argued that GSCM will bring about superior longer
term performance through improved management of environmental
risks and the development of capabilities for continuous environmental
improvement (Alvarez, Jimenez, & Lorente, 2001). However, others con-
tended that owing to the huge investment involved, GSCM is unlikely
to contribute to short-term profitability or sales performance (Bowen,
Cousins, Lamming, & Faruk, 2001). More recently, Zhu and Sarkis
(2004), by means of a survey on Chinese manufacturing firms, demon-
strated that GSCM activities are able to boost corporate performance.
On the balance of the foregoing literature and empirical results, the fol-
lowing hypothesis is offered for further verification in this study:
H3. The practice of GSCM activities of green purchase (H3a), customer
cooperation (H3b) and investment recovery (H3c) positively affect
corporate performance.
2.5. Moderating role of competitive intensity
Competitive intensity is defined as a situation where competition
is fierce due to the presence of numerous competitors and the lack of
opportunities for further growth (Auh & Menguc, 2005). It has long
been regarded as a major contributor to hostility of the operating en-
vironment (Zahra & Covin, 1995). From this perspective, marketing
scholars have contended that under a situation of low competition,
a firm may not suffer significant deterioration in performance even
if it does not pay enough attention to customer requirements. This
is because customers have to stick to the firm's offerings anyway
due to the lack of alternatives (Cadogan, Cui, & Li, 2003). Conversely,
as customers in a highly competitive market are much freer to change
their suppliers, a firm that better satisfies customer requirements
than its rivals in this market is likely to significantly boost its perfor-
mance (e.g., in terms of increased sales). This implies that when com-
pared with those operating in a less competitive market, firms
operating in a more competitive market are likely to enjoy higher
performance if they can cope with customer requirements effectively.
Consistent with the foregoing line of reasoning, Murray et al. (2011)
have recently contended that as firms need to be more market-
responsive to counter rivals' aggressive actions in a highly competitive
market, those employing market-oriented strategies to satisfy customer
needs in such a setting are expected to enjoy even better performance
than firms doing the same when facing less competition. This view fur-
ther echoes the extant innovation literature that argues for the more
salient competitive benefits which firms facing higher competition
can derive by creating additional values for their customers (He & Nie,
2008; Langerak, 2003). Taken together, the above discussion points to
the positive moderating effect of competitive intensity on the relation-
ship between the practice of customer-oriented strategies and firm
performance.
In the era of rising global environmental concerns, customers today
are increasingly demanding for ecologically responsible production and
products from their sellers (Banerjee et al., 2003). Hence, if a firm can
closely cooperate with its customers to come up with ways to minimize
the negative environmental impacts of its operations and/or products,
the positive performance implications derived from this customer co-
operation should be even more salient under a situation of high rather
than low competition. On this basis, a hypothesis concerning the posi-
tive moderating effect of competitive intensity on the relationship
between customer cooperation and firm performance is thus proposed:
H4. Competitive intensity strengthens the positive effect of customer
cooperation on corporate performance.
While this study hypothesizes a positive moderating effect of
competitive intensity on the customer cooperation–performance re-
lationship, it does not hypothesize any moderating effect of competitive
intensity on the relationship between the other two GSCM activities
and performance (i.e., green purchase–performance, and investment
recovery–performance). This is attributed to the premise that competi-
tive intensity is a contextual factor heavily dependent on market condi-
tions. As such, it should be more relevant to how a firm deals with its
customers rather than its suppliers (as in the case of green purchase)
or internal cost control (as in the case of inventory recovery). For this
reason, this study thus only hypothesizes a moderating effect of com-
petitive intensity on customer cooperation–performance relationship.
3. Methodology
3.1. Data collection
All the hypotheses depicted in Fig. 1 were empirically tested through
the use of mail survey data collected from FIEs in China. While China is
currently the world's largest and fastest-growing emerging economy, it
has paid a high ecological price, equivalent to 8% of its annual gross do-
mestic product (Bergsten, Gill, Lardy, & Mitchell, 2006). The country
hosts 16 of the world's 20 most polluted cities, and is the world's largest
and second-largest producer of ozone-depleting substances and green-
house gas emissions, respectively (Chan, 2010). The continued environ-
mental deterioration and the resultant heightened regulatory control
and public scrutiny, as mentioned, have posed new operating chal-
lenges to firms conducting business in China. These challenges make
the country an ideal setting to conduct the present study.
The reasons for focusing on FIEs in this investigation are two-fold.
