Green market orientation and organizational

performance in Taiwan’s electric and electronic

industry: the mediating role of green supply
chain management capability
Elaine Quintana Borazon
International Graduate Program of Education and Human Development, College of Social Sciences,
National Sun Yat-sen University, Kaohsiung, Taiwan
Yi-Chun Huang
College of Management, National Kaohsiung University of Science and Technology, Kaohsiung, Taiwan, and
Jen-Ming Liu
Department of Fisheries Production and Management, College of Hydrosphere Science,
National Kaohsiung University of Science and Technology, Kaohsiung, Taiwan

Abstract
Purpose – Green sustainability has become a critical challenge for businesses to execute green supply chain management (GSCM). Most of the
literature on GSCM emphasizes regulations as drivers and few pieces of research are conducted from an internal organizational culture view. This
study aims to use the cultural perspective of market orientation (MO) and draws on both the natural resource-based view (NRBV) and dynamic
capability view (DCV) to explore the relationships among green market orientation (GMO), GSCM capability and organizational performance.
Design/methodology/approach – A total of 1,000 survey questionnaires were distributed to the Taiwanese electronics industry and 207 valid
questionnaires were collected. Data was analyzed using structural equation modeling.
Findings – The results show that GMOs have a significant positive impact on GSCM capability, environmental performance and economic
performance. Moreover, GSCM capability is positively related to environmental and economic performance. The results also show that GMOs have a
significant indirect influence on environmental performance and economic performance through GSCM capability.
Practical implications – The findings of this study suggest how Taiwan’s electrical and electronic manufacturers, while faced with pressure from
competitors, customers and regulations (i.e. waste electrical and electronic equipment directive, Restriction of Hazardous Substances Directive and
energy-using products directives), should efficiently and effectively implement GMO and enhance GSCM capability to improve organizational
performance.
Originality/value – This study fills up the gap between MO and performance indistinct relationships. It has also integrated two perspectives,
namely, NRBV and DCV, to explain GSCM capability as a mediator between GMO and organizational performance relationship and to examine the
relationships among GMO, GSCM capability and organizational performance.
Keywords Organizational performance, Dynamic capability view (DCV), Green market orientation (GMO),
Green supply chain management (GSCM) capability, Natural resource-based view (NRBV)
Paper type Research paper

1. Introduction 2018; Yadlapalli et al., 2018). Among the leading contributors

The rapid growth in today’s global economy can be attributed
to industrialization and mass production. The costs and
benefits of large-scale manufacturing have significantly fortified
the financial pillars of various Asian countries, namely, China,
Japan, Bangladesh, India and Korea (Giffi et al., 2016;
Organization for Economic Cooperation and Development,
The current issue and full text archive of this journal is available on Emerald
Insight at: https://www.emerald.com/insight/0885-8624.htm
in development is Taiwan’s electrical and electronic industry.
In 2017, Taiwan’s electrical and electronics supply chain
system accounted for 50.44% of the country’s total industry
output, which is equivalent to US$232,267m; and the total
export value constituted 53.28%, which amounts to US
$169,101m (Taiwan’s Electrical and Electronic Manufacturers’
Association, 2017). Needless to say, it has yielded a substantial
contribution to the economy. Accompanying wide-scale
This work was supported by the Ministry of Science and Technology,
Taiwan, R.O.C. MOST-107-2410-H-992-022.

Journal of Business & Industrial Marketing

Received 8 July 2020
37/7 (2022) 1475–1496 Revised 4 February 2021
© Emerald Publishing Limited [ISSN 0885-8624] 5 July 2021
[DOI 10.1108/JBIM-07-2020-0321] Accepted 21 September 2021

