Environmental Engineering Reference
In-Depth Information
(2005) as to whether firm performance is related
with the capabilities of corporate social respon-
sibility and commitment to the natural environ-
ment. They argued that these capabilities are rare,
valuable, and difficult to imitate. Thus, successful
implementation should lead to higher profit and
market share. Aragon-Correa (2003) noted that
companies need to recognize and evaluate par-
ticular organizational and human resources, in
addition to particular organizational capabilities
that will create environmental advantages.
Also, sustainable development will extend
beyond the firm with collaboration skills (such
as technology cooperation) among the public
and private companies. Russo and Fouts (1997)
provided an empirical test of resource-based view
theory and applied to environmental social respon-
sibility using firm-level data on environmental
performance and profits. The authors found that
companies reporting superior environmental per-
formance also had superior financial performance,
a result that can be interpreted as being consistent
with the resource-based view theory. Accord-
ing to Seuring and Muller (2008), green supply
chain has to be integrated from raw materials to
final customers to ensure the quality of products
and the performance of processes. Seuring and
Muller (2008) defines sustainable supply chain
management as
to focus all of the energies of their segments on
the same goals and strategies since they share
same mission, hierarchy, and quality standards
(Robinson and Casalino, 1996). Harrigan (1983)
states that vertical integration assures irreplicable
differentiation advantages such as superior service
levels, coordination of raw material qualities, and
customized development of special products. Ad-
ditionally, Carter and Rogers (2008) concluded
in their literature review that the product of SFCs
may be more difficult to imitate.
Chan (2005) proposes a model that illustrates
the antecedents and results of natural-resource-
based-view approach by conducting a survey to
foreign invested companies located in China. His
analysis demonstrates; firstly, resource-based-
view approach leads company to develop higher
organizational capabilities, secondly, companies
that have these capabilities are more likely to
adopt sustainability-focused strategies, and con-
sequently, the adoption of sustainability-focused
strategies leads to achieve higher environmental
and financial performance.
Transaction Cost Economics
During the early 1970s, the economists began
to promote the theory of transaction cost eco-
nomics from the earlier work of 1991 Economy
Nobel Prize winner Ronald H. Coase. Especially,
Oliver Williamson fully developed this theory
with his remarkable contributions over the last
four decades and he was also awarded with the
Economy Nobel Prize
2
in 2009. The seminal stud-
ies that argue transaction cost economics include
Calabresi (1968), Williamson (1975), Goldberg
(1976), Klein et al. (1978), and Dahlman (1979).
Transaction cost analysis is defined by Williamson
(1985) as follows:
“the management of material, information and
capital flows as well as cooperation among com-
panies along the supply chain while taking goals
from all three dimensions of sustainable develop-
ment, i.e., economic, environmental and social,
into account which are derived from customer and
stakeholder requirements.” (p. 1700)
Similarly, vertically-integrated systems are
advantageous compared to the contractual rela-
tions and market bargaining because of their
potential for coordinated adaptation to changes
in external factors. Organization structure at
“Transaction cost analysis supplants the usual
preoccupation with technology and steady-state
production (or distribution) expenses with an