First, FIEs are seen as playing an increasingly important role in China's
economic development (Chan, 2005). With 55% of its exports being
manufactured by FIEs, China is the second largest (only behind the US)
host for foreign direct investments among all nations (Hong Kong
Trade Development Council, 2011; The World Bank, 2011). The increas-
ing significance of FIEs in the Chinese economy justifies an investigation
specifically on the operations of this venture group. Being a ‘world
 R.Y.K. Chan et al. / Industrial Marketing Management 41 (2012) 621–630 625

factory’ (Zheng & Wang, 2006), China has enjoyed a tremendous growth green purchase, customer cooperation and investment recovery. As
in foreign direct investments throughout the past few decades (Chan, a matter of fact, these researchers provided some empirical evidence
2010). While the flourishing of foreign invested enterprises (FIEs) in in the same study to support the appropriateness of using these items
China has contributed to the country's phenomenal economic growth, to examine manufacturing firms in China. The items were coded on a
it has caused severe ecological problems there. These problems have, seven-point scale ranging from 1 = ‘no plan to implement’ to 7 =
in turn, triggered serious concerns from Chinese policy makers and the ‘full implementation’.
public at large, and consequently led to tightening environmental regu-
lations and increasing public scrutiny over FIEs' host operations. In
response to these emerging operating challenges, more and more FIEs 3.2.3. Corporate performance
in China have started taking various environmental initiatives to pursue Subjective measures of firm performance were employed in this
sustainable growth (Chan, 2005). Of these practices, green supply chain study. Previous research indicates that subjective measures of perfor-
management (GSCM) is increasingly employed by manufacturers in mance relative to competitors are highly correlated with objective
China to manage the business–environment relationship (Zhu et al., ones (Dawes, 1999). The use of these perceived measures is also
2005). Second, having been regarded both as major contributors of in- well established in the literature environmental management (e.g.,
dustrial pollution and as being more resourceful in meeting environ-
mental requirements, FIEs in China often face more stringent legislative Table 1
control and greater regulatory burdens than their indigenous Chinese Results of confirmatory factor analysis.
counterparts (Child & Tsai, 2005). Consequently, FIEs are under even
Constructs and measures Standardized
greater pressure to pursue sustainable growth. The more austere operat- factor loading
ing setting warrants a thorough investigation specifically on understand-
Internal environmental orientation (IEO) (α = 0.83; AVE = 0.55)
ing the corresponding strategic responses of this venture group. 1. Our firm makes concerted efforts to let every employee 0.79a
With the help of a domestic research agency, a sampling frame understand the importance of environmental preservation.
was first developed mainly based on the China Foreign Enterprise 2. Our firm has clear policy statements urging environmental 0.70⁎
Directory, 2010 (SinoMedia, 2010). Service enterprises were exclud- awareness in every area of operations.
3. Environmental preservation is highly valued by our firm 0.78⁎
ed from the study as they differ from other industrial enterprises in
members.
terms of investment rationale, institutional treatment, and performance 4. Environmental preservation is a central corporate value of 0.68⁎
measurements (Luo, Shenkar, & Nyaw, 2001). A total of 600 FIEs located our firm.
in major coastal regions (Guangdong, Jiangsu, Fujian, Shanghai, and External environmental orientation (EEO) (α = 0.90; AVE = 0.70)
Shandong) and in the capital city of China (Beijing) were randomly 1. The developments in the natural environment affect our 0.72⁎
firm's business activities.
selected. This geographical choice allowed coverage of China's most 2. The financial well-being of our firm depends on the state of 0.87⁎
developed and industrialized areas, which are the subject of the closest the natural environment.
scrutiny from Chinese environmental agencies (Chan, 2005). 3. Environmental preservation is vital to our firm's survival. 0.90⁎
As top management usually plays a vital role in the design of envi- 4. Various external stakeholders expect our firm to preserve 0.84⁎
the environment.