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 Green market orientation
Elaine Quintana Borazon, Yi-Chun Huang and Jen-Ming Liu
productions is the anticipated increase in the consumption of
non-renewable resources (Hart, 1995), which causes adverse
impacts on the environment such as global warming, air and
water pollution and chemical and toxic discharges (Geng et al.,
2017). To reduce the negative impact of these electrical and
electronic products in the environment, the European Union
has successfully implemented the “Waste Electrical and
Electronic Equipment Directive” (WEEE), the “Restriction of
Hazardous Substances Directive” (RoHS) and the “Directive
of Ecodesign Requirements of Energy-using Products”
(EuP) to regulate these industries and their consumer
electrical and electronic products (European Union, 2012;
European Commission, 2017; European Union, 2009). This
environmental threat has urged the international community
to address environment-related issues for the benefit of the
current and future generations. Thus, governments from
around the world have verbalized and legislated strict rules on
environmental protection (New et al., 2002). These environment-
related regulations also have had a serious impact on the electrical
and electronics industry of Taiwan. The said industry has started
to plan on how to integrate the “green” aspect into their products
to attain sustainability. Hence, throughout the product life
cycle and from designing, manufacturing, usage, maintenance,
recycling and post-processing and product destruction,
environment-protection techniques should be integrated. For
example, ASUSTEK Computer Inc., a top manufacturer of
computers in Taiwan, has incorporated eco-friendly processes
(i.e. green design, green procurement, green manufacturing
and green services) (ASUSTEK Computer Inc., 2021).
Facing customer’s “green” needs and competitors doing
corporate greening, some researchers (Daddi et al., 2021; Lin
et al., 2020a) suggest green market orientation (GMO) may
play a critical role. GMO involves environmentally friendly
processes and activities in which firms adjust their organizational
activities, green objectives and organizational culture to increase
customer satisfaction and competitive advantage.
With current issues on ecological imbalance and depleting
natural resources, contemporary marketing strategies suggest
that businesses align their operations with the GMO (Habib
et al., 2020; Li et al., 2018b; Mitchell et al., 2010). Adoption of
GMO is critical in “corporate greening” and promotion of
environment-related services or products that are of value for
the customers (Chen et al., 2015). GMO makes businesses
more conscious of the environmental repercussions of their
practices, particularly in their supply chain (Meixell Mary and
Luoma, 2015). Thus, GMOs could aid firms in developing
unique capabilities to attain environmental management goals
(Li et al., 2018b). GMO serves as an extension of the idea of
market orientation, which refers to the philosophy of an
organization to discern and meet their customers’ needs and
wants through their product and service offerings (Lin et al.,
2020a). Although GMO is an important issue for various
industries, a clear definition is lacking and few pieces of
research have tested the relationship between GMO and
organizational performance. This study is motivated to review
the related papers for market orientation and offers an
extension of the concept of market orientation (MO) (Narver
and Slater, 1990) to define GMO as a green organizational
culture that can effectively and efficiently establish the needed
green behaviors to create superior value for the customers, thus
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leading to superior business performance. Moreover, the
relationship between MO and organizational performance has
been unclear (Chen et al., 2015; Crittenden et al., 2011). To fill
the gaps, some researchers provided several approaches. For
example, several scholars (Han et al., 1998; Hurley and Hult,
1998; Slater and Narver, 1994) argued that innovation as the
missing link between market orientation and organizational
performance. Some works (Crittenden et al., 2011; Hunt and
Morgan, 1995; Wilburn Green et al., 2015) regarded MO as a
rare and valuable resource of a firm based on the resource-
based view (RBV). Some researchers (Habib et al., 2021;
Chowdhury and Quaddus, 2021; Menguc and Auh, 2006;
Song and Choi, 2018) integrated the RBV of the firm and the
dynamic capability view (DCV). In addition, some scholars
(Naidoo, 2010; Wilden et al., 2019) considered mediators and
moderators between market orientation and firm performance.
Based on the aforementioned studies, this study regard GMO
as a rare and valuable resource of a firm by RBV and NRBV.
This study also takes green supply chain management
(GSCM) capability as a dynamic capability grounded in DCV
and further uses GSCM capability as a mediating variable. The
GSCM aims to minimize wastage throughout the supply chain
(Chin et al., 2015), particularly in the procurement of raw
materials, purchasing, production, marketing and distribution
(Hervani et al., 2005). It can be viewed as a strategic tool to gain
an advantage in organizational performance, both economic
and environmental (van Hoek, 1999). A review of previous
studies on GSCM shows that scholars focused on the impact of
GSCM systems on company operating performance (Wu,
2005; Ceng et al., 2011), corporate reputation (Quintana-
García et al., 2020) and environmental performance (Rao and
Holt, 2005a). Other scholars have explored mediating and
moderating variables, such as quality environmental management
(Cheng, 2013), information technology (Ceng et al., 2011),
environmental uncertainty (Wu, 2013) and stewardship behavior
and institutional pressure (Yang, 2013; Zhu and Sarkis, 2007).
Based on these studies, a considerable number of empirical tests
have been done on the GSCM-organizational performance
relationship but little research has been done on how GMO
enhances GSCM capability and organizational performance. Li
et al. (2018b) investigated the relationship between GMO and
GSCM practices, which was measured using internal green
practice and supplier green monitoring. It can, therefore, be
gleaned that there is also a lack of a unified definition of GSCM
capability. Hence, this study draws on the DCV (Teece et al.,
1997) to define GSCM capability as the firm’s ability to integrate,
build and reconfigure internal and external competencies to green
supply chain activities.
To theoretically develop our arguments, we rely on the natural
resource-based view (NRBV) of the firm. The basic proposition of
the RBV is that organizations should be examined on the basis of
their resources; if resources can be considered as valuable, rare,
inimitable and non-substitutable, they then can be classified as
capabilities that will allow for attaining a competitive advantage
(Wernerfelt, 1984; Barney, 1991; Day, 1994). Hart (1995)
proposed the NRBV of the firm, which delivers a more
comprehensive approach to the RBV. He argues that in the actual
economy, firms do not operate in a vacuum and business decisions
are continually affected by environmental factors. Therefore, this
study conceptualizes GMOs from NRBV. The RBV focuses on
 Green market orientation
Elaine Quintana Borazon, Yi-Chun Huang and Jen-Ming Liu
heterogeneous resources (Wernerfelt, 1984; Barney, 1991), with
succeeding studies focusing on resource configuration (Eisenhardt
and Martin, 2000; Teece, 2007). Hence, having only
heterogeneous resources might not be sufficient to achieve
competitive differentiation; rather, how these resources are
advanced, designed and exploited can contribute to rarity or
uniqueness leading to competitive disparity (Blome et al., 2013).
This consciousness led to the development of the DCV (Teece,
2007). In a similar vein, this study will use DCV to define GSCM
capability. Drawing upon the NRBV and DCV, this study argues
that GMO can influence the firm’s GSCM capability and will,
thus, result in better organizational performance.
This study provides more interesting contributions to our
knowledge of green innovation by addressing some of the
drawbacks noted in the literature. First and foremost, to the best of
our knowledge, this study is the first paper to operationalize and
measure GMO and characterize GMO in terms of three elements,
namely, green customer orientation, green competitor orientation
and green cross-functional coordination. Second, this study is the
first to define and measure GSCM capability based on DCV.
Third, this research is the first to explore the relationship between
GMOs on GSCM capability. Finally, this study links both NRBV
and DCV to explain how firm steps from the static capability to
dynamic capability by investigating the mediating effect of GSCM
capability on GMO and organizational performance in the context
of the electrical and electronic industries in Taiwan.
The paper proceeds as follows: Section 2 discusses the literature
review and the conceptual framework while Section 3 presents the
methodology. Section 4 presents the empirical results while
Section 5 presents the discussions and conclusions, respectively.
2. Literature review and hypothesis development
2.1 Theory
2.1.1 Background
Market orientation is a dominant focus of modern marketing
concepts and has widely attracted academic scholars and
practitioners (Menguc and Auh, 2006; Naidoo, 2010; Powers
et al., 2020; Tseng and Liao, 2015; Wilden et al., 2019).
According to Tseng and Liao (2015), it has been conceptualized
from four standpoints, namely, cultural perspective (Narver and
Slater, 1990), behavior perspective (Kohli and Jaworski, 1990),
customer orientation perspective (Deshpandé et al., 1993;
Ruekert, 1992) and decision-making perspective (Glazer, 1991;
Shapiro, 1988). Our conceptualization of market orientation
follows some researchers (Menguc and Auh, 2006; Naidoo,
2010; Wilden et al., 2019), who take market orientation as an
element of organizational culture. The cultural perspective
defines market orientation as “the organization culture that most
effectively and efficiently creates the necessary behaviors for the
creation of superior value for buyers, and thus, superior
performance for the business” (Narver and Slater, 1990). Narver
and Slater (1990) have also argued that market orientation is
comprising behavioral components such as customer orientation,
competitor orientation and inter-functional coordination.
Previous studies have shown evidence for the positive
influence of market orientation on organizational performance
(Green et al., 2006; Li et al., 2018b; Powers et al., 2020). Other
studies, however, suggested no significant relationship (Lin et al.,
2020a, 2020b) or mixed results (Jaworski and Kohli, 1993)
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between the two constructs. Many researchers offered other
research streams. First, several scholars (Han et al., 1998; Hurley
and Hult, 1998; Slater and Narver, 1994) suggest that
innovation serves as the missing connection between market
orientation and firm performance. According to Slater and
Narver (1994), innovation is a core value that leads to the
creation of capabilities that eventually influence the market
orientation-performance relationship. Second, following the
resource-advantage theory, market orientation is a rare and
valuable firm resource that aids differentiation and delivery of
customer value to enhance competitive advantage (Crittenden
et al., 2011; Hunt and Morgan, 1995; Wilburn Green et al.,
2015). Crittenden et al. (2011) argued that firms that combine
sustainability into their marketing strategy could attain a
distinctive advantage over their competitors. Third, marketing
researchers (Habib et al., 2021; Chowdhury and Quaddus, 2021;
Menguc and Auh, 2006; Song and Choi, 2018) have started
integrating the RBV and dynamic-capabilities perspective with
marketing and management theories. In their original study of
resource-advantage theory, Hunt and Morgan (1995) labeled
market orientation as a valuable, rare, socially complex and
causally ambiguous firm resource. However, not all firms have
the capability to spawn and sustain a competitive advantage with
the implementation of market orientation strategies (Day, 1994;
Hunt and Morgan, 1995). Subsequently, Menguc and Auh
(2006) posited that market orientation would lead to greater
improvement in organization performance when integrated with
other internal resources that are complementary to lead to the
creation of dynamic capabilities. Fourth, researchers recently
consider mediators and moderators between market orientation
and firm performance, and these mediators and moderators
should inform both academic research and managerial practice.
For instance, the study by Naidoo (2010) revealed that the
influence of market orientation on firm performance is mediated
by marketing-focused innovation capabilities. Wilden et al.
(2019) posit that market orientation drives the deployment of
dynamic capabilities and that affects the growth of the firm. In
addition, the result of Green et al.’s (2006) study reveals that
supply chain management strategy mediates the relationship
between the firm’s market orientation and organizational success.
Further, the finding of Min et al. (2007) shows market
orientation indirectly influences a firm’s performance through its
supply chain management. In addition, the study by Liu et al.
(2013) shows the moderating effect of market orientation on
supply chain integration-firm performance relationships.
Based on the aforementioned studies, some research gaps
need to be addressed. First, considering the increasing
pressures from the firms’ stakeholders, for instance, customers’
demand for green products and services and competitors’
engagement in green management, firms should consider
adopting a GMO (Chen et al., 2015; Li et al., 2018b; Lin et al.,
2020a). However, there are sparse studies on the relationship
between GMO and firm performance. Second, the relationship
between market orientation and a firm’s environmental
performance has not been well-established (Chen et al., 2015;
Crittenden et al., 2011). In other words, we know little
about how GMOs can enhance or diminish environmental
performance. Third, few studies have explored how GMOs
affects GSCM capability. Fourth, the mediating effects of
GSCM capability, that is, GMO leads to environmental
 Green market orientation
Elaine Quintana Borazon, Yi-Chun Huang and Jen-Ming Liu
performance and economic performance via GSCM capability
have not been sufficiently tested empirically. Therefore, this
study draws on the NRBV (Hart, 1995) and the DCV (Teece
et al., 1997; Teece, 2007; Teece et al., 2016) to build a
comprehensive research framework to examine the relationship
among GMO, GSCM capability and firm performance.
2.1.2 Green market orientation based on the natural resource-based view
Some studies (Menguc and Auh, 2006; Naidoo, 2010; Wilden
et al., 2019) have regarded MO as a capability. This study,
however, regard GMO as an element of organizational culture,
grounded in natural resource-based theory. When organizations
possess an environmentally conscientious culture and their
employees have the drive and initiative to deliver environmentally
friendly products and services to attain customer satisfaction, then
there is a possibility to attain added competitive advantage (Lin
et al., 2020a). Li et al. (2018b) pointed out that a GMO implies
that a firm robustly discovers and advances competencies,
including products and services to enhance its business
performance. GMO is an extension of the concept of market
orientation, which pertains to the firm’s philosophy to discern and
meet customers’ needs and desires through product and service
offerings (Lin et al., 2020a). Therefore, this study is an extension
of the concept of market orientation (Narver and Slater, 1990) to
define GMO as a green organizational culture that can
proficiently and effectively generate green behaviors to achieve
superior value and business performance. GMO is characterized
by three elements, namely, green customer orientation, green
competitor orientation and green cross-functional orientation.
Market orientation is a rare, valuable and inimitable firm-
level resource (Day, 1994; Hunt and Morgan, 1995). The
NRBV proposes that, as green pressures increase, firms have to
earmark their capabilities and resources to diminish some
negative impacts on the environment and to transform possible
threats into a competitive advantage (Fraj et al., 2013; Hart,
1995). The implementation of a GMO plays a significant role
in “corporate greening” and in developing and promoting
environment-friendly products and services of importance to
the customers (Crittenden et al., 2011; Chen et al., 2015; Li
et al., 2018b). Lin et al. (2020a) argued that GMO involves
processes and activities that have a less negative impact on the
environment, which are then of value to the customers.
Accordingly, Daddi et al. (2021) stressed that a GMO drives
firms to modify their environmental and organizational aims to
enhance customer satisfaction and competitive advantage.
2.1.3 Green supply chain management capability through the lens
of dynamic capability view
The supply chain management (SCM) philosophy seems to
originate from Mallen’s (1963) organizational extension
theory. Mentzer et al. (2001) define SCM as, “the systemic,
strategic coordination of the traditional business functions and
the tactics across these business functions within a particular
company and across businesses within the supply chain, to
improve the long-term performance of the individual
companies and the supply chain as a whole.” Over the past two
decades, driven by increasingly important environmental,
economic and social concerns, sustainability has become a
prime challenge for businesses to address in their supply chains
(Agyabeng-Mensah et al., 2020; Huang et al., 2017; Song et al.,
2021). GSCM, which is based on the related fields of
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environmental management and SCM (Green et al., 2012;
Huang et al., 2017; Srivastava, 2007; Zhu and Sarkis, 2004),
aims to minimize or eliminate solid waste, reduce pollution,
decrease energy consumption and conserve resources from
product design through to the product’s end of life (Habib
et al., 2021; Eltayeb et al., 2011; Zhu et al., 2012).
Several studies (Agyabeng-Mensah et al., 2020; Huang et al.,
2017; Song et al., 2021; Green et al., 2012) explored GSCM
practices but few pieces of research discussed GSCM as a
capability coupled with a lack of clear definition. For example,
Shang et al. (2010) argued that GSCM capability, which is also
a source of competitive advantage, involves “finance flow,
logistics flow, information flow, integration, relationships and
environmental management.” Daddi et al. (2021) regarded
GSCM and supply chain capabilities as similar concepts.
GSCM is defined as integrating environmental thinking in
managing supply chains while supply chain capability is the
ability of the firm to recognize, use and integrate both internal
and external resources and information to enable supply chain
activities (Wu et al., 2006; Daddi et al., 2021; Bharadwaj, 2000).
This research, thus, draws on DCV (Lee and Rha, 2016; Gligor
et al., 2016; Hong et al., 2018) to define GSCM capability.
Dynamic capabilities are defined as “the firm’s ability
to integrate, build and reconfigure internal and external
competencies to address rapidly changing environments” (Teece
et al., 1997). Chowdhury and Quaddus (2021) argue that
organizations require dynamic capabilities to be able to recognize,
adjust and be responsive to the sustainability requirements of their
stakeholders. Teece (2007) regarded dynamic capability as the
higher-order capability of the firm and created an integrated
framework on building dynamic capabilities, such as sensing for
threats and opportunities, seizing or taking hold of opportunities
and transforming tangible and intangible resources. Teece
et al. (2016) distinguish between three categories of dynamic
