Effects of HRM practices,lean production practices and lean duration on performance

Abstract

The purpose of this research is to investigate the structural relationships between HRM practices, lean production practices, operational performance and firm performance of manufacturing firms that have implemented lean production. The data were collected from the firms operating in Sri Lanka, which fulfilled the selection criteria set for the study. Statistical techniques were used to test the hypothesized relationships. It was found that lean production practices and operational performance mediate the relationship between HRM practices and firm performance; lean duration moderates the relationship between HRM practices and lean production practices in such a way that the longer the duration, the greater would be the adoption of lean production practices. The essential contribution of the findings lie in presenting empirical data valuable for the advancement of research in HRM as well as for making decisions on people management when implementing advanced manufacturing technologies.     

Green human resource management and the enablers of green organisational culture: Enhancing a firm's environmental performance for sustainable development

Scholars have shown that green human resource management (GHRM) practices enhance a firm's environmental performance. However, existing studies fail to explain how GHRM initiatives can enable a green organisational culture or how such a culture affects the environmental performance and sustainable development of the firm. This paper examines the relationship between GHRM practices, the enablers of green organisational culture, and a firm's environmental performance. We conduct a large‐scale survey of 204 employees at Chinese manufacturing firms. Our findings suggest that proenvironmental HRM practices including hiring, training, appraisal, and incentivisation support the development of the enablers of green organisational culture. We suggest the key enablers of green organisational culture include leadership emphasis, message credibility, peer involvement, and employee empowerment. Our paper contributes to HRM theory in terms of originality and utility of research by explaining that the enablers of green organisational culture positively mediate the relationship between GHRM practices and environmental performance. Managers are provided with a detailed understanding of the GHRM practices needed to enable an organisational culture of environmentally aware employees. Finally, we address potential implications of this work for teaching green organisational culture to future generations of responsible managers.     

Corporate environmental performance,environmental management and firm risk

Using a sample of 1,632 U.K. firm‐year observations from 2002 to 2013, this paper investigates the impact of multidimensional corporate environmental performance (CEP) on firm risk. Considering two dimensions of CEP, namely environmental management performance (EMP) and environmental operational performance (EOP), we find that EMP serves as an effective mechanism in reducing firm risk, and such an effect is mainly driven by the manufacturing sector. Meanwhile, there is no clear association between EOP and firm risk. However, our findings highlight a moderating effect of EOP on the relationship between negative EMP and firm risk. This provides new insights into the value of multidimensional CEP and suggests that the complex relationship between outcome‐ and process‐based environmental performance is important for understanding the real effects of CEP on firm risk. Our results have important implications for managerial decision‐making in strategy and risk management, as well as for policymaking in environmental regulation.     

Green process innovation and operational performance: The role of proactive environment strategy,technological capabilities,and organizational learning

With increase in the focus on environmental protection, firms are integrating sustainability issues in process and product innovations. Firms can contribute toward sustainability and also improve operational performance through green innovation practices. However, the adoption of green innovation practices depends on the proactivity of top managers toward environment management. In this paper, we study the relationships between proactive environment strategy, green process innovation (GPRI), and operational performance. Further, we examine the mediating effect of dynamic capabilities (DCs) (technological capabilities and organizational learning) between GPRI and operational performance. The proposed framework is tested by data collected from the Indian manufacturing industries and using partial least squares (PLS) technique. The findings demonstrate proactive environment strategy as an important antecedent for GPRI practices. Second, technological capabilities and organizational learning mediate between GPRI and operational performance. The results of the study are useful for managers in the manufacturing firms, who are interested to implement GPRI practices or who are in the early stage of implementing the GPRI practices.     

Environmental performance and bank lending: Evidence from unlisted firms

Growing public concerns about sustainability and adopting environmentally responsible practices increase risks as well as opportunities for firms and banks. It is unclear whether being environmentally responsible matters for unlisted firms, which are significant contributors to the degradation of the environment but which are not under strict scrutiny like public listed firms. Using a sample of 3915 firms from developing economies, we investigate whether the superior environmental performance of unlisted firms leads them to better loan conditions. After controlling for endogeneity and sample selection bias, we find that firms with better environmental performance received approximately 6.4% higher loans (as a ratio of total sales) and that this effect is more prominent in small and medium firms. This finding supports an information asymmetry view of agency costs. Our results, however, show that environmental performance does not affect loan duration and collateral requirement, indicating no spillover economic effect of corporate environmental performance on loan conditions. This partially supports a new perspective of legitimacy theory in relation to the ‘greenwash strategy’. Overall, our study shows that strategically engaged environmental activities that are integrated with core business objectives represent an important business strategy for firms to enhance credit access.     

