An Empirical Investigation of the Determinants of Adoption of Green
Procurement for Successful Green Supply Chain Management
Mohammad Asif Salam1
1
School of Management, Assumption University, Bangkok, Thailand
(mbamas@yahoo.com)
Abstract – This study investigates the green
procurement adopted by Thai electronic companies.
The relationship between green procurement adoption
and product performance, purchase price, the
organization’s environmental concerns, trading
partners, and health and safety issues, is studied.
Companies in the electronic industry and holding ISO
14001 certification in Thailand before December 2004
were sampled for the empirical study. The data were
then analyzed using statistical package for the social
sciences, to verify the hypothetical construction of the
study. The results indicate that the Original
Equipment Manufacturing (OEM) and Original
Designing and Manufacturing (ODM) companies in
Thailand’s electronic industry have adopted green
procurement practices in response to the current wave
of global environmental concern.
Key Words – Green supply chain, Environmental
performance, Green procurement, and Thailand.
I. INTRODUCTION
With increasing awareness of environmental
protection worldwide, the green trend towards conserving
the Earth’s resources and protecting the environment is
overwhelming, exerting pressure on corporations in
Thailand. The pressure accompanying globalization has
prompted enterprises to improve their environmental
performance (Zhu and Sarkis 2006). Consequently,
corporations have shown growing concern for the
environment. Increasing environmental concern has
gradually become part of the overall institutional culture
and, in turn, has helped to re-focus the strategies of
corporations.
Global warming, reductions in air quality, pollution
of waterways and widespread loss of biodiversity are but
a few examples of the types of environmental impact that
can be attributed to the coordinated activity of
organizations in a supply chain. Much of this arises from
manufacturing organizations that continue to produce
large amounts of unnecessary waste or emissions rather
than investing in better technologies or practices to
prevent its generation at the source (Klassen, 2000; King
and Lenox, 2002).
The “green” component to supply chain management
involves addressing the influence of supply chain
management on the natural environment. Motivated by an
978-1-4244-2330-9/08/$25.00 ©2008 IEEE
environmentally-conscious mindset, it can also stem from
a competitive motive within organizations (Hervani,
Helms, and Sarkis 2005).
This study investigates the determinants of green
procurement adoption for successful Green Supply Chain
Management by the electrical and electronics industry in
Thailand, which is dominated by OEM (original
equipment manufacturing) and ODM (original designing
and manufacturing) companies. The prime objective of
this study is to understand the determinants of green
procurement adoption by Thai electronic companies.
II. LITERATURE REVIEW
Description of Green Procurement Practices
Purchasers can improve the environmental
performance of products and services by expressing
environmental preferences through so called “green
procurement”. Carter, et al. (1998) defined environmental
purchasing as consisting of involvement in activities that
include the reduction, reuse and recycling of materials in
the process of purchasing. Procurement or purchasing
decisions will have an impact on the green supply chain
through the purchase of materials that are either
recyclable or reusable, or have already been recycled
(Sarkis, 2003).
Green Procurement is a solution for environmentally
concerned and economically conservative business. It is a
concept of acquiring a selection of products and services
that minimizes environmental impact. It requires a
company or organization to carry out an assessment of the
environmental consequences of a product at all the
various stages of its lifecycle. This means considering the
costs of securing raw materials, and manufacturing,
transporting, storing, handling, using and disposing of the
product. "Green" products reduce waste, improve energy
efficiency, limit toxic by-products, contain recycled
content or are reusable.
With today’s application of green procurement:
• Electronics industries comply with lead free (WEEE)
and Restriction of Hazardous Substances (RoHS) to
minimize the hazardous or toxic in electronic parts.
• Furniture manufacturing industries change their
strategy to comply with green concern in the use of
water-based finishes as an alternative to solvent-
based ones.
• Toy manufacturers strictly control and follow ISO
standards to limit the toxicity in toy components after
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 Proceedings of the 2008 IEEE ICMIT
news that large quantities of imported toys from
China were banned form the US.