capabilities, namely, sensing capability, which involves
identifying unique opportunities; seizing capability, which is
leveraging resources to take advantage of opportunities; and
transforming ability, which is the ability to restructure or
renew the organization. Supply chain management capability
can be thought of as a dynamic capability for the following
reasons, namely, first, it can be categorized as a higher-level
capability (Lee and Rha, 2016; Gligor et al., 2016). Second, it
can aid in transforming routines (Blome et al., 2013; Daddi
et al., 2021). Third, it can aid in reconfiguring resources and
enable sensing and taking advantage of environmental
opportunities and threats (Chowdhury and Quaddus, 2021;
Hong et al., 2018). In a similar vein, this study defines GSCM
capabilities as the ability of the firm to assimilate, construct
and realign competencies to green supply chain activities.
GSCM capability includes green environment management
capability, green information system capability, green
manufacturing capability and green suppliers’ capability to
sense, seize and transform firm’s green opportunities and
resources to capture superior firm performance.
2.2 Hypotheses development
2.2.1 Green market orientation and green supply chain manage-
ment capability
In response to the current issues on ecological imbalance and
depleting natural resources, for example, contemporary studies
 Green market orientation
Elaine Quintana Borazon, Yi-Chun Huang and Jen-Ming Liu
have adopted the GMO, which includes green customer
orientation, green competitor orientation and green cross-
functional collaboration, as a new approach in strategic
marketing management (Mitchell et al., 2010; Li et al., 2018b).
This market orientation strategy allows firms to have the
necessary cultural characteristics that enable them to respond
to the latent and expressed needs of their consumers (Dabrowski
et al., 2019; Sok and O’Cass, 2015). A shift in consumer
demand brought about by environmentalism has become a
driving force for firms to pioneer green innovation (Galinato and
Chouinard, 2018; Hsu and Hu, 2009) and voluntary
environmental certification, for example, has symbolized a firm’s
strategic response to market pressures (Martín-de Castro et al.,
2017). Thus, firms will modify their marketing approaches when
under the influence of market power.
In addition to customer demand, the pressure from competitors
is critical in affecting the implementation of “green” strategies
(Berrett and Slack, 2001) and motivate firms to improve their
proactive environmental strategies (Dai et al., 2018). Day (1994)
claims that firms must be highly sensitive to the dynamics of
external competitors in response to the diversified needs of
customers and the rapid changes in the market. The pressure from
competitors can strengthen a firm’s supply chain capabilities and its
internal operational capabilities (O’Cass and Weerawardena,
2010). Firms actively develop energy-efficient production processes
and product innovations because of market competition, thereby
strengthening their market position (Bansal and Roth, 2000). Hsu
and Hu (2009) also believe that to meet customer needs, firms will
strive for pioneering advantages over their competitors and improve
their capabilities based on the “green” friendly environmental
strategies to achieve a competitive advantage.
Accordingly, the higher the uncertainty of the industrial
environment, the higher the degree of integration between suppliers
and manufacturers, making them responsive to external changes
(Lu, 2003). Researchers (Gölgeci et al., 2019; Chan et al., 2012b;
Mariadoss et al., 2016) have also recognized the importance of
cross-functional collaboration among network partners in the
supply chain to help reduce environmental degradation. The study
by Shibin et al. (2020) in Indian auto parts manufacturing firms
reveals that coercive pressures indirectly drive supply chain
connectivity and information sharing. It can be said that cross-
functional collaborations promote innovations within supply chain
operations (Kumar and Rodrigues, 2020). Hence, firms that adopt
a GMO recognize the environmental repercussions of their
practices and they will strive to enhance their GSCM capability (Li
et al., 2018b; Meixell Mary and Luoma, 2015). The research of
Green et al. (2006) reveals that market orientation positively affects
supply chain management strategy while Song and Choi (2018)
found that market orientation positively aids the successful
execution of GSCM. Accordingly, Habib et al. (2020) found that
market orientation has a positive influence to the adoption of
GSCM practices. Thus, it is proposed that:
H1. GMO positively influences the GSCM capability of
enterprises.
2.2.2 Green supply chain management capability and organiza-
tional performance
Due to the alarming cases of environmental issues, there is a
pressing need for radical change across management systems
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(Ceschin and Gaziulusoy, 2016). GSCM, which involves
promoting synergy and efficiency among partners, aims to
minimize wastage and increase ecological efficiency throughout
the supply chain (Chin et al., 2015; Rao and Holt, 2005b),
from product conceptualization to the procurement of raw
materials, purchasing, production, marketing and distribution
(Srivastava, 2007; Hervani et al., 2005). Shang and Marlow
(2005) categorize GSCM capability into logistics flow,
integration, finance flow, relationships, environmental
management and information flow. Beamon (1999) argues that
the GSCM is an extension of the traditional one-way supply
chain relationship into a closed-loop relationship. It aims to
lessen environmental impacts and intensify efficiency by
upgrading and repurposing resources (Alamerew and Brissaud,
2020; Li et al., 2018a). GSCM is a cyclical system for suppliers,
manufacturers, retailers and customers and firms are
recognizing the need to apply this closed-loop approach in their
supply chain network (Govindan et al., 2020). Besides, much of
the environmental footprint of firms is exerted by the network
partners that comprise their supply chain (Chan et al., 2012a;
Mariadoss et al., 2016).
GSCM stretches sustainability boundaries by circulating
resources across the supply chain, thus reducing the need for
virgin raw materials (Genovese et al., 2017; Shankar et al.,
2017). In this way, firms might be able to reduce their costs for
raw materials (Iqbal et al., 2020) and further minimize energy
consumption (Nejati et al., 2017). A recent study by Gharaei
et al. (2019) on integrated multi-level supply chains emphasizes
its efficient recovery of post-used products. Moreover, firms
that implement environmental management strategies do not
only avoid regulatory fines and sanctions but also enhance the
green image of the firm (Chen et al., 2018; Quintana-García
et al., 2020). The assimilation of GSCM can be viewed as a
strategic tool to improve organizational advantage and gain
sustainable competitive advantage (van Hoek, 1999). In essence,
GSCM can improve environmental performance (decrease waste,
reduce emissions and improve environmental commitment) and
competitiveness (improvement of product quality, increasing
efficiency, increasing productivity and saving costs), which
consequentially affects economic performance (Wang et al., 2020;
Geng et al., 2017).
Green et al. (2012) found that the adoption of GSCM
practices by manufacturers leads to better economic and
environmental performance. Song and Choi (2018) and Habib
et al. (2020) also found that the implementation of GSCM
positively enhances environmental and economic performance.
Hong et al. (2018) found that supply chain dynamic capabilities
affect only environmental performance positively. Daddi et al.
(2021) found that a higher level of GSCM capability will lead
to greater market competitiveness while Chowdhury and
Quaddus (2021) found that supply chain sustainability has
a positive bearing on market performance. Thus, it is
hypothesized that:
H2. GSCM capability positively influences the environmental
performance of enterprises.
H3. GSCM capability positively influences the economic
performance of enterprises.
 Green market orientation
Elaine Quintana Borazon, Yi-Chun Huang and Jen-Ming Liu
2.2.3 Green market orientation and organizational performance
Previous studies (Gligor et al., 2021; Gligor et al., 2019; Abbu and
Gopalakrishna, 2021; Dabrowski et al., 2019) have confirmed
that market orientation can bring organizational performance to
enterprises. Other studies have shown the positive influence of
market orientation on entrepreneurial orientation (Balodi, 2014;
Laukkanen et al., 2013) and market positioning strategies (Iyer
et al., 2019). Also, Green et al. (2006) found that market
orientation positively affects marketing performance. These imply
that focusing on customer needs and wants will be linked to
higher sales in the long run and anticipating the actions of
competitors will help firms protect their competitive position in
the market (Acosta et al., 2018). Firms that have the necessary
market information can allocate their processes to develop specific
products or services aligned with the needs and wants of their
customers (Bhattarai et al., 2019). Therefore, focusing on the
demands of the market for green technology will be necessary for
the firm’s financial performance.
Also, adapting a GMO has been a successful strategy in
mitigating the adverse environmental effects, whereas businesses,
conversely, have been inevitably subjected to pressure. In fact,
according to Weatherall (1990), the specific nature of green
technology is directly related to the human environment and the
emergence of green technology can save energy and natural
resources. For example, pollution prevention technology can
reduce waste emissions and reduce costs (Shrivastava, 1995;
Hart, 1995). Albrizio et al. (2016) have concluded that policy
reforms have presented confounding challenges to firms as they
entail high costs and low incentives; thus, firm productivity
suffers negative short-term effects. Industries, however, are
challenged to efficiently adapt environmental strategies in
production design, sourcing and reallocation of resources and
distribution (Wang et al., 2019). Berry and Rondinelli (1998)
found that resolving environment-related problems do not only
protect firms from paying exorbitant regulatory fines, but it also
enhances the firm’s reputation, thus opening up new market
opportunities. Moreover, previous studies by Wilburn Green
et al. (2015) and Chung (2020) have revealed the positive
influence of GMOs on environmental performance. A GMO,
therefore, implies that firms, through their green practices, can
gain customer value and profit-enhancing activities.
Still, the potential value of a GMO relies on how it positively
drives green behaviors (Chan et al., 2012a; Li et al., 2018b).
Therefore, it is worth investigating whether and how a GMO
can facilitate organizational performance. A firm’s GMO can
be regarded as a resource unique to the firm that aids in shaping
its strategic vision and boosts green actions (Chen et al., 2015;
Li et al., 2018b). As one of the intangible resources, GMOs
plays a role in enhancing profit, customer value and
competitive advantage. Thus, it is proposed that:
H4. GMO positively influences the environmental performance
of the enterprise.
H5. GMO positively influences the economic performance of
the enterprise.
2.2.4 Mediating effect of green supply chain management
capability
GMO influences organizational performance through GSCM
capability. When firms take into consideration the market
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expectations including environmental regulations, they enhance
their traditional production processes toward a green production
system (Hopfenbeck, 1993). Firms must constantly update their
capabilities to adapt to changing market demands and create
competitive advantages by enhancing, integrating, protecting
and reorganizing corporate resources (Teece et al., 1997; Teece,
2007). A GMO then implies that firms develop their
environmental capabilities to attain better performance and in
this way, it also influences the firms’ acquisition of resources to
ensure successful environmental management (Li et al., 2018b).
Correspondingly, a market-oriented approach encourages a firm
to collaborate with its partners in the supply chain leading to an
interdepartmental linkage so as to facilitate knowledge sharing
and consequently proactively meet consumer needs (Choi,
2014; Jaworski and Kohli, 1993). Hence, a GMO enables the
deployment of GSCM capabilities. This interplay between
capabilities and resources enhances organization performance
(Papadas et al., 2019). Additionally, challenges in inefficient
supply chains may be addressed by considering societal and
environmental concerns (Kamble et al., 2019).
From RBV, Gligor et al. (2016) suggest that firms should
identify resources that contribute to their competitive
advantage and use these resources to contribute to their value.
Yet, it is not adequate for firms to only have resources that aid
in achieving superior performance (Sirmon et al., 2007).
Rather, it would be best that these resources are effectively
managed and exploited (Blome et al., 2013). Thus, the DCV
has been proposed to aid in explaining how firms should be able
to attain competitive advantage in a dynamic environment
(Teece et al., 1997). Dynamic capabilities’ elements (i.e.
sensing, seizing and transforming) allow firms to respond to
changes in the market (Teece, 2007). Wilden et al. (2019) has
highlighted the critical role of dynamic capabilities deployment
in creating new markets. Though past studies have explored the
market orientation-dynamic capabilities relationship, these
have not amply explored the mediated relationship between the
said constructs. According to Menguc and Auh (2006), market
orientation may lead to dynamic capabilities development
should there be innovativeness in the organization. Naidoo
(2010) claims that market orientation influences organizational
performance through dynamic capabilities. Gligor et al. (2016)
posited that market orientation can be considered a strategic
resource that could possibly lead to improved firm supply chain
management, which can then enhance firm competitiveness.
The study by Min et al. (2007) reveals that market
orientation indirectly influences firm performance through the
supply chain. The findings of Green et al. (2006) show that the
firm’s SCM strategy serves to mediate the relationship between
market orientation and marketing performance. The study by
Wilburn Green et al. (2015) indicates that market orientation
indirectly impacts environmental performance through GSCM
practices. Li et al. (2018b) found that GMOs indirectly
influence environmental performance through internal green
practice. Lin et al. (2020a) posit that GMO includes “cross-
functional green processes and activities” that aim to offer
customer satisfaction by way of continuous evaluation of
GSCM capabilities and improved customer value. Hence,
GMO will lead to increased organizational performance
through the management of the firm’s GSCM capability. Thus,
it is hypothesized that:
 Green market orientation
Elaine Quintana Borazon, Yi-Chun Huang and Jen-Ming Liu
H6. GMO can influence environmental performance
indirectly through the GSCM capability of enterprises.
H7. GMO can influence economic performance indirectly
through the GSCM capability of enterprises.
3. Research methodology
3.1 Research model
Drawing on the strategic management and natural resource-
based theories and previous studies on organizational
performance, GMO and GSCM capability, Figure 1 shows the
conceptual framework indicating the relationships among the
constructs.
3.2 Measure development
This study used three major constructs, namely, GMO, GSCM
capability and organizational performance. GMO was measured
using three factors, namely, green customer orientation, green
competitor orientation and green cross-functional orientation.
GSCM capability included elements such as green environment
management capability, green information system capability,
green manufacturing capability and green suppliers’ capability.
The organizational performance was measured using
environmental and economic performance. A seven-point Likert
scale (1-strongly disagree to 7-strongly agree) was used to assess
the constructs. The detailed primary data collection instrument
is shown in the Appendix. Table 1 presents the operational
definition of the research variables.
Control variables: This research controlled for the industrial
sector, ISO 14001 certification and the age of the firms. First,
this study included dummies to address industry-specific
effects. These variables include the electrical, semiconductor,
computer and peripheral equipment and communication and
consumer electronics sectors. These variables were included to
control for variations among industries in terms of pressures
from the environment, damage due to the external environment
and opinions related to environmental issues (Huang et al.,
2017). The ISO 14001 certification, which sets the criteria for
environmental management systems, was defined in October
1996 and implemented globally. To assess whether the samples
adopted the ISO 14001, the date of certification was given. If a
firm is ISO 14001 certified, then it was coded 1 and 0 otherwise
(Delmas and Toffel, 2008). Age was calculated as the difference
Figure 1 Conceptual model
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between 2019 and the founding year of the firm. As the firm
ages, organizational inertia may constrain them from responding
to environment-related issues (Egri and Herman, 2000).
3.3 Sampling and data collection
Taiwan serves as an excellent subject for a case study on the
green management practices being implemented in emerging
markets for the following reasons. First, numerous Taiwanese
manufacturers are increasingly being challenged and pressured
to improve their processes to meet the challenges due to
uncertainties in the business environments (Huang et al.,
2016). Second, Taiwan is an export-oriented economy having
more than 13,000 electrical and electronic product manufacturers
trading their products to Europe annually, which then generates a
production value of almost US$290bn (Taiwan Electrical and
Electronic Manufacturers’ Association, 2019). Third, the RoHS,
WEEE and EuP directives adversely affect Taiwan’s electrical and
electronics industries, which is about 30,000 manufacturers, and
thus, affecting their execution of green supply chain initiatives.
This research is based on companies in the electrical and
electronics industries in Taiwan. According to the “Taiwan
Electrical and Electronic Trade Unions,” the domestic
electrical and electronics industry is divided into the electrical,
semiconductor, computer and peripheral equipment and
communication and consumer electronics sectors. Following
the research of Lambert and Harrington (1990), before mailing
the questionnaires, e-mails to the Taiwan Electrical and
Electronic Trade Union, which has 3,615 members, were sent.
In the said e-mail, the research project was explained and each
member was encouraged to return the four-page questionnaire.
A total of 1,200 members confirmed their willingness to fill out
the questionnaire. Next, the questionnaire was sent to randomly
select 750 members – manufacturers (with a capital of at least 10
million) of the Taiwan Electrical and Electronic Trade Union.
There were 98 completed questionnaires returned from the first
mailing. Follow-up telephone calls were conducted to encourage
individuals to respond. The telephone calls were followed by the
mailing of the questionnaires. A total of 207 completed
questionnaires were returned, representing a 27.6% response rate.
3.4 Non-response bias and common method bias
The non-response bias of the survey was evaluated using an
extrapolation method (Larson and Poist, 2004), which
compares first- and second-wave responses across a selection of
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Table 1 Operational definition summary table