Environmental Orientation and Economic Performance: a Quasi‐experimental Study of Small Swedish Firms

This paper investigates the relationship between the environmental orientation and economic performance of small firms. We conduct a quantitative analysis on a sample of 299 environmentally oriented and all other small (2–49 employees) Swedish firms. We estimate the effect of environmental orientation on profit margin to examine how environmentally oriented firms perform in relation to non‐environmentally oriented firms. To do this, we employ a quasi‐experimental design in which we create a control group of non‐environmentally oriented firms that are very similar to their environmentally oriented counterparts. We use two measures of environmental orientation: (i) a third‐party classification, and (ii) a self‐assessment of environmental differentiation. The findings show a negative effect of environmental orientation on economic performance. Our contribution to the literature is in using a novel and more rigorous way to measure the relationship between environmental orientation and economic performance and providing implicit support for the existence of a causal link from economic performance to environmental orientation. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

Uncovering the Value of Green Advertising for Environmental Management Practices

This paper extends previous environmental management research by building and empirically testing a model of the contingency effects of green advertising on the relationships between environmental management practices in terms of environmentally conscious manufacturing and product stewardship, environmental reputation and financial performance. We examine the value of green advertising in sharing and publicizing information about organizational achievements in environmental preservation in a business‐to business context with the Taiwanese electronics manufacturing industry. The theoretical propositions are largely confirmed by structural path analyses of survey responses collected from 122 Taiwanese electronics manufacturers. Green advertising delivers financial benefits only for those manufacturers that do not have an established environmental reputation. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

Market orientation practices enhancing corporate environmental performance via knowledge creation: Does environmental management system implementation matter?

The academic literature on environmental management has provided extensive insights into the determinants of corporate environmental performance. However, few empirical studies have explored whether and how three core components of corporate market orientation (i.e., customer orientation, competitor orientation, and interfunctional coordination) affect environmental performance. Building on institutional theory and the absorptive capacity perspective, this study investigates the relationships among market orientation, knowledge creation, and environmental performance, as well as the moderating effects of environmental management system implementation. On the basis of survey data from 237 Chinese manufacturing firms, we used hierarchical multiple regression analyses to test the hypotheses. The findings indicate that knowledge creation completely mediates the influence of competitor orientation on environmental performance and partially mediates the influence of customer orientation and interfunctional coordination on environmental performance. In addition, environmental management system implementation positively moderates the relationship between knowledge exchange and environmental performance.     

Assessing the impact of green supply chain practices on firm performance in the Korean manufacturing industry

As a growing number of customers tend to view corporate social responsibility (CSR) as a key purchase decision criterion, demands for CSR including environmental sustainability have accelerated in today's business world. To meet such demands, many firms consider embracing environment-friendly business practices. However, many firms are still hesitant to implement those practices due to sceptical views about their real managerial benefits. Although the previous literature confirms the positive link between a firm's commitment to environmental sustainability and its performance, the varying degree of impact of different kinds of environment-friendly supply chain practices on the firm's operational performance is still unknown. To fill the void left by prior research, this paper aims to classify various types of green supply chain management (GSCM) practices and then assess the impact of each of these distinct types on the firm's operational performances (especially manufacturing and marketing performance). Also, this paper examines how the firm's organisational profiles such as firm size affect the particular firm's choice of GSCM practices. Our experimental results reveal that the chosen type of GSCM practices influences the firm's performance differently.     

Environmental considerations within manufacturing strategy: an international study

This paper examines the relative importance of environmental management in four key areas of manufacturing strategy: competitive priorities, action programmes, performance improvement and improvement goals. Its overall position in manufacturing strategy is measured through the creation of an original index using data from the 2001 International Manufacturing Strategy Survey (IMSS). Results show that in a minority of firms environmental management is positively positioned. The index's relationships with indicators of innovation and performance in manufacturing are examined. Some significant results include capabilities in the areas of strategy formalization, strategic fit and ISO14001 certification. While results are specific to the IMSS context, implications may be drawn for resource‐based view of the firm research on the application of resources and capabilities. An implication for policy makers is that the development of capabilities for strategy formalization and implementation should be incorporated into environmental policy. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment.     