• Food industries used packaging made of natural
materials, which is easier to discard or recycle.
Practicing green procurement demonstrates an
organization's commitment to considering and minimizing
the environmental consequences of its activities. Bowen
et al. (2001) defined green supply as the buying
organization’s intent to improve the environmental
performance of purchased input and/or of the suppliers
that provide them. As such, green supply includes a wide
variety of activities including cooperation between
organizations to minimize the logistical impact of the
material flows or information gathering regarding the
purchased products’ characteristics. Others have proposed
definitions more focused on the purchasing function,
suggesting that green supply activities consist of the
involvement of the purchasing function in facilitating
internally-driven environmental activities such as
recycling, reuse and source reduction (Carter and Carter,
1998; Min and Galle, 2001; Zsidisin and Siferd, 2001).
The practice of extending production goals from
customers to their suppliers as a means to improve overall
performance in a supply chain has been a growing field of
research for the past 15 years (Lamming, 1993; Krause et
al., 2000; Liker and Choi, 2004). “Green-supply,” is a
potentially effective mechanism for supply chain
managers to improve the organization’s record on
corporate social responsibility, minimize risks to their
reputation, reduce waste and increase flexibility in
response to new environmental regulations (Green et al.,
1998; Bowen et al., 2001a; Melnyk et al., 2003).
Benefits of Green Procurement Include:
- Natural Conservation: Green products are
generally produced in a manner that consumes less natural
resources and energy or uses them more sustainably from
the process of acquiring raw materials, processing and
manufacturing parts, transporting, use, and final disposal.
- Waste reduction: Green products are generally
designed with the intention of reducing the amount of
waste created. For example, they may contain recycled
material or use less packaging, and the supplier may
operate a 'take-back' programme.
- Cost saving: Green products consist of natural
materials, which can be recycled, reused and also are
easily disposed of. So an organization can achieve lower
waste disposal costs, waste treatment costs and energy
costs. In addition, green products generally require fewer
resources to manufacture and operate, so savings can be
made on energy, water, fuel and other natural resources.
- Decrease hazardous or toxic level: Green products
produce lower levels of hazardous and toxic materials in
the environment.
To reduce the environmental impact of the waste of
electrical and electronic equipment (WEEE), the EU
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implemented the waste electrical and electronic
equipment (WEEE) directive in August 2005.
The literature on Green Supply Chain
Management has been growing as organizations and
researchers begin to realize that the management of
environmental programmes and operations do not end at
the boundaries of the organization. Overall, research in
corporate environmental management and its operational
relationships has been growing in recent years with a
number of papers outlining these relationships.
Customer-supplier interactions and environmental
performance
Programmes developed by business to “green”
supplier activities or include environmental performance
requirements in supply guidelines are increasingly evident
in practice. Such initiatives are broadly referred to as
either green-supply or green-supply-chain in both the
academic and practitioner literature. These have largely
included activities with suppliers such as:
• Programmes to reduce or eliminate materials used in
manufacturing processes or products;
• Programmes focusing on the environmental
compliance status and practices of supplier operations;
• Joint development of new materials, processes or other
solutions to environmental issues (Sarkis, 2003; Green
et al., 2000).
In the earlier work of Lamming and Hampson (1996),
customer firms that engaged in collaborative dialogue
with suppliers were better able to understand the
environmental impact of their supply chains. Florida
(1996) looked at customer-supplier relationships that were
already characterized by improvement or learning
activities: “. . . environmental improvements flow from
ongoing joint efforts to improve productivity, eliminate
defects and reduce costs, rather than from direct offers to
transfer pollution prevention technology or
organizational strategies designed expressly to eliminate
toxins or prevent pollution” (Florida, 1996, p. 81).
III. CONCEPTUAL FRAMEWORK
The study reported in this paper analyzed the
relationship between Green Supply Chain Management
practices and factors such as environmental performance,
financial performance and external stakeholders.