Research constructs Element Operational definition Item References
Green market Green customer orientation Understand the green target customer base and 6 Narver and Slater (1990), Slater and Narver
orientation be able to continue to create superior value for (1994), Li et al. (2018a, 2018b)
them
Green competitor Understand the short-term strengths and 4
orientation weaknesses and long-term capabilities and
strategies of current or potential green
competitors
Green cross-functional Integrate and use the company’s green resources 5
coordination to create superior value for green target
customers
Green supply chain Green environment The ability of the company to combine 7 Winn and Roome (1993), Hopfenbeck (1993),
management management capability environmental factors with its management Zhu et al. (2008b)
capability structure
Green information Enterprises use information systems to manage 10 Esty and Winston (2006), Preuss (2002)
system capability their ability to monitor green supply chains
Green manufacturing The ability of enterprises to reduce energy 6 Melnyk and Smith (1996), Zhu et al. (2008b)
capability consumption, reduce pollution and incorporate
environmental factors in the manufacturing
process
Greening suppliers’ The ability of enterprises to add environmental 7 Winn and Roome (1993), Rao and Holt
capability factors in the process of supplier selection and (2005a, 2005b), Sarkis and Sroufe (2004),
management Zhu et al. (2008b)
Organizational Environmental performance Enterprises promote the efficiency and 8 Huang and Wu (2010)
Performance effectiveness of electrical and electronic
innovation
Economic performance The ability of enterprises to use resources and 6 Lin (2001)
the degree to achieve corporate goals

