The key role of institution pressure on green supply chain practice and the firm's performance

Abstract

Purpose: This study was conducted to investigate the influence of isomorphism institutional theory on green supply chain management (GSCM) and firm performance by using the structural equation model (SEM) to explain the driving factors of reducing the impact of environmental processes on the firm.

Design/methodology/approach: Structural equation model (SEM) to explain the driving factors of reducing the impact of environmental processes on the firm.

Findings: Isomorphism institutional factors showed a statistically significant positive effect on GSCM practices. Moreover, GSCM practices showed a statistically significant positive effect on firm performance. Under the literature review, customer pressure and top management support are primary factors to achieve GSCM practices and potential to establish firm performance.

Research limitations/implications: First, the common hypothesizes do not provide insight into all the relationships that warrant additional inspection. Second, Thailand manufacturers have experiences pressures from foreign customers and competitors but they have opportunities to learn from them to better improvement GSCM practices.

Practical implications: Results may highlight pressure for greening and which more efforts are needed for GSCM practices. GSCM practices generally require more effort due to need for collaborating with customer and competitor. Thailand manufacturers are increasingly confronted with isomorphism institutional pressure to implement GSCM practices.

Social implications: It is useful the Thailand government promotes GSCM by creating an awareness of the benefits. GSCM can help to alleviate the question of the followers about implementing GSCM and decrease their risk association with the environmental adoption.

Originality/value: Research creates clarity of the relationship between isomorphism institutional pressures, top management support, and performance in Thailand, which is a developing country with environmental investment concerns that affect profits from the operations of the firm.