The independent variables included in the model were
Product Performance, Purchase Price, the Organization’s
Environmental Consideration, and Trading Partners. The
relationship of each of the independent variables on the
dependent variable, Green Procurement adoption was
examined. For each relationship, there is an assumed
hypothesis, indicating that there is a positive relationship
between each independent variable and the dependent
variable.
Chien and Shih (2007) explained that environmental
performance is defined as the environmental impact that
the corporation’s activity has on the natural milieu.
Sharma and Vredenburg (1998) argued that
 Proceedings of the 2008 IEEE ICMIT
environmental performance indicators consists of OPI
(operative performance indicators) and MPI (management
performance indicators): OPI are relate mainly to
consumption of materials, energy management, waste and
emission production, and evaluation of real environmental
aspects of organizations whereas MPI mainly concern the
administration’s efforts, measures, and contribution to the
overall environmental management of the organization
(Papadopoulos and Giama, 2007).
Product
Performance
H Environmental Issues has a positive relationship with
Purchasing
Price
Adoption
H of Green
Procureme
nt
Organization’s
Environmental
H relationship may generate a positive pressure toward
Consideration
H
Trading
Partners
Figure 7: Conceptual Framework
OPI are considered to be part of the desired product
performance, whereas MPI are classified as part of the
organization’s commitment to environmental issues.
Adoption of Green Procurement can produce less waste
and use more recycled material, thereby using energy,
water and by-products in a more efficient way (Tsoulfas
and Pappis, 2006). Hence,
Hypothesis 1: Product Performance has a positive
relationship with Green Procurement Adoption.
Adoption of Green Procurement can have a positive
effect on a corporation’s purchasing costs. This can cut
the cost of materials purchasing and energy consumption,
reduce the cost of waste treatment and discharge, and
avoid fines in the case of environmental accidents (Zhu
and Sarkis, 2004). A sustainable approach can lead to
internal cost saving, open new markets and find beneficial
uses for waste (Tsoulfas and Pappis, 2006). Financial
performance is defined here as cost reduction, market
share growth and profit increase. Environmental
engagement has a positive effect on financial performance
(for example, growth in profits, sales and market share)
(Fuentes-Fuentes, et al., 2004). Hence,
Hypothesis 2: Purchasing Cost has a positive
relationship with Green Procurement Adoption.
There is a consensus in the literature that internal
environmental management is a key to improving the
performance of an enterprise (Carter et al., 1998). It is
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well known that senior managers’ support is necessary
and often a key driver for successful adoption and
implementation of most innovations, technology,
programmes and activities (Hamel and Prahalad, 1989).
To ensure environmental excellence, top management
must be totally committed (Zsidisin and Siferd, 2001;
Rice, 2003). Carter et al. (1998) concluded that support
from mid-level managers is also a key to successful
implementation of EMS practices. Bowen et al. (2001)
used middle managers to find a positive relationships
between middle managers’ perceptions of corporate
environmental pro-activity and environmental
management. Hence,
Hypothesis 3: An Organization’s Consideration of
Green Procurement Adoption.
A recent body of academic research supports the
theory that the customer supplier or supplier-supplier
Green Procurement Adoption (Klassen and Vachon,
2003; Zhu and Sarkis, 2004; Rao and Holt, 2005).
Communicating goals of sustainability or environmental
performance through the supply relationship has resulted
in, for example, collaborative waste reduction,
environmentally sound innovation, cost-effective and
environmentally beneficial solutions to production
problems, and more rapid development and uptake of
environmental technologies. There is growing empirical
support for the role of the supply relationship in Green
Procurement Adoption.
Hall (2000, 2001) extended Florida’s (1996) work by
finding that a collaborative customer-supplier relationship
often led to Green Procurement Adoption in both the
customer and the supplier firm.