items in the questionnaire. Previous studies have used this
method and t-tests were done to compare the demographic
variables between first and second wave responses (Boon-itt
and Wong, 2011; Jack et al., 2010). T-tests were done to
compare the demographic and study variables between the first
and second wave respondents. The results showed no
significant difference (p > 0.05) between the first- and second-
wave respondents in any of the study variables. Also, following
the research of Lambert and Harrington (1990), a two-page
version of the questionnaires, which included the 15 variables
evaluated as most important by the 207 respondents was sent to
a sample of 100 non-respondents. There were 35 questionnaires
returned, which when compared to the respondents of the first
two mailings showed no significant differences (p < 0.05). Thus,
non-response bias was not an issue.
As two antecedent variables were measured using the items in
a questionnaire accomplished by a single respondent, the
Harman one-factor test was done to evaluate the presence of
common method variance (Flynn et al., 2010; Podsakoff et al.,
2003; Lii and Kuo, 2016; Shashi et al., 2019). The results
showed the absence of a single dominant factor that accounts for
the majority of the variance in the self-reported variables. Thus,
common method bias is dubious to cause a problem in the data.
3.5 Data analysis
Structural equation modeling, using a two-step method
according to Hair et al. (2019), was used to test the hypothesized
relationships. A confirmatory factor analysis (CFA) was first
done to evaluate the validity and reliability of the measures. All
analyzes were done using statistical package for the social
sciences (SPSS) 18.0 for Windows and analysis of moment
structure (AMOS) 18.0 statistical packages.
4. Research results
4.1 Profile of the respondents
Among the 207 valid questionnaires, the proportion of male
respondents was 63.8% and a majority of the respondents
attained a college degree, accounting for 41.5% of the
respondents. In terms of shareholder characteristics, 10% of
the respondents are run by the family while 62.3% have
directors other than the family member of the business owner.
In terms of company equity, the same family or a legal
representative of the enterprise accounts for more than 50%
and 49.8%, respectively. The company’s operating status was
the largest in the first generation, accounting for 55.6%. In
terms of size, 59.9% of the respondents have 500 or fewer
employees. The respondent characteristics were reported in
Table 2.
4.2 Reliability and validity analysis
According to Cuieford (1965), Cronbach’s a coefficient of
greater than 0.7 signifies good reliability, while coefficients
between 0.7–0.35 are deemed acceptable while those below