ronmental policy (Chan, 2010), questionnaires were mailed to the
GSCM — Green Purchase (GP) (α = 0.81; AVE = 0.59)
chief executive officer of the selected FIEs. To avoid anomalies in the 1. Providing design specification to supplies that include 0.86a
collected data due to sudden strategic changes, the survey question- environmental requirements for purchased items
naire incorporated a screening question to filter out those FIEs that 2. Cooperation with suppliers for environmental objectives 0.83⁎
had altered their major competitive methods within the past three 3. Suppliers are selected using environmental criteria 0.59⁎
GSCM — Customer Cooperation (CC) (α = 0.88; AVE = 0.65)
years (Chan, 2005). To encourage participation, all target respondents 1. Cooperation with customers for eco-design 0.80a
were assured anonymity and offered an executive summary of the 2. Cooperation with customers for cleaner production 0.80⁎
study upon its completion. 3. Cooperation with customers for green packaging 0.82⁎
4. Cooperation with customers for using less energy during 0.81⁎
product transportation
3.2. Measures
GSCM — Investment Recovery (IR) (α = 0.77; AVE = 0.53)
1. Investment recovery (sale) of excess inventories/materials 0.67a
Measures of the survey were initially developed based on input 2. Sale of scrap and used materials 0.80⁎
from a thorough literature review. Drafted measuring instruments 3. Establishing a recycling system for used and defective products 0.71⁎
were then assessed by three academics knowledgeable about the Corporate Performance (CP) (α = 0.91; AVE = 0.71)
1. After tax returns on investment 0.85a
topic under investigation. The assessed instruments were further 2. Earnings growth 0.88⁎
pre-tested with 30 senior executives working for FIEs in China. All ex- 3. Sales growth 0.74⁎
ecutives who participated in this instrument development process 4. Market share change 0.88⁎
were excluded from the subsequent mail survey. English was initially Competitive Intensity (CI) (α = 0.91; AVE = 0.66)
1. Competition in our market is cut-throat. 0.83a
used to develop the survey questionnaire, which was subsequently
2. There are many “promotion wars” in our market 0.80⁎
translated into Chinese. The linguistic equivalence between the two 3. Anything that one competitor can offer in our market, others 0.82⁎
versions was ensured by employing the back-translation technique. can match readily.
The finalized measures are summarized in Table 1 and are further de- 4. Price competition is a hallmark of our export market. 0.79⁎
scribed below. 5. One hears of a new competitive move in our market 0.83⁎
frequently.
Social Desirability Bias (SDB) (α = 0.95; AVE = 0.78)
3.2.1. Internal and external environmental orientations 1. I am always courteous even to people who are disagreeable.R 0.74a
Four items each for internal environmental orientation and external 2. There have been occasions when I took advantage of someone. 0.93⁎
environmental orientation were adapted from Banerjee's (2002) rele- 3. I sometimes try to get even rather than forgive and forget. 0.91⁎
4. I sometimes feel resentful when I don't get my way. 0.92⁎
vant scales. The items were coded on a seven-point scale ranging from
5. No matter who I am talking to, I am always a good listener.R 0.90⁎
1 = ‘strongly disagree’ to 7 = ‘strongly agree’. Fit statistics of the overall measurement model:
χ2 (443) = 575.24, p = 0.00; TLI = 0.98; CFI = 0.98; RMSEA = 0.04
3.2.2. Green supply chain management (GSMC) activities Notes: α = composite reliability; R = reverse-coded item.
As mentioned, this investigation adapted Zhu et al.'s (2011) pro- ⁎ p b 0.05.
posed items to capture the three major GSMC activities, namely a
Initially fixed at 1.0 for estimation.
626 R.Y.K. Chan et al. / Industrial Marketing Management 41 (2012) 621–630

Banerjee, 2002; Banerjee et al., 2003). With reference to previous en-
vironmental research (e.g. Judge & Douglas, 1998; Menguc & Ozanne,
2005), four items, namely after-tax returns on investment, earnings
growth, sales growth, and market share change, were used to operatio-
nalize responding firms' financial and market performance. Respon-
dents were asked to rate, on a seven point scale (1 = ‘much worse’ to
7 = ‘much better’), the performance of their enterprises relative to
their competitors on each of these items.
3.2.4. Competitive intensity
Six items were adapted from Jaworski and Kohli's (1993) relevant
instrument. The same instrument was also employed by other subse-
quent marketing (Murray et al., 2011) and business researchers (Auh
& Menguc, 2005) to study the moderating role of competitive intensi-
ty. The items were coded on a seven-point scale ranging from 1 =
‘strongly disagree’ to 7 = ‘strongly agree’.
3.2.5. Controls
Since firms' environmental practices may be affected by their size
(Sharma, 2000), operating experience (Chan, 2005) and the industry
in which they operate (Banerjee et al., 2003), this study incorporated
the relevant control variables accordingly. Specifically, it controlled
for the effect of size and operating experience by the natural loga-
rithm of a firm's number of employees, and its number of years en-
gaged in operations in China, respectively. Moreover, this study
followed Chan's (2010) approach by computing a pollution index
for each of the major Chinese industries to control for the industry ef-
fect. Specifically, three percentages representing the respective shares
of waste water, waste gas and solid wastes produced by each industry
were first compiled. The pollution index of each industry was then
derived by multiplying the average of these three percentages by
100. Lastly, the study also incorporated Hays, Hayashi, and Stewart's
(1989) five-item social desirability bias instrument to aid post-hoc as-
sessment of this bias and the common method variance bias (see below).
These items were coded on a seven-point scale (1 = ‘definitely true’ to
7 = ‘definitely false’) with higher scores denoting a stronger bias.