Higher levels of customer and supplier interaction are
likely to generate higher levels of Green Procurement
Adoption in the organization. Zsidisin and Hendrick
(1998) identified key factors for environmental
purchasing such as providing design specifications to
suppliers that include environmental requirements for
purchased items, cooperation with suppliers for
environmental objectives, environmental audit of
supplier’s internal management and suppliers’ ISO14001
certification. Hence,
Hypothesis 4: Trading partners have a positive
relationship with Green Procurement Adoption.
IV. METHODOLOGY
Research design
This research used both primary and secondary data.
Secondary data is derived from existing research,
journals, case studies, and articles on the internet.
Secondary data was used to understand what Green
Procurement is, its applications in companies, and its
benefits. The secondary data provided the idea of the
 Proceedings of the 2008 IEEE ICMIT

framework to support the collection of primary data. electronic industry. The targeted companies were taken
Primary data was collected using questionnaires. from the list of Benchmark Electronics (Thailand)
suppliers and customer directory as well as those that
Sampling were ISO 14001 certified before the end of December
Primary data collection requires proper 2004. A total of 150 questionnaires were sent out, and 137
sampling. Since the focus of the study is the Electronic valid responses were returned, so the valid response rate
Industry, the sample was drawn from electronic was 90%.
companies in Thailand that were ISO 14000 certified.
These companies reported they had already adopted V. ANALYSIS
Green Procurement practices. The sample includes
companies that export to overseas markets and/or provide This paper present two types of research findings,
raw materials or parts to manufacturing companies, which Descriptive Analysis and Inferential Analysis. The
then produce parts and finished products for the EU Descriptive Analysis shows results as means and standard
countries and the U.S.A. deviation. Multiple Regression is used in Inferential
Questionnaire development Analysis to test whether the five independent variables
The data used in this research consist of questionnaire can predict Green Procurement Adoption.
responses from customers and suppliers in the Thai
electrical and electronic companies that have a profound Descriptive Statistics
impact on the environment. The questions were answered Cronbach’s Alpha was used to test the reliability of
based on a five-point Likert-type scale (e.g. 1=least the scale items. All of the measurement scales met the
important, 2=less important, 3=important, 4=more scale reliability criteria suggested by Nunnally (1978).
important, 5=most important). Questionnaire items are According to Cronbach (1951) if a value of the reliability
listed in Table1. estimate is 0.70 or over, it can be assumed that the
The questionnaire focused on product performance, instrument is reliable. Table 1 shows the Descriptive
purchase price, the organization’s environmental Statistics including Cronbach Alpha, means and standard
engagement and trading partners. Survey samples were deviations for each variable.
selected randomly within the Thai electrical and
TABLE 1
Summary of means and standard deviation of the scale items
Product Performance (0.702)a Meanb S.D.
Green procurement enables products to meet required performance with international standards. 4.09 0.716
Green procurement complicates the product performance measurement processes. 3.72 0.802
Design of products for reduced consumption of material/energy. 4.39 0.941
Design of products for reuse, recycling, recovery of material, component parts. 3.98 0.958
Design of products to avoid or reduce use of hazardous products and/or their manufacturing process. 4.14 0.806
Purchase Price (0.704)a Meanc S.D.
Green procurement causes higher cost of finished products due to R&D cost to reduce negative environmental impact. 4.08 0.795
Green procurement reduces waste cost due to the quality development of products and manufacturing process. 3.99 0.649
Green procurement brings higher purchasing cost but sales increase. 4.01 0.938
Green procurement makes purchasing cost of raw materials higher but other costs are lower. 3.97 0.813
Higher purchasing costs of raw materials impact Green procurement policy of the company. 4.1 0.843
Organization's Environmental Concern (0.714)a Meanb S.D.
Commitment of Green Supply Chain Management from senior managers 4.06 0.879
Support for Green Supply Chain Management from mid-level managers 3.81 1.103
ISO 14001 certification 4.37 0.87
Environmental management systems exist 4.39 0.646
Make a concerted effort to make every employee understand the importance of environmental management 4.42 0.703
Trading Partners (0.720)a Meanb S.D.