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Table 2 Demographic characteristics of the respondents

Demographic Respondents
statistics Nos. (%)
Industry categories
Electrical sectors 60 29.0

Semiconductor sectors 31 15.0

Computer and peripheral equipment sectors 71 34.3

Communication and consumer electronics sectors 45 21.7

ISO 140001 certification Yes 134 64.7

No 73 35.3
Age of firms Under 10 4 1.8
11–20 61 29.5
21–30 54 26.1
31–40 59 28.5
Over 40 29 14.0
Size of firms (number of employee) Under 200 58 28.0
201–500 66 31.9
501–1,000 38 18.4
1,001–2,000 21 10.1
Over 2,000 24 11.6
Notes: 1. n = 207; 2. Age was calculated as the difference between 2019 and the founding year of the firm

0.35 should be rejected. The internal consistencies of the
constructs are shown in Table 3. The Cronbach’s a coefficients
are all higher than 0.7, which shows that the scale is roughly in
the high confidence range and has a certain degree of internal
consistency.
A CFA was done to assess the validity of the instrument.
Composite reliabilities were calculated and the results (as
shown in Table 3) are all greater than 0.5, indicating
internal consistencies in the scale items (Hair et al., 2019).
According to Fornell and Larcker (1981), the factor
loading should be greater than 0.5 and the t-values should
be greater than 2 and is significant to establish convergence
validity. All factor loadings of the scale items are greater
than 0.5, t-values are greater than 2 and are significant.
Thus, convergence validity was verified.
4.3 Discriminant validity analysis
Discriminant validity signifies that the constructs are unique
and the degree of correlation is low (Wu and Lin, 2002).
According to Hair et al. (2019), to establish discriminant
validity, the average variance extracted (AVE) estimates of the
constructs has to be greater than the squared correlations of
the constructs. As shown in Table 4, all AVEs are greater than
the interconstruct correlations, and therefore, discriminant
validity was established.
4.4 Correlation analysis
Correlation analysis is used to test the relationship between the
two pairs of variables. To test the correlation between GMO,
GSCM capability, environmental performance and economic
performance, Pearson correlation coefficients were generated

Table 3 Analysis of reliability and validity

Average variance extracted
Research constructs Elements Composite Reliability (CR) (AVE) Cronbach’s a
Green market orientation Green customer orientation 0.982 0.901 0.815
Green competitor orientation 0.978 0.919 0.820
Green cross-functional 0.971 0.877 0.847
coordination
Green supply chain Green environment 0.986 0.910 0.916
management capability management capability
Green information system 0.994 0.944 0.963
capability
Green manufacturing 0.984 0.925 0.928
capability
Greening suppliers’ capability 0.993 0.953 0.955
Organizational performance Environmental performance 0.992 0.943 0.956
Economic performance 0.990 0.937 0.967

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Table 4 Discriminant validity

Constructs 1 2 3 4 5 6 7 8 9
1 Green customer orientation 0.949
2 Green competitor orientation 0.569 0.959
3 Green cross-functional coordination 0.580 0.694 0.963
4 Green environmental management capability 0.270 0.424 0.465 0.954
5 Green information system capability 0.272 0.384 0.435 0.722 0.971
6 Green suppliers’ capability 0.214 0.414 0.387 0.766 0.657 0.962
7 Green manufacturing capability 0.230 0.252 0.329 0.519 0.709 0.622 0.976
8 Environmental performance 0.275 0.489 0.518 0.671 0.694 0.622 0.548 0.971
9 Economic performance 0.218 0.405 0.407 0.599 0.534 0.647 0.513 0.717 0.968

Note: Indicates a p-value of < 0.01 and the diagonal values are the square root of the average variance extracted (AVE)

Table 5 Correlation coefficients

Constructs (1) (2) (3) (4)
(1) Green market orientation 1.000
(2) Green supply chain management capability 0.464 1.000
(3) Environmental performance 0.508 0.731 1.000
(4) Economic performance 0.408 0.665 0.717 1.000
 
Notes: Indicates a p-value < 0.01; Indicates a p-value < 0.05

and are shown in Table 5. All correlation coefficients are less Table 6 Overall mode fit
than 0.90 (Kline, 2016), implying discriminant validity among
Fit indices Standard Results Compliance
the constructs.
Chi-square 231.693 (p = 0.000)
DF 128
4.5 Hypothesis testing
Chi-square/DF <3 1.812 Yes
The hypothesized relationships were tested using structural
GFI >0.8 0.906 Yes
equation modeling. The model fit indices were also assessed AGFI >0.8 0.830 Yes
and based on the results (as shown in Table 6), the measurement NFI >0.9 0.958 Yes
model is valid. CFI >0.9 0.981 Yes
The structural paths and the path estimate for all the RMR <0.05 0.044 Yes
constructs are shown in Figure 2. Table 7 provides a summary RMSEA <0.1 0.063 Yes
of the variables while Table 8 summarizes the path coefficients
and the result of the hypotheses testing. This study shows that
GMO positively influences GSCM capability, environmental Table 9 shows that under the four requirements suggested by
performance and economic performance while GSCM Baron and Kenny (1986), namely, for the path from GMO to
capability positively influences economic and environmental environmental performance, the path coefficient is 0.216 and
performance. the t-value is 4.160 (p < 0.01). GSCM capability affects
environmental performance with a coefficient of 0.631 and a
4.6 Analysis of mediation effects t-value of 12.169. These results reveal that GSCM capability
According to Baron and Kenny (1986), to tell the presence of mediates the effect of GMO on environmental performance.
mediation, regardless of the statistical method used, the Table 10 shows that under the conditions of Baron and
following four conditions should be met, namely, the Kenny (1986), for the path from GMO to environmental
independent variable significantly influences the dependent performance, the coefficient is 0.127 and the t-value is 2.174
variable; the independent variable must significantly influence (p < 0.01). The GSCM capability affects economic
the mediating variable; the mediating variable must significantly performance, with a path coefficient of 0.607 and a t-value of
influence the dependent variable; and when adding independent 10.399 (p < 0.01). Thus, GSCM capability mediates the effect
variables and mediating variables to predict the dependent of GMO on economic performance.
variable, the predictive power of the independent variable on the
dependent variable should not be significant or zero. When all 4.7 Summary
these conditions are attained, full mediation can be concluded. Based on the structural equation modeling analysis, all
When the first three requirements are met, partial mediation can hypothesized relationships in this study are supported. Table 11
be concluded. shows a summary of the hypotheses established.

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Figure 2 Path diagram

Y5 ε6

0.670

Y6 ε7
0.756
Ӻ˅
Y7 ε8
0.780
δ1 X1 0.636
0.897 Y8 ε9
0.853 0.272***
δ2 X2 ζ1 η2
0.823 0.898 Y9
ε10
δ3 X3
0.889
Y10
ε11

0.615*** 0.951
Y11
ε12

0.919
0.557*** Y12
ε13

Y13
0.945 ε14

ε1 Y1 0.138**
0.889
Y14
0.945 ε15

ε2 Y1 0.808

0.971 Y15
ε16
0.622***
0.862
ε3 Y3 η1 η3
0.721 0.942 Y16
ε17

ε4 Y4
0.836 Y17
Ӻ˄ Ӻˆ ε18

0.927
Y18
ε19

Note: Significance：1. ***significant at p < 0.01；**significant at p < 0.05 2.

The coefficients are standardized coefficients

Table 7 Summary of variables

Constructs Elements
f 1: Green market orientation X1: Green customer orientation;
X2: Green competitor orientation;
X3: Green cross-functional coordination
g1: Green supply chain management capability Y1: Green environment management capability;
Y2: Green information system capability;
Y3: Greening suppliers’ capability;
Y4: Green manufacturing capability
g2: Environmental performance Y5-Y12: Items 1–8
g3: Economic performance Y13-Y18: Items 9–14

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Table 8 Path coefficients and hypothesis verification results

Parameter Standardized estimates t-values Standard compliance

Green market orientation fi green supply chain management capability 0.557 6.457 Yes
Green supply chain management capability fi environmental performance 0.615 7.226 Yes
Green supply chain management capability fi economic performance 0.622 8.539 Yes
Green market orientation fi environmental performance 0.272 3.894 Yes
Green market orientation fi economic performance 0.138 2.013 Yes
Notes: 1.  Significant at p < 0.01;  significant at p < 0.05. 2. The coefficients in the table are standardized coefficients

Table 9 Mediating effect of green supply chain management on green market orientation and environmental performance
Environmental performance Green supply chain management capability
Research construct Mode 1(xfiy) Mode 3(z!y) Mode 4(x 1 z!y) Mode 2(x!z)
Green market orientation 0.508 0.216 0.464

Green supply chain management capability 0.731 0.631

Note: Significant at p < 0.01

Table 10 Mediating effect of green supply chain management on green market orientation and economic performance
Economic performance Green supply chain management capability
Research constructs mode 1(xfiy) mode 3(z!y) mode 4(x 1 z!y) mode 2(x!z)
Green market orientation 0.408 0.127 0.464
Green supply chain management capability 0.665 0.607

Notes: Significant at p < 0.01;  significant at p < 0.05

Table 11 Summary of results

Hypotheses Result
H1 Green market orientation has a positive impact on the green supply chain management capability of Established
enterprises
H2 Green supply chain management capability has a positive impact on the environmental performance of Established
enterprises
H3 Green supply chain management capability has a positive impact on the economic performance of Established
enterprises
H4 Green market orientation has a positive impact on the environmental performance of enterprise Established
H5 Green market orientation has a positive impact on the economic performance of enterprise Established
H6 Green market orientation can influence environmental performance indirectly through green supply chain Established
management capability of enterprises
H7 Green market orientation can influence economic performance indirectly through green supply chain Established
management capability of enterprises