4. Results
4.1. Sample profile
After a series of formal and informal follow-ups, a total of 194
valid replies were received. This constituted a response rate of 32%
(194/600) and is comparable to previous survey of enterprises in
China (Murray et al., 2011). On average, the responding FIEs had
1256 employees and 13.45 years of operating experience in China. A
total of 116 (60%) responding FIEs operated in light industries (e.g.
food processing, manufacture of textile and apparels, manufacture of
leather, fur and feather) and 78 (40%) in heavy industries (e.g. manufac-
ture of raw chemical materials and chemical products, manufacture of
machinery, manufacture of electrical machinery and equipment).
To check for non-response bias, Armstrong and Overton (1977)
approach was followed. Specifically, a comparison was made between
the early (first 25% replies) and late respondents (last 25% replies) to
see if they differed in their questionnaire responses. The t-test results
indicated no significant difference at p ≤ 0.05, thus ruling out the pos-
sibility of significant non-response bias.
4.2. Validation of measures
To validate the measures employed in this study, confirmatory
factor analysis (CFA) was performed using EQS. Overall, the CFA
results summarized in Table 1 revealed a satisfactory fit for the over-
all measurement models (χ 2(443) = 575.24, p = 0.00; Tucker–Lewis
index (TLI) = 0.98; comparative fit index (CFI) = 0.98; and root
mean square error of approximation (RMSEA) = 0.04). Moreover, all
the constructs demonstrated satisfactory reliability by having com-
posite reliabilities above 0.70. The results also indicated that all the
factor loadings were significant as hypothesized at p b 0.05 and all
the average variances extracted (AVEs) exceeded 0.50, thus suggesting
convergent validity of the constructs (Hair, Black, Babin, & Anderson,
2009). To test discriminant validity of these contracts, the squared cor-
relation of each pair of constructs was further compared with their re-
spective AVE (Fornell & Larcker, 1981). The comparison showed that
all the squared correlations (0.00–0.46) were less than the respective
AVEs (0.55–0.78), thus demonstrating adequate discriminant validity
of the constructs.
4.3. Assessing social desirability bias and common method variance bias
After establishing validity for the measures, the relevant compos-
ite scores to represent the constructs were thus computed for subse-
quent analysis. Table 2 further summarizes the major descriptive
statistics and correlations derived from the sample. Relating specifi-
cally to the potential social desirability bias (SDB), the results show
that the SDB construct was not significantly correlated with any
focal constructs at p b 0.05. The results suggested the lack of this bias.
Lindell and Whitney's (2001) marker-variable technique was fur-
ther employed to assess the potential common method variance bias.
Specifically, SDB, a construct theoretically unrelated to all the focal
constructs or other control variables, was first selected as the
marker-variable to compute the partial correlations. These partial
correlations were then compared with the corresponding original
correlations (those shown in Table 2). To summarize, this compari-
son revealed that the statistical significance of all the correlations

Table 2
Descriptive statistics and correlations.

1 2 3 4 5 6 7 8 9 10 11

1. Internal environmental orientation 1

2. External environmental orientation 0.41 1
3. Green purchase 0.52 0.52 1
4. Customer cooperation 0.54 0.54 0.64 1
5. Investment recovery 0.62 0.62 0.27 0.28 1
6. Corporate performance 0.53 0.53 0.62 0.68 0.38 1
7. Competitive intensity 0.36 0.36 0.49 0.39 0.12 0.40 1
8. Social desirability bias 0.05 0.05 0.05 0.05 − 0.07 − 0.01 0.09 1
9. Employee size 0.14 0.14 0.13 0.07 0.12 0.09 0.26 0.23 1
10. Operating experience − 0.03 − 0.03 0.21 0.29 − 0.07 0.25 0.06 − 0.08 0.08 1
11. Industry type 0.12 0.12 − 0.20 − 0.24 0.17 − 0.19 − 0.10 0.05 0.36 − 0.44 1
Mean 5.41 5.40 5.67 5.44 4.86 5.06 5.26 3.19 7.14 13.45 3.50
Standard deviation 1.02 1.06 1.00 1.12 1.03 1.05 0.93 1.09 1.17 3.63 4.57

Notes: Absolute correlation values equal to or greater than 0.21 were significant at p b 0.01.
Absolute correlation values greater than 0.15 but small than 0.21 were significant at p b 0.05.
 R.Y.K. Chan et al. / Industrial Marketing Management 41 (2012) 621–630 627

remained unchanged, thus indicating the absence of serious com-
mon method variance bias.