Mutual understanding on Green Supply Chain Management between supplier and company. 4.46 0.728
Mutual commitment on Green Supply Chain Management between supplier and company. 4.28 0.848
Capability to achieve mutual objective on Green Supply Chain Management. 4.1 1.009
Suppliers' ISO14000 certification. 4.28 0.795
Environmental audit of suppliers' internal management. 4.36 0.715
a
Construct reliability (Cronbach's Alpha) shown in parentheses, b From 5 point scale (1 = Least Important and 5 = Most Important), c From 5 point scale
(1 = Strongly Disagree and 5 = Strongly Agree)
Inferential Analysis Procurement Adoption for successful Green Supply Chain
From the research hypotheses described in the Management. Multiple Regression was used as a tool to
previous section, it was assumed that all four independent determine the level of this relationship (table 2 and 3).
variables had a positive relationship with Green

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TABLE 2
Multiple Regression Model Summary(b)
Durbin
Adjusted Std. Error of -
R R Square R Square the Estimate Watson
.855(a) .732 .723 .082 1.468
a Predictors: (Constant), Trading Partners, Purchase Price, Product Performance, Organization's
Environmental Commitment. b Dependent Variable: Green Procurement

TABLE 3
Multiple Regression ANOVA(b)
Sum of Mean
Squares df Square F Sig.
Regression 2.346 4 .587 86.628 .000(a)
Residual .860 127 .007
Total 3.206 131
a Predictors: (Constant), Trading Partners, Purchase Price, Product Performance, Organization's Environmental
Commitment. b Dependent Variable: Green Procurement

TABLE 4
Multiple Regression Coefficients(a)
Unstandardized Standardized
Coefficients Coefficients Collinearity Statistics
Std.
B Error Beta t Sig. Tolerance VIF
(Constant) 1.908 .090 21.233 .000
Product Performance .095 .013 .351 7.506 .000 .965 1.036
Purchase Price .107 .013 .380 8.194 .000 .983 1.018
Organization's
Environmental .093 .013 .348 7.260 .000 .920 1.087
Commitment
Trading Partners .106 .013 .388 8.037 .000 .908 1.102
a Dependent Variable: Green Procurement

From the result of Multiple Regression in table 4, all

the independent variables have a statistically significant
(with a probability of 0.00 which is less than 0.05 desired
to accept the hypothesis) affect on Green Procurement
Adoption for successful Green Supply Chain
Management. Therefore, the null hypothesis is rejected
and it is accepted that there is a relationship between each
independent variable and Green Procurement Adoption.
The Correlation Coefficient (R) = 0.855 determines the
strength of relationship. This means that the five
variables have a strong positive relationship with the
dependent variables. Correlation Determination (R
Squared) = 0.732, which means that about 73.2% of the
variance in the dependent variable, which is Green
Procurement Adoption, can be appropriately explained by
these independent variables which are Product
Performance, Purchase Price, the Organization’s
Environmental Commitment and Trading Partners.
VI. FINDINGS
management since they can lead to increased
business, improved business performance, and further
enhancement of their credibility with outside parties.
From the study, it was found that in response to
the external pressures and globalization, Thai electronics
companies are required to comply with the concept of
green procurement concept. The four independent
variables can predict the tendency towards green
procurement adoption for successful Green Supply Chain
Management, meaning that whether the management do
or do not adopt green procurement practices depends on
product performance, purchase price, organizational
environmental commitment and trading partners.
In relation to conducting successful green
procurement, the collaboration of suppliers is essential.
Thai electronics companies perceive that successful
environmental performance requires suppliers to
understand green procurement and environmental
policies.
An environmental response is an important
management resource. Thai firms must integrate
environmental initiatives into their corporate
This paper provides a basis for understanding more
about green procurement and indicates that Thai
companies, especially in the electronics industry, realize
the importance of green procurement in order to build

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