The complementarity of green supply chain management practices and the impact on environmental performance

Abstract

Although the importance of integrating different Green Supply Chain Management (GSCM) activities has been highlighted in the literature, the potential interdependencies between these practices and their performance impacts have not been investigated. The purpose of this study is to examine the collective impact of internal and external GSCM practices on two aspects of environmental performance: environmental impact and environmental cost savings. GSCM is proposed as a collective competency, combining four distinct, but interrelated, sets of practices: environmental management systems, eco design, source reduction and external environmental practices. Using survey data from 138 Omani manufacturing firms and Structural Equation Modelling, we find strong empirical support for the complementarity of GSCM practices. We find a strong positive relationship between the level of collective GSCM competency and the environmental impact achieved. Our findings support the belief that complementarities between GSCM practices lead to better performance. Managers should therefore focus on implementing bundles of GSCM practices rather than searching for individual best practices. We find an indirect, mediated influence on environmental cost savings, which is consistent with previous results in other emerging market contexts.

Keywords: Complementarity theory; Environmental performance; Green supply chain management; Structural equation modelling; Survey research.