4.4. Hypothesis testing
This study followed prior environmental management research
(e.g., Banerjee et al., 2003) by employing path analysis to test the
structural relationships (H1 to H3) depicted in Fig. 1. The analysis
was performed using EQS. The direct effect of the four control
variables on all the endogenous variables was also incorporated into
the relevant structural model for analysis. Overall, the results summa-
rized in Table 3 demonstrated a satisfactory fit for the proposed struc-
tural model: χ2(5) = 8.05, p = 0.15; TLI = 0.94; CFI = 0.99; and
RMSEA=0.07 (Browne & Cudeck, 1993; Hair et al., 2009). The Table
also showed several important findings for the tests of individual hypoth-
eses. First, in support of H1a to c, the standardized path estimates indicat-
ed that, among the studied FIEs, internal environmental orientation was
found to exert a significant and positive influence on the GSCM activities
of green purchase (β=0.47) and customer cooperation (β=0.44) and
investment recovery (β=0.59) at pb 0.05. On the other hand, external
environmental orientation was found to exert a significant and positive
influence on green purchase (β=0.25) and customer cooperation
(β=0.40), but not on investment recovery (β=0.06). The findings
thus supported H2a and b but not H2c. In support of H3a to c, the results
also indicated that green purchase (GP), customer cooperation (CC) and
investment recovery (IR) all served as significant drivers for corporate
performance (βGP =0.30; βCC =0.43; βIR =0.21) at pb 0.05.
Relating specifically to the test of the hypothesized moderating
effects of competitive intensity (H4a to c), Ping's (1995) proposed es-
timation technique was employed. This technique allows both direct
and interaction influences of various latent variables to be simulta-
neously examined within the context of structural equation modeling.
To illustrate, if M (with indicators m1 to mi), A (with indicators a1 to
aj), and B are latent variables with M being hypothesized as moderating
the A → B relationship, the relevant latent interaction variable, A × M can
be specified by a single indicator with scores equal to [(a1 + a2 + ....+ aj)
(m1 + m2 + .... + mi)]. Table 4 summarized the results after incorporat-
ing the hypothesized moderating effect into analysis using Ping's
approach.
To summarize, the results shown in Table 4 demonstrated a satis-
factory fit for the proposed structural model: χ 2(8) = 9.69, p = 0.29;
TLI = 0.97; CFI = 0.99; and RMSEA = 0.04. As for the test of H1a to
H3c (i.e., direct effect of exogenous variables), the standardized
path estimates derived from this Table also revealed similar results
as those depicted in Table 3 earlier. As for the test of H4 (i.e., moder-
ating effect of competitive intensity), the relevant interaction term,
namely customer cooperation × competitive intensity (CC × CI), was
found to be significant at p b 0.05 (βCC × CI = 0.15). This suggested
that competition intensity further strengthened the positive influence
of customer cooperation on corporate performance. To verify if competi-
tive intensity really exerted no significant moderating effect on the green
purchase–performance, and investment recovery–performance rela-
tionships, supplementary path analysis with the inclusion of the inter-
action terms of GP × CI and IR × CI was also performed. To summarize,
this analysis showed that the two interaction terms were both insignif-
icant (βGP × CI = −0.12; βIR × CI = 0.02) at p b 0.05, thus confirming the
belief that the effectiveness (as reflected in performance) of green pur-
chase and investment recovery were not contingent upon competitive
Table 4
Hypothesis testing results by path analysis (direct and moderating effects).

Table 3 Structural path Standardized

Hypothesis testing results by path analysis (direct effects). path estimate

Direct effect of exogenous variables

Structural path Standardized
H1a Internal environmental orientation→Green purchase 0.47⁎ (supported)
path estimate
H1b Internal environmental orientation → Customer 0.41⁎ (supported)
Direct effect of exogenous variables cooperation
H1a Internal environmental orientation→Green purchase 0.47⁎ (supported) H1c Internal environmental orientation → Investment 0.59⁎ (supported)
H1b Internal environmental orientation→Customer 0.44⁎ (supported) recovery
cooperation H2a External environmental orientation→Green purchase 0.24⁎ (supported)
H1c Internal environmental orientation → Investment 0.59⁎ (supported) H2b External environmental orientation → Customer 0.41⁎ (supported)
recovery cooperation
H2a External environmental orientation→Green purchase 0.25⁎ (supported) H2c External environmental orientation→Investment 0.06 (not supported)
H2b External environmental orientation → Customer 0.40⁎ (supported) recovery
cooperation H3a Green purchase → Corporate performance 0.34⁎ (supported)
H2c External environmental orientation → Investment 0.06 (not H3b Customer cooperation → Corporate performance 0.40⁎ (supported)
recovery supported) H3c Investment recovery → Corporate performance 0.24⁎ (supported)
H3a Green purchase → Corporate performance 0.30⁎ (supported)
H3b Customer cooperation → Corporate performance 0.43⁎ (supported) Moderating effect of competitive intensity
H3c Investment recovery → Corporate performance 0.21⁎ (supported) H4 Customer cooperation × competitive intensity 0.15⁎ (supported)

Direct effect of control variables: Direct effect of control variables:

Social desirability bias → Green purchase − 0.02 Social desirability bias → Green purchase − 0.02
Employee size → Green purchase 0.17⁎ Employee size → Green purchase 0.17⁎
Operating experience → Green purchase 0.02 Operating experience → Green purchase 0.03