4.8 Endogeneity analysis
Though endogeneity may not be completely eliminated in an
empirical study (Ketokivi and McIntosh, 2017; Shou et al.,
2020), several precautions were done to minimize the probable
risk. First, to resolve endogeneity because of the differences in
motivations of the respondents, late-response bias was assessed
(Boon-itt and Wong, 2011; Jack et al., 2010; Lambert and
Harrington, 1990), as reported in Section 3.4. Second,
endogeneity may be because of common method bias (Guide
and Ketokivi, 2015; Podsakoff et al., 2012; Podsakoff et al.,
2003) and this was addressed using statistical remedies, as
presented in Section 3.4. Third, although the cross-sectional
nature of the survey implies that causality may not be definite,
the survey items were taken from literature and were written
with similar items that required time-ordered responses
(Huang et al., 2016; Li et al., 2018b; Slater and Narver, 1994).
Fourth, as suggested by Shou et al. (2020) to warrant valid
causal claims and circumvent the possibility of having
endogeneity bias, fitting control variables were included to
lessen omitted variable bias and then generate estimates based
on the maximum likelihood method. Moreover, the probability
of reverse causality and simultaneity between the independent

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Elaine Quintana Borazon, Yi-Chun Huang and Jen-Ming Liu
and dependent variables were assessed. This study tested
ex-post to know as to whether endogeneity was a probable
problem between organizational (environmental and
economic) performance and GSCM capability (Huang et al.,
2016) relationship. Following Ketokivi and McIntosh
(2017), Wu-Hausman’s test was performed. Following
previous studies, this research set the instrumental variables
as industrial sectors, ISO 14001 certification and age of the
firms (Shou et al., 2020; Zahid et al., 2020). This test used
“the R Project for Statistical Computing_ R version 4.0.3” to
analyze the research data. This research first regressed
environmental performance on all exogenous variables and
GSCM capability. The result shows that the p-value is larger
than 0.05 (p > 0.05), signifying that endogeneity was absent.
Then, we did the same analysis for economic performance.
The result also reveals that the p-value is larger than 0.05
(p > 0.05) indicating that endogeneity was not present.
Thus, the results of Wu-Hausman’s test reveal no
endogeneity issues in this study.
5. Discussion and implications
5.1 Research findings
This study investigated the relationships among GMO,
GSCM capability and organizational performance. First,
our results exhibit that GMO (green customer orientation,
green competitor orientation and green cross-functional
coordination) enhance the company’s GSCM capability.
These findings also confirm the extant literature claiming
that a market-oriented approach will allow for the
development of firm capabilities (Li et al., 2018b). Some
researchers argued that market orientation improves
supply chain management strategy (Green et al., 2006),
implementation (Song and Choi, 2018) or GSCM
practices (Habib et al., 2020). Second, we also found that
GSCM capability increases the environmental and
economic performance of enterprises. These results
support and echo the findings of previous studies (Bowen
et al., 2001; Chowdhury and Quaddus, 2021; Daddi et al.,
2021; Green et al., 2012; Habib et al., 2020; Song and
Choi, 2018; Tseng and Chiu, 2013) that GSCM positively
influences the firm’s environmental and economic
performance. Moreover, efficient supply chains, as
characterized by connectivity and information sharing,
lead to better environmental performance (Shibin et al.,
2020). Third, we also found that the higher the GMO, the
higher the environmental and economic performance of the
firm. These findings also confirm that some researchers
have stressed that firms can affect the organizational
performance of other firms in response to market demand
(Doonan et al., 2005; Hart, 1995). Further, GMO leads to
better green practices, specifically concerning pollution
prevention, and therefore, lead to better environmental
performance (Li, 2014). Moreover, previous studies (Gligor
et al., 2019; Gligor et al., 2021) support this finding, as market
orientation leads to better financial performance. Fourth, our
findings support the hypothesis that a firm’s GSCM capability
mediates the effect of GMO on environmental and economic
performance. This result echoes those of previous studies in that
a strategic orientation (i.e. GMO) with the natural environment
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enables the development of supply chain management
capabilities to improve sustainable competitive advantage (Li
and Liu, 2014). Moreover, according to Wilburn Green et al.
(2015), market orientation indirectly impacts environmental
performance through GSCM practices. Besides, GMO
indirectly influences environmental performance through
internal green practices (Li et al., 2018b; Lin et al., 2020b).
5.2 Theoretical implications
The results of our study have several implications that
extend existing theory. First, our study extends the concept
of market orientation (Menguc and Auh, 2006; Naidoo,
2010; Narver and Slater, 1990; Wilden et al., 2019) to define
GMO, thereby advancing the market orientation theory
(Deshpandé et al., 1993; Kohli and Jaworski, 1990; Narver
and Slater, 1990) and allowing the increase in
understanding and explanations as to how market
orientation can incorporate the “green” element into the
firm’s processes. Also, this study has characterized GMO
into three elements, namely, green customer orientation,
green competitor orientation and green cross-functional
coordination. To the best of our knowledge, this study is the
first paper to operationalize, define and measure GMO. Our
study contributes to and extends the literature on market
orientation to green issues.
Second, this study uses NRBV (Hart, 1995), which delivers a
more comprehensive approach to the RBV (Wernerfelt, 1984;
Barney, 1991; Day, 1994) to examine the relationship between
GMO and organizational performance. As has been argued by
previous studies, market orientation is a rare and valuable
resource that contributes to firm differentiation and customer
value delivery that then enhances competitive advantage
(Crittenden et al., 2011; Hunt and Morgan, 1995; Wilburn
Green et al., 2015). The inclusion of GMO grounded in NRBV
serves as a contribution of this research, leading NRBV to
another dimension.
Third, several researchers (Agyabeng-Mensah et al., 2020;
Green et al., 2012; Huang et al., 2017; Song and Choi, 2018)
explore GSCM practices but a few studies discuss GSCM as a
capability and lack a clear definition. This study draws upon
DCV to define and measure GSCM capability making a unique
contribution to GSCM literature.
Fourth, this study assessed organizational performance
in terms of environmental and economic performance,
thereby echoing some researchers’ recommendations on
assessing the impact of supply chain performance (Habib
et al., 2021; Tseng and Liao, 2015). Moreover, in the
previous studies mentioned, organizational performance
was often studied as a single variable and usually measured in
terms of economic performance. In this study, organizational
performance is pulled out separately into environmental and
economic performance, and thus, makes the research results more
accurate.
Fifth, previous studies (Han et al., 1998; Hurley and Hult,
1998; Slater and Narver, 1994) claimed that there is a missing
link between market orientation and organizational
performance, and therefore, warrants the testing of mediating
variables. Hence, this study contributes to the extant literature
by identifying the mediating role of GSCM capability between
GMO and firm performance.
 Green market orientation
Elaine Quintana Borazon, Yi-Chun Huang and Jen-Ming Liu
Finally, this study uses two important theoretical
perspectives, namely, NRBV and DCV, integrating these two
perspectives to provide a more comprehensive concept for
explaining how a firm transcends from having a static capability
to a dynamic capability (Crittenden et al., 2011; Eisenhardt and
Martin, 2000; Naidoo, 2010; Teece, 2007; Wilden et al.,
2019). This study, therefore, highlights the role of GMO as a
marketing strategy to enable GSCM capability and then
enhance organizational performance.
5.3 Practical implications
Our study provides several key suggestions to leaders and
managers with practical solutions on how to effectively perform
GMO and GSCM capability and then improve the company’s
performance. First, we measure GMO using green customer
orientation, green competitor orientation and green cross-
functional coordination. Our results show that GMO can
enhance a firm’s GSCM capability. This finding suggests that
firms should properly identify and realize customer needs and
demands for environment-friendly products (Dabrowski et al.,
2019; Sok and O’Cass, 2015), gather, monitor and analyze
strategies of their competitors (Berrett and Slack, 2001) and
emphasize cross-functional collaborations (Gölgeci and
Kuivalainen, 2019; Chan et al., 2012a; Mariadoss et al., 2016).
These activities all help shape the firm to embody an
environmentally conscientious culture. A firm can robustly
discover and advance environment-related competencies,
products and services and allow GMO to develop as a rare,
valuable and inimitable firm-level resource (Li et al., 2018b;
Lin et al., 2020b).
Second, we measure GSCM capability in terms of green
environment management capability, green information system
capability, green manufacturing capability and green suppliers’
capability. We suggest that leaders and managers should have
the capability to assimilate, shape and restructure internal and
external competencies to respond to the fast-changing business
environment to cultivate dynamic capabilities (Teece et al.,
1997; Teece, 2007).
Third, we also found that GMO positively affects
organizational (environmental and economic) performance.
This finding can convince leaders and managers to adopt
GMO, which play a critical role in “corporate greening” and in
developing and promoting environmental services and
products to attain superior performance (Daddi et al., 2021;
Fraj et al., 2013; Hart, 1995; Lin et al., 2020b).
Fourth, the results of this study reveal that GSCM
capability improves environmental and economic
performance. This study has conceptualized GSCM
capability as a dynamic capability. Therefore, the finding
provides leaders and managers how to build dynamic
capability through GSCM capability to enhance
competitive advantage. Fifth, the findings of this research
show that GMO indirectly impacts organizational
performance, i.e. environmental and economic
performance. From a medium-term perspective, firms
should incorporate pollution prevention, product
stewardship and sustainable development in their
production processes, from raw material sourcing to the
end-of-life stage of the product. With the rise of
environmental awareness and international environmental
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Journal of Business & Industrial Marketing
Volume 37 · Number 7 · 2022 · 1475–1496
protection policies, firms should improve their GSCM
capabilities, which will enhance organizational
performance and maintain a competitive advantage amid
environmental issues. From a long-term perspective, firms
should consider a strategic direction toward a green supply
chain and should pay attention to market consumer
demand and to technological research and development or
future trends that will enhance their GSCM capability and
organizational performance. Big data can also be tapped to
acquire market knowledge and adapt the new information.
Finally, this study found that GSCM capability mediates
the relationship between GMO and organizational
performance. Most of Taiwan’s electrical and electronics
manufacturers operate as original equipment
manufacturers and original design manufacturers (Chen
et al., 2012). In fact, these enterprises play an important
role in the global market, as their products have a
significant market share (Wu et al., 2012; Huang and Wu,
2010). In recent years, environmental awareness has
increased and countries have started focusing on
environmental issues. To pursue sustainable development,
advanced countries such as European countries have announced
relevant environmental protection laws and regulations, requiring
raw materials used in products to comply with environmental
regulations and that products meet the environmentally-friendly
design requirements (European Commission, 2019). Therefore,
we suggest that these firms implement green customer orientation,
green competitor orientation and green cross-functional
coordination to enhance firms’ GSCM capability, i.e. green
environment management capability, green information system
capability, green manufacturing capability and green suppliers’
capability to sense, seize and transform firm’s green opportunities
and resources to capture superior firm performance.
5.4 Limitations and future research
This study has some limitations that must be considered by
future studies. First, this research is based on the
enterprises listed in the Taiwan Electrical and Electronic
Industry Association Directory and the enterprises with a
capital of more than 10 million were the target objects.
Therefore, enterprises with a capital of NT$10m or less
were eliminated. Also, the results of this study are for the
electrical and electronics industry in Taiwan. Therefore,
the results may not apply to other industries and other
regions. Second, this study is only for Taiwan’s electrical
and electronics industry. Future studies can explore the
relevance of GMO, GSCM capability and organizational
performance in other industries. Third, this study is only
based on the questionnaire survey method. Future studies
can include in-depth interviews with several case
companies in Taiwan’s electrical and electronics industry,
which may help better understand the actual situation of
enterprises on the issue of GSCM. Fourth, longitudinal
research may be done that should attempt to duplicate this
study to examine the dynamics of the relationship
established in the theoretical model. Fifth, from the
variable point of view, we only examined GSCM capability
as a mediator between GMO and organizational
performance relationships without exploring the possible
moderating effect of environmental conditions. In addition,
 Green market orientation
Elaine Quintana Borazon, Yi-Chun Huang and Jen-Ming Liu
other organizational issues, such as supply chain learning
(Flint et al., 2008), collaborative commitment (Cuerva et al.,
2014), supply chain agility (Gligor et al., 2016) and green
supply chain relationship quality (Lin et al., 2020b) may also
likely have effects in the conceptual model. Future research
should explore the influences of these variables on GSCM
capability and sustainable performance relationships.
Finally, the relevant research is still nascent about
sustainable supply chain management. We recommend that
future researchers explore the issues of sustainable supply
chain management (Ansari and Kant, 2017; Seuring and
Müller, 2008).
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 Green market orientation
Elaine Quintana Borazon, Yi-Chun Huang and Jen-Ming Liu
Appendix
Green market orientation

