Green procurement, stakeholder satisfaction and operational performance

• Pages: 1054-1077
• DOI: https://doi.org/10.1108/IJLM-12-2015-0234
• Published date: 13 November 2017
• Date: 13 November 2017
• Author: Hua Song,Kangkang Yu,Songbo Zhang
• Subject Matter: Management science & operations,Logistics

Green procurement, stakeholder

satisfaction and operational

performance

Hua Song

School of Business, Remin University of China, Beijing, China

Kangkang Yu

School of Agricultural Economics and Rural Development,

Renmin University of China, Beijing, China, and

Songbo Zhang

College of Business Administration, School of Business,

Capital University of Economics and Business, Beijing, China

Abstract

Purpose –Based on natural-resource-based view (NRBV), the purpose of this paper is to clarify the

dimensions of green procurement and the mechanisms involved in the relationship between green

procurement and firm performance.

Design/methodology/approach –Secondary data were to measure all the variables in 206 Chinese

A-share companies’annual reports, social responsibility reports, environmental reports, and sustainability

reports, which were published by Guotai Junan Securities Co., Ltd and Wind Information Co., Ltd.

Findings –The resultsindicate that although both product-based and process-based green procurementhave

a positive effect on firm performance, these Chinese companies focus on the impact of product-based green

procurement on theiroperational efficiency as well as the moderatingrole played by stakeholder satisfaction.

Originality/value –Although studies on green procurement have increased in recent years, issues such as

how to measure green purchasing behaviors and how green procurement affects firms’operational and

financial performance are still unexplored. Based on previous literature, two dimensions have been defined

for green procurement in this study to develop corresponding measurements, namely, product-based green

procurement and process-based green procurement. Besides, this study considers operational efficiency as the

mediator and stakeholder satisfaction as the moderator when constructing a new conceptual model to

illustrate the relationship between green procurement and firm performance.

Keywords Stakeholders, Operational performance, Green procurement, Natural-resource-based view

Paper type Research paper

Introduction

As the starting point of reducing environmental pollution, green procurement is a critical process

for management over green supply chain (Chin et al., 2015). Green procurement is defined as a

series of activities with environmental concerns to ensure that the products or raw materials

purchased would not have a negative effect on the environment; such as resource waste

reduction, cyclical utilization of resources, recycling of resources, replacement of raw materials

and so on (Carter and Carter, 1998; Min and Galle, 2001; Zsidisin and Siferd, 2001). By reducing

the cost of energy input, controlling the pollution and avoiding remedy, green procurement could

enhance the efficiency of resource utilization and operation, which in turn, would improve firms’

financial performance. Many companies have integrated environmental standards into their

purchasing policies and processes to implement green procurement; however, most of them have

The International Journal of

Logistics Management

Vol. 28 No. 4, 2017

pp. 1054-1077

© Emerald PublishingLimited

0957-4093

DOI 10.1108/IJLM-12-2015-0234

Received 18 December 2015

Revised 7 June 2016

6 October 2016

24 October 2016

Accepted 24 October 2016

The current issue and full text archive of this journal is available on Emerald Insight at:

www.emeraldinsight.com/0957-4093.htm

The authors acknowledge that the research underlying this paper was supported by the National

Natural Science Foundation of China (Nos 71272155; 71232011; 71302159; 71672189) and the

Fundamental Research Funds for the Central Universities, and the Research Funds of Renmin

University of China (Nos 11XNI002; 14XNK009).

1054

IJLM

28,4

neither adopted a systematic method to deal with the performance outcomes of green

procurement nor connected green procurement with their general strategy.

More literatures on green procurement focus on the definition of green procurement

(e.g. Carter and Carter, 1998), the motivation and pressures to engage in green procurement

(e.g. Bloemhof-Ruwaard et al., 1995), the effect of firms’resources and capabilities on green

procurement (e.g.Bowen et al., 2006; Green et al., 1996; Green et al., 2012),and the relationship

between green procurement and firm performance, where there are many inconsistencies.

Most studies indicate that green procurement could improve the firm’s performance

(e.g. Zsidisin and Hendrick, 1998; Carter et al., 2000), but only a few suggest that the effect is

negative or insignificant. For example, Zhu and Sarkis (2004) classify that management

practices on green supply chain produce both positive economic performance

(e.g. decreasing of cost for materials purchasing) and negative economic performance

(e.g. increasing of costs for purchasing environment-friendly materials). Similarly, Liu and

Zhao (2008) investigate the effect of green procurement in Chinese manufacturing industry

and find that the practices of green procurement have positive effects on almost all of the

performance outcomes and only two factors are excluded.

The reasons for the inconsistent results could be summarized as follows. First, there are

several dimensions of green procurement, so their effects on firm performance may be different

(e.g. Liu and Zhao, 2008). Second, previous studies have only investigated the effect of green

procurement on firms’economic performance, but these effects may not be direct, and may be

mediated by some specific performance outcomes like operational performance (e.g. Jeffers, 2010;

Green et al., 2012). Third, as members of a social network, companies would be influenced by all

kinds of stakeholders, and each stakeholder may play a distinctive role on green procurement

and performance. Many researchers have investigated stakeholders’effect on green

procurement (e.g. Henriques and Sadorsky, 1996; Sharma and Henriques, 2005; Elijido-Ten

and Louise, 2010). They suggest that stakeholders can exert an important impact on green

procurement, which can improve the firm’s performance, but only a few of recent studies have

explored the contingent role played by stakeholders (e.g. Wong et al., 2012; Khor et al., 2016). By

revisiting Hart’s natural-resource-based view (NRBV), Hart and Dowell (2011) emphasize that

the greatest potential for future research lies in continuing to identify the contingencies that

affect the environmental-financial performance relationship.

Based on NRBV, this study provides recent studies on green procurement with

supplementary contents in three ways.First, using content analysis, thisstudy distinguishes

two dimensions of green procurement: product-based green procurement, obtaining and

processing green materials based on a specific capability based on the present strategic

resources of the firm; process-based green procurement, related to the management of green

supply processes by using a dynamic capability to integrate, build and reconfigure internal

and external competences. Second, this study takes into account not only the general

performance but also the specific performance outcomes of green procurement and argues

that operational efficiency as the rate of using resources mediates the effect of green

procurement on firm performance. Third, in order to explain the inconsistent results of the

relationship between green procurement and its performance outcomes, this study further

brings in the contingentfactors based on stakeholder theory. It includes the relationship with

both reciprocators who tend to use justice method and self-regarding stakeholders who focus

on their own payoffs. Bothoffer external resources to facilitateor obstruct the effect of green

procurement. The whole theoretical framework was tested by secondary data in China.

Literature review and theoretical hypothesis

Resource-based view and NRBV

RBV has become a critical theoretical foundation used to link supply chain management and

organizational performance (Vachon and Klassen, 2008). The key proposition of RBV is that

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Green

procurement