Industry type → Green purchase − 0.14 Industry type → Green purchase − 0.14
Social desirability bias → Customer cooperation 0.02 Social desirability bias → Customer cooperation 0.01
Employee size → Customer cooperation 0.05 Employee size → Customer cooperation 0.06
Operating experience → Customer cooperation 0.08 Operating experience → Customer cooperation 0.08
Industry type → Customer cooperation − 0.10 Industry type → Customer cooperation −0.09
Social desirability bias → Investment recovery − 0.10 Social desirability bias → Investment recovery − 0.08
Employee size → Investment recovery 0.02 Employee size → Investment recovery 0.02
Operating experience → Investment recovery − 0.03 Operating experience → Investment recovery − 0.02
Industry type → Investment recovery 0.05 Industry type → Investment recovery 0.04
Social desirability bias → Corporate performance − 0.03 Social desirability bias → Corporate performance − 0.06
Employee size → Corporate performance 0.02 Employee size → Corporate performance 0.05
Operating experience → Corporate performance 0.12 Operating experience → Corporate performance 0.09
Industry type → Corporate performance 0.01 Industry type → Corporate performance 0.03
Overall model fit Overall model fit
χ2 (5) = 8.05 (p = 0.15); TLI = 0.94; CFI = 0.99; RMSEA = 0.07 χ2 (8) =9.69 (p=0.29); TLI=0.97; CFI=0.99; RMSEA=0.04
% of variance of corporate performance explained = 60% % of variance of corporate performance explained = 63%
⁎ p b 0.05. ⁎ p b 0.05.
628 R.Y.K. Chan et al. / Industrial Marketing Management 41 (2012) 621–630
intensity. Implications of these specific findings as well as others are
further discussed below.
5. Discussion and conclusion
5.1. Theoretical implications
Based on responses from 194 FIEs operating in China, this study
has generated several important findings. First, GSCM mediates the
effect of environmental orientation on corporate performance. Second,
the GSCM activity of customer cooperation exerts a stronger impact
on corporate performance as competitive intensity increases; whereas
the impact of other GSCM activities (i.e. green purchase and investment
recovery) on corporate performance remains similar across different
levels of competitive intensity. Third, the aforementioned moderating
effect of competitive intensity further suggests that environmental ori-
entation will have a stronger indirect impact on corporate performance
(through customer cooperation) under higher levels of competitive in-
tensity. These findings contribute to the literature on the performance
implications of environmental orientation as well as that on GSCM.
More detailed discussion of these various implications is given below.
5.1.1. Environmental orientation and firm performance
First, this study contributes to the recent debate on the performance
implications of environmental orientation. It has been widely debated
among academics and practitioners whether and how firms' adoption
of an environmental orientation would enhance their competitiveness.
Unfortunately, the literature on this area to date is still rather mixed and
far from adequate (Menguc & Ozanne, 2005). This study not only dem-
onstrates that both internal and external environmental orientations
exert a positive and significant influence on corporate performance,
but also more importantly, delineates how GSCM practices (i.e., green
purchase, customer cooperation and investment recovery) mediate
this influence. Overall, these results empirically support the general
tenet of the NRBV, namely it pays off for firms to both think and act
‘green’. Given the strong relevance of supply chain activities to marketing
practices (e.g., product and package design, marketing communication
and channel selection) (Closs et al., 2011), the reported mediating effect
further reminds business, and in particular, marketing researchers of the
benefits to employ a cross-disciplinary approach to examining how
adopting an environmental orientation can help firms achieve superior
performance in the marketplace.
Second, it is also important to note that the exact impacts of internal
and external environmental orientations on corporate performance are
realized in slightly different ways. Specifically, this research reveals that
internal environmental orientation exerts a more consistent indirect
effect on corporate performance through all the three major GSCM ac-
tivities; whereas external environmental orientation impacts corporate
performance only through green purchase and customer cooperation,
but not through investment recovery. The insignificant effect of exter-
nal environmental orientation on investment recovery is not surprising
as this particular GSCM activity mainly concerns firm activities that are
more internally focused in nature. Moreover, given that internal envi-
ronmental orientation mainly concerns those deep-rooted environ-
mental values widely shared among firm members (Banerjee, 2001),
it should be more ‘embedded’ and thus exhibits more comprehensive
impacts on corporate environmental activities than the pragmatically-
driven (e.g., competitiveness enhancement, survival) external environ-
mental orientation. In short, despite the difference in their respective in-
fluences, both internal and external environmental orientations have
positive implications for corporate performance. The identified influ-
ences of internal and external environmental orientations on various
GSCM activities further corroborate Bansal and Roth's (2000) observa-
tion that firms are characterized by mixed motivations (e.g., internal en-
vironmental ethics, external legislative or competitive considerations)
for taking environmental initiatives.