Your company’s goal is based on customer green
satisfaction.

Your company will pay close attention to and evaluate the
enthusiasm for serving green customers.

Your company’s competitive advantage is based on the
understanding of customers’ green needs.

Your company’s business strategy is formulated with the
goal of increasing customer green value.

Your company frequently measures customer green
satisfaction.

Your company pays great attention to after-sales service.

Sales staff in your company will share the green
information of competitors.

Your company will quickly respond to competitors’ green
actions.

The senior executives of your company often discuss the
green advantages and disadvantages of competitors.

When you have the opportunity to have a competitive
advantage, you can target green customers.

The senior executives of each department of your
company will visit customers regularly.

Green information about customers in your company is
unobstructed throughout the company.

The integration of various departments in your company
is to meet the needs of the green target market.

Your company’s supervisor can recognize the contribution
of employees to green customer value.

All business departments of your company will share
green resources together.

Green supply chain management capability.

Your company’s senior executives make a commitment to
green supply chain management.

Your company’s mid-level supervisor supports green
supply chain management.

Your company promotes cross-departmental cooperation
to improve environmental protection.

Your company promotes comprehensive quality
environmental management.

Your company implements environmental protection
commitments and environmental audit plans.

Your company has obtained ISO 14001 certification.

Your company promotes an environmental management
system.

Your company uses a green information system to reduce
transportation costs.

Your company uses a green information system to support
teamwork and video conferencing with employees around
the world to reduce air travel.

Your company uses a green information system to track
environmental protection information (such as toxic
substances, energy usage, water consumption and air
pollution).
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Volume 37 · Number 7 · 2022 · 1475–1496

Your company uses a green information system to
monitor the output of smoke and waste.

Your company uses a green information system to provide
information to encourage customers to choose green
production.

Your company uses a green information system to
improve the CEO’s decision-making on important
sustainability issues.

Your company uses a green information system to reduce
energy consumption.

Your company uses a green information system to support
the production and distribution of renewable energy.

Your company uses a green information system to limit
the emission of carbides and other substances.

Your company uses green information system to confirm
the role of information system in energy policy.

Your company puts eco-labels on the products you supply.

Your company cooperates with suppliers for environmental
protection purposes.

Your company conducts environmental audits on the
internal management of suppliers.

Your company will require suppliers to promote ISO
14001 certification.

Your company will conduct a pro-environmental
evaluation of sub-tier suppliers.

Your company provides design specifications to suppliers,
including environmental protection requirements for
purchased materials.

Your company cooperates with customers to promote
environmentally-friendly design.

Your company cooperates with customers to promote
cleaner production.

Your company cooperates with customers to promote
green packaging.

Your company works with customers to use less energy
during product transportation.

Your company’s product design can reduce material/
energy consumption.

You encourage the reuse of materials or parts in the design
of your company’s products.

The design of your company’s products can reduce the
use of toxic materials.
Environmental performance

Your company can improve water conservation performance
after adopting green supply chain management.

Your company can improve energy conservation performance
after adopting green supply chain management.

Your company can improve the performance of raw material
use after adopting green supply chain management.

Your company can improve the performance of water
pollution prevention after adopting green supply chain
management.

Your company can improve waste management performance
after adopting green supply chain management.
 Green market orientation Journal of Business & Industrial Marketing
Elaine Quintana Borazon, Yi-Chun Huang and Jen-Ming Liu Volume 37 · Number 7 · 2022 · 1475–1496

Your company can improve the performance of toxic
Your company can increase operating cash flow after
waste management after adopting green supply chain adopting green supply chain management.
management.
Your company can increase the return on investment after

Your company can improve the performance of air pollution adopting green supply chain management.
prevention after adopting green supply chain management.
Your company can increase market share after adopting

Your company can reduce greenhouse gas emissions or use green supply chain management.
performance after adopting green supply chain management.
Your company can increase profits after adopting green

Economic performance. supply chain management.

Your company can increase sales growth after adopting
green supply chain management. Corresponding author

Your company can increase sales profitability after Yi-Chun Huang can be contacted at: peterhun@nkust.edu.
adopting green supply chain management. tw

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