Environmental Engineering Reference
In-Depth Information
control at the source through green procurement
(Min and Galle, 1997). More importantly, well-
designed environmental standards can increase
producers' incentives to adopt green product and
technological innovation (Shrivastava 1995). As
a matter of fact, some of the leading international
organisations have developed their own environ-
ment management systems and criteria to moti-
vate their suppliers. For example, Sony's “Green
Partner Standards” (Sony Corporation, 2009),
and HP's supply chain social and environmental
responsibility (Hewlett-Packard, 2008). Avery
(1995)'s study found that in 1993 only 40% of
1000 buyers of office equipment and supplies in
the UK were taking part in environmental initia-
tives within their organisation, but the figure had
soared to 80% in 1995.
It is therefore becoming very important for
organisations to adopt green innovation and imple-
ment Green Supply Chain Management (GSCM)
within their value chain (Steger, 1993). Rao and
Holt (2005) conducted empirical research and
found a positive relationship between GSCM
practices and competitiveness and economic
performance. In general, organisations can further
reduce production cost and increase their eco-
nomic efficiency through such initiatives (Porter,
1991). Furthermore, improvement in corporate
environmental performance and compliance
with environmental regulations can contribute to
a company's competitiveness (Bacallen, 2000).
The implementation of GSCM has been found
to contribute towards corporate competitiveness
and environmental performance by a number
of authors (e.g. Rao, 2002; Tukker et al., 2001;
Cairncross, 1992; Hart, 1995; Schmidheiny, 1992;
Shrivastava, 1995; Poter and Linde, 1995; Vermu-
len, 2002). GSCM can be broadly classified into
external and internal environment management
(Rao, 2002). In terms of external environment
management, it is related to the greening of sup-
pliers (Bowen et al., 2001; Lloyd, 1994; Rao,
2002; Hamner, 2006; Makower, 1994; Green et
environment management can be reflected by
green innovation, which can also be divided
broadly into product and process innovations
(Klassen and Whybank, 1999; Porter and Van der
Linde, 1995; Hart, 1995; Schmidheiny, 1992).
Green innovation has not been addressed well in
the green supply chain management literature in
spite of the fact that it can create a competitive
advantage for firms (Porter and Van der Linde,
1995; Chen et al., 2006). In addition, not many
studies have investigated the relationship between
the greening of suppliers, green innovation,
environmental performance and competitive
advantage. The objective of this article is thus to
propose a conceptual model, based on a review
of relevant literature and performance indicators
on the factors discussed above, to identify areas
for future research.
The rest of this paper is organised as follows.
The next section reviews relevant literature on
the factors discussed above, namely, the capa-
bility of greening the supplier, the capability of
green innovation, competitive advantage and
environmental performance of firms. Moreover,
the indicators of the above factors are reviewed as
well. Then, a conceptual framework is proposed
which aims to study the relationships between
these factors. Finally, the conceptual model and
literature review are used to identify where future
research is needed in this area.
BACKGROUND: A REVIEW
OF KEY FACTORS
Green Supply Chain
Management (GSCM)
Recently, industrial practitioners have recognised
the concept of GSCM as selecting suitable suppli-
ers, who are qualified to meet the environmental
directives or a company's internal green design
standards, for enhancing their environmental per-