5.1.2. GSCM literature
This research contributes to the literature on GSCM as well. GSCM
has received increasing academic attention in recent years. GSCM has
been seen as a major corporate initiative that not only represents a
more accurate testimony of whether a firm is genuinely devoted to
ecologically responsible operations (or just ‘green-washing’ projects),
but also has strong strategic implications to its long-term sustainable
growth. Overall, this research contributes to this stream of literature
in the following two ways.
First, this study enriches this stream of literature by offering
strong additional evidence, with a unique sample of firms (FIEs in
China), to the positive effect of GSCM (for all the three major activities)
on corporate performance. Second, this study unveils an important
antecedent of GSCM. Most prior research on GSCM has focused on
issues, such as advocating the importance of GSCM, identifying the con-
stituent components of GSCM and the performance impacts of GSCM
(Srivastava, 2007), and delineating the diffusion of GSCM practices
(Sarkis, Zhu, & Lai, 2011). Relatively little research has examined
the firm-level (especially senior managers' value-based orientation)
antecedents of GSCM. This research fills this gap by empirically demon-
strating that both internal and external environmental orientations
constitute important precursors for firms to adopt GSCM practices. As
noted earlier, this study advances understanding of the respective
(and slightly different) influences of these two orientations on major
GSCM activities. In addition, the impact of environmental orientation
on GSCM implies the cascading effect of senior managers' ecological
ideologies and perceived pressures from salient external environmental
stakeholders on the management of such functional areas as supply
chain management within a ‘green’ context. While prior environmental
management research (largely conducted in Western developed na-
tions) has largely been confined to the performance implications of
managerial practices at the corporate level (e.g., Judge & Douglas,
1998; Sharma & Vredenburg, 1998), this study specifically demon-
strates this cascading effect in supply chain management within the
context of an Asian emerging economy.
5.1.3. The role of market competitive conditions
This research's finding of the moderating effect of market compet-
itive intensity is of significant implications for a number of bodies of
literature. Specifically, the present path analysis reveals that compet-
itive intensity further augments the positive influence of customer
cooperation on corporate performance. This result demonstrates
how the effectiveness (as reflected in corporate performance) of cus-
tomer cooperation is contingent upon the competitive condition of
the marketplace. As it is believed that satisfying customers is of
much higher relevance to outperforming rivals in a highly competitive
market, this study, as mentioned, only hypothesizes a moderating effect
of competitive intensity on the customer cooperation–performance re-
lationship but not on the green purchase–performance or investment
recovery–performance relationship. Empirically, this belief has also
been confirmed by supplementary path analysis that incorporates
both the interaction terms of GP× CI and IR × CI into examination.
As a proxy of hostility of the operating setting, competitive inten-
sity has long been regarded as an important contextual factor that
moderates the firm's internal process underlying the transformation
of market orientation into superior corporate performance (Murray
et al., 2011). The present findings thus extend this body of marketing
research by demonstrating that competitive intensity also moderates
the performance implications of a customer-oriented strategy, namely
customer cooperation. This clearly underscores the strategic impor-
tance for firms to cooperate with their customers closely as competition
increases. From another perspective, the present findings shed further
light on the extant GSCM literature (mostly in the fields of logistics
and operations management) which has often omitted the potential
moderating influence of contextual conditions from their analysis.
Moreover, as prior research on environmental orientation has mainly
 R.Y.K. Chan et al. / Industrial Marketing Management 41 (2012) 621–630
focused on the direct orientation–performance (Menguc & Ozanne,
2005), the incorporation of the moderating variable of competitive in-
tensity as well as the mediator of GSCM activities into this study thus
renders valuable insights into the boundary condition and mechanism
involved the transformation of environmental orientation into
superior performance.
Besides, the present findings reveal the insignificant influence of
external environmental orientation on investment recovery. This insig-
nificance may be attributed to external stakeholders' lack of knowledge
about the amount of idle assets the focal firm possesses. As such, they
may tend to pay less attention to the firm's involvement in investment
recovery. This probably explains its lower perceived external pressures
to practice this particular GSCM activity. Despite its plausibility, this
proposed explanation warrants further exploration in future research.