Doing more and doing better are two different entities: Different patterns of family control and environmental performance

Family firms bear two types of agency costs, including type I and type II agency problems, in corporate environmental practices: (1) Outside executives at family firms hesitate to engage in environmental strategies, which can lead to drops in profits; (2) Controlling families employ opportunistically environmental management to achieve their interests. We argue that a primary cause for the agency problems lies on ineffective internal corporate governance at family firms, which can cause loss of managerial (or power) balance between outside executives and family executives. Our findings show that family firms with ownership and strategic control (FSC), which family executives and outside executives monitor and constrain each other, can achieve the highest environmental performance. Moreover, external controls, including product market competition and provincial environmental regulations, substitute effective internal control of FSC. The environmental performance premium of FSC is more prevalent when the production market competition is lower. Family firms with ownership, operational, and strategic control (FOSC) can achieve higher environmental performance within a province with more stringent environmental regulations.     

The impact of supply chain quality management practices and knowledge transfer on organisational performance: an empirical investigation from China

In recent years, both quality management practices (QMP) and knowledge transfer (KT) have been studied extensively from inter-organisational and intra-organisational perspectives. However, to the best of our knowledge, the interaction between QMP and KT in a supply chain and their joint effects on organisational performance have not been addressed fully. The purpose of this paper is to provide insights for improving performance by mapping the relationship between supply chain quality management practices (SCQMP) and KT. A survey of 157 Chinese manufacturing firms is used to test a conceptual model that proposes relationship among SCQMP, KT and organisational performance (including operational performance and innovation performance). Structural equation modelling reveals that internal QMP have significantly positive effect on internal KT, while QMP at supply chain level have highly positive effect on cross-organisational KT. Furthermore, the results show that both internal KT and cross-organisational KT can promote operational and innovation performance, although the influence from internal KT is much more significant than cross-organisational KT for Chinese firms. The findings contribute to theory as well as practice by increasing understanding of how to improve the operational and innovation performance through enhancing SCQMP and KT.     

A Fresh Approach to Context Influence,Development and Performance in Environmental Management

Respect for the environment has rapidly gained importance in the context of firms, regardless of their pollution levels. Most of the existing research has related to the most polluting sectors and has been limited to the effect that the adoption of cleaner practices has on performance, primarily in terms of operations, financial performance and competitiveness. This paper expands the research towards a more complete picture of environmental management by examining context, development and performance to understand how other factors can influence the development of cleaner practices. In addition, we focus our research on the service sector. In our analysis, we differentiated between the affiliation and size of the studied companies to better understand their specificities. Based on a sample of 374 restaurants, the results show the importance of the influence of institutions and the limited influence of competitors in encouraging firms to adopt a strategic, clean approach, especially for the smallest firms. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

Environmental issue management: towards a multi‐level theory of environmental management competence

The continuity and profitability of business firms are under constant threat from environmental issues – forthcoming developments in the environmental domain or involving environmental stakeholders that are likely to have an important impact on the ability of the enterprise to meet its objectives. Managers must forge responses to such issues, but must they respond in an ad hoc fashion to every issue or can they develop more coherent environmental management competences? Empirical evidence was collected from a case study of the environmental issue management practices of Unilever, one of the largest food and personal care companies in the world. This company's approach to dealing with the issue of genetically modified ingredients reveals that issue managers face a complex level‐of‐analysis problem when confronting environmental issues: how to translate individual‐level knowledge into organization‐level outcomes? The theory developed here suggests that once firms learn how to span this chasm, they are able not only to address discrete environmental issues, but also to build competitive environmental advantages through the development of integrative organizational competences. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment.     