5.2. Managerial implications
In practical terms, this study reminds managers of the importance
to nurture a pro-environmental corporate culture as well as to im-
prove their sensitivity to salient external stakeholders' environmental
demands for achieving greener supply chain management practices.
Corporate senior executives should realize the highly essential role
internal environmental orientation plays in further fine-tuning their
GSCM practices. Given the strong normative influence of top manage-
ment within the firm, they are thus advised to play a key role in facilitat-
ing the infusion of this orientation. For instance, they can be involved in
such environmental management initiatives as providing all firm mem-
bers with appropriate environmental training, establishing formal and
informal channels to encourage inter- and intra-functional communica-
tion of environmental practices and goals, considering the environmen-
tal contribution when designing reward systems, and assigning a senior
executive to oversee the formulation and implementation of the firm's
environmental policies (Fernandez, Junquera, & Ordiz, 2003). The so-
cialization and education involved in these activities would help em-
ployees to internalize the environmental ethics advocated by corporate
leaders, and to visualize top management's commitment to sustainable
corporate growth (Banerjee et al., 2003).
This research reveals that competitive intensity further strengthens
the positive influence of customer cooperation on corporate perfor-
mance. This finding suggests that if a firm can work closely with its cus-
tomers to minimize the negative environmental impacts of its outbound
logistical activities, it will enjoy even higher performance under a high-
(rather than low-) competitive situation. In the context of business-to-
business marketing, this finding clearly underscores the strategic impor-
tance for the firm to collaborate closely with its clients to advance GSCM
practices especially in today's highly competitive marketplace.
5.3. Limitations and future research
Despite the academic and practical implications that can be derived
from this investigation, its confinement to industrial FIEs operating in
the more developed Chinese provinces may restrict the extent to which
the findings may be generalized. As such, caution must be taken to the
extension of the findings in explaining such ventures as state-owned en-
terprises, service enterprises, and FIEs that operate in the less developed
provinces. While it is justified to first explore selected venture groups
whose business operations are likely to be heavily affected by China's
rising environmental consciousness, an investigation with wider cover-
age in terms of ownership type, industry type, and geographic area will
definitely enhance the comprehensiveness of the investigation and help
further assess the external validity of the proposed model.
Moreover, future research can take additional avenues. For exam-
ple, the mediation effect of GSCM on the impact of environmental ori-
entation can be tested in other countries. Other management-based
practice mediation mechanism, such as marketing-based downward
stream management practice, should be explored. Researchers may
629
further explore the possible moderating effect of other contextual fac-
tors (e.g., market dynamism) so as to uncover other contingencies that
may affect the GSCM–performance relationship.
Acknowledgment
The work described in this paper was supported by a grant from
the Hong Kong Polytechnic University.
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Dr. Ricky Y. K. Chan is an Associate Professor in the Department of Management and
Marketing at the Hong Kong Polytechnic University. His research interests lie in con-
sumer ethics, green consumption, and antecedents and consequences of environmental
strategies. Apart from contributing to various marketing and management journals,
Dr. Chan has served on the editorial board of the Journal of Management Studies.
Dr. Hongwei He is Associate Professor of Marketing at Marketing and Strategy Group,
Warwick Business School, University of Warwick. Dr. He does GERM research: Green;
Emotional; Relational; and Moral. Dr. He has published widely in journals, such as British
Journal of Management, Journal of Business Research, Journal of Business Ethics, European
Journal of Marketing, among others.
Dr. Hing Kai Chan is a Senior Lecturer in Operations and Supply Chain Management in
the Norwich Business School, University of East Anglia. He gained his PhD (with re-
search focus on supply chain management), an MSc (with distinction) in Industrial En-
gineering and Industrial Management, and a bachelor degree in Electrical and
Electronic Engineering, all from the University of Hong Kong. He also earned a bache-
lor's degree in Economics and Management from London School of Economics and Po-
litical Science. Sustainable supply chain management is his recent research interest. His
publications appear in Supply Chain Management: An Internal Journal, International
Journal of Production Economics, and so on.
Dr. William Y. C. Wang is currently an Associate Professor at the Auckland University
of Technology, New Zealand. He has supervised research projects and provided indus-
trial consultancy in Australasia and Asian regions regarding supply chain management,
global supply chain planning, and business process reengineering. These researches
have specifically highlighted on the interdisciplinary issues related to B2B integration,
enterprise systems adoption and maintenance, and supply chain configuration for
large firms and SMEs. Those are both quantitative and qualitative. He also serves on
the editorial board/advisory board of several international journals. His papers appear
in Information Systems Journal, International Journal of Production Economics, Inter-
national Journal of Production Research, Supply Chain Management — an International
Journal, International Journal of Production Planning and Control and proceedings of
international conferences.