Environmental Management Systems and Local Community Perceptions: the Case of Petrochemical Complexes Located in Ports

Most oil refineries and factories producing basic chemical products are located in port areas, with the result that industrial complexes potentially have a strong environmental impact on their area of influence. These externalities result in a loss of welfare for citizens residing in neighbouring areas. In a context of sustainable development, companies must integrate concerns about the natural environment in their business strategy. External stakeholders, as residents, find it difficult to visualize the actions firms take to reduce their environmental impact, and the adoption of voluntary certified environmental management systems (EMSs) acts as a signal indicating the adequate environmental behaviour of these companies. These certifications enable companies to achieve the social legitimacy they need for long‐term survival and competitiveness. In the context of a petrochemical industrial complex located in the port of Castellón (Spain), this paper primarily discusses whether such certifications – which act as signals of firms’ desirable environmental conduct – translate into higher trust in firms and lower risk perception by residents. Contrary to what might be expected, despite the widespread use by companies of voluntary and certified EMSs, the research findings confirm a relatively high citizen perception of risk regarding the industrial complex and a low trust in companies. On the other hand, the findings also show a low trust in the public institutions responsible for authorizing and monitoring firms’ activities and for enforcing possible sanctions in non‐compliance cases. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

Toward a Theory of Activist-Driven Responsible Innovation: How Activists Pressure Firms to Adopt More Responsible Practices

Accounts of stakeholder influence on corporate social responsibility (CSR), situated in the CSR domain, have recognized that activists mitigate information asymmetries between firms and consumers. However, depictions of activists as information disseminators do not explain how they perform their quintessential role – pressuring resistant firms to engage in responsible innovation that emphasizes the creation of socioenvironmental value. Drawing from social movement theory that identifies claims as the instrument of such pressure, we examine four activist organizations’ use of claims across six campaigns to drive firms to adopt more socially and environmentally responsible practices, a form of responsible innovation. Our core contribution is an empirically grounded theory of activist-driven responsible innovation (ARI) that proposes how activists use claims to drive firms to engage in responsible innovation, as well as how features of the two sides may shape this outcome. Our ARI theory primarily enriches accounts of stakeholder influence on corporate social responsibility in the CSR domain and, in doing so, secondarily enriches accounts of the influence of activists’ claims on firms in the social movement domain. These contributions also speak to the resolution of grand challenges, a core interest of the special issue.     

Understanding variation in the relationship between environmental management practices and firm performance across studies: A meta‐analytic review

The relationship between environmental management practices and firm performance has continuously received much attention in academic research. As existing literature on the link of the two constructs is characterized by heterogeneous research characteristics and mixed empirical evidence, one interesting question arises: Do research characteristics affect the magnitude and direction of the relationship between environmental management practices and firm performance? Amassing a database of 92 studies, 199 effect sizes, and 72,258 firms, we examine this question by conducting a meta‐analysis. The characteristics investigated in this study include item number of performance measures, year of data collection, industry type, economic development, and Hofstede's five cultural dimensions. A meta‐regression reveals that environmental management practices are positively associated with firm performance and that the degree of this association depends on these contexts. Specifically, the environmental management practices–performance relationship increases with year of data collection, is stronger with multiple item measures, and is higher for firms in developed countries and in cultures characterized by high power distance, low individualism, low uncertainty avoidance, and low long‐term orientation.     

Operations strategy in an emerging economy: the case of the Ghanaian manufacturing industry

Operations strategy and its development have received a lot of attention in the operations management literature. However, as noted by Ward et al. (1995), an understanding of the factors that influence operations strategy development has not been widely studied. Further, how managers of firms in underdeveloped countries develop operations strategy has yet to receive any significant attention among researchers. This paper takes a look at the development of operations strategy in an underdeveloped economy, Ghana. Specifically, the paper examines the relationships between the business environment and the operations strategy choices made by firms in Ghana. The paper seeks to understand the influence that specific business environmental factors have on the operations strategy choices of low cost, quality, flexibility, and delivery dependability.A survey of manufacturing firms was carried out in 1998. The respondents (production managers in those firms) were asked to indicate the extent to which business costs, labor availability, competitive hostility, and environmental dynamism were of concern to them. They were also asked to indicate their extent of emphasis on the operations strategy choices of quality, cost, flexibility and delivery dependability. This paper presents the result of the analysis of the relationships between the environmental factors and the operations strategy choices. The data indicate that, among firms in Ghana, the two strongest factors that influence the degree of emphasis placed on operations strategy choices are perceived business costs and competitive hostility. Results are presented for both large and small firms, and for firms that are completely locally owned as well as for joint venture firms.