Sustainable Production Practices and Determinant Factors of Green Supply Chain Management of Chinese Companies

pedigree strategy and the surround Bus. Strat. Env. 21, 116 (2012) Published online 16 February 2011 in Wiley Online program library (wileyonlinelibrary. com) inside 10. century2/bse. 705 Sustainable labor Practices and determinative Factors of unripened anyow for ambit vigilance of Chinese Companies Xianbing Liu,1* Jie Yang,2 Sixiao Qu,2 Leina Wang,2 Tomohiro Shishime1 and Cunkuan Bao2 1 Kansai look for Centre, Institute for Global environmental Strategies (IGES), Japan 2 College of environmental Science and Engineering, Tongji University, mainland chinaABSTRACT This report explores the discolour run image charge (GSCM) of companies based in the Yangtze River Delta, China. The companies boilers suit GSCM invest direct (LGSCM) is measured by using the data from clxv valid respondents in a questionnaire quite a little get wordducted during April and May 2009. The relationships surrounded by LGSCM and the classi? ed deciding(prenominal) computes argon analyzed. I t is indicated that Chinese companies atomic number 18 still at a anterior form of GSCM exerts. Their environmental focal point in cooperation with away members of the tote up r for for each(prenominal)(prenominal) one one is real marginal.A fel e goldbrickomic crisisships LGSCM is signi? affectationly and positively associated with the extraneous pressures from regulatory, domestic clients and task competitors. As an intrinsic portion, a smart sets indata fix uptingion capa city greatly larns LGSCM. We similarly con? rm that the inborn factors function as sinkmediate variables of out-of-door pressures in in? uencing a lodges GSCM. A bon tons environmental postulatement capacities will be firmly deepen by frequent interior genteelness of employees to increase its affair in GSCM practices.right of first publication 2011 whoremaster Wiley &038 Sons, Ltd and ERP milieu. Received 5 July 2010 revised 14 December 2010 recognized 16 December 2010 Keywo rds sustainable production discolour add together d piercinging string caution practices antigenic antigenic determining(prenominal) factors China Introduction environment, in the forms of pollutant generation, ecosystem disruption and depletion of mental imagerys (Fiksel, 1996). The pressures and drivers from foreign ac guilding globalization acquit pushed manufacturers in developing economies like China to mitigate their environmental public presentation (Zhu and Sarkis, 2006). milieual concerns gradually last part of the overall business culture and, in turn, help re? engineer the phylogeny strategies of corporations (Madu et al. , 2002). Corporate environmental trouble (CEM) has been moving from traditional pollution def annul and risk solicitude towards product life? cycles/second * Correspondence to Xianbing Liu, Kansai Research Centre, Institute for Global purlieual Strategies (IGES), Hitomirai Building 4F, 1? 5? 2, Wakinohama Kaigan Dori, Chuo? ku, Hyogo, 651? 0073, Japan. E? mail email& one hundred sixtyprotected or. jp Copyright 2011 keister Wiley &038 Sons, Ltd and ERP environment OUT OF every last(predicate) BUSINESS OPERATIONS, MANUFACTURING PROCESSES ARE VIEWED TO HAVE THE HIGHEST IMPACTS ON THE 2 Xianbing Liu et al. charge and industrial ecology. Recently, CEM has extended to certain boundary? spanning activities like parking areas procural, product stewardship, chase away logistics and so on (Zsidisin and Siferd, 2001 Snir, 2001 Prahinski and Kocabasoglu, 2006). These practices atomic number 18 associate to supply kitchen range steering, which requires mixed interactions between the core manufacturer and the otherwise(a) entities along the supply chain, either the upstream suppliers or downstream distributors and customers.The concept of supply chain centering for environmental protection was ? rst put forward by Drumwright (1994), which identi? ed the characteristics of those companies introducing parvenu m anufacturing ideas. Later, green supply chain anxiety (GSCM) was de? ned as a rising term by the Manufacturing Research Association at Michigan many(prenominal)ise University, USA ( eliminate? age, 1996). The fast economic growth of China has greatly relied on the extensive expansion of manufacturing industries which produce resourcefulness? intensifier but deucepenny-halfpenny goods for foreign markets.The regulatory requirements in developed economies, such as the beaten(prenominal) European Union (EU) Waste Electrical and Electronic Equipment (WEEE) Directive and the labor of Hazardous Substances (RoHS) Directive, drop forced electronics manufacturers in China to nimblely practice certain GSCM activities. The relatively elevated position of Chinese manufacturers in the global supply chain offers the possibility, and an ideal setting, to explore their actual GSCM involvements. Zhu et al. (2008) studied the rising GSCM practices at club take aim in a Chinese contex t, and con? med that GSCM is still a new concept for slightly Chinese companies as they change their environmental management from inhering efforts to the whole supply chain. In terms of antigenic determinant factors for GSCM practices, this earlier survey mainly foc employ on a companys informal issues, such as the immensity of the companys learning? oriented programs and upkeep of upper side managers. The pressures from out-of-doorly related stakeholders bear further study due to their importance to a companys environmental behavior (Zhu et al. , 2008).Subsequent studies employing both orthogonal pressures and intrinsic factors would provide a more comprehensive guessing of the relationships between GSCM practices and the determinant factors. In addition, Zhu et al. (2008) conducted their survey in the northern cities of China. Surveys of companies based in the other geographical landing fields of China would be necessary and meaningful. In enunciate to closing t he research gap described above, this penning identi? es the outdoor(a) pressures which determine the take of a companys GSCM practices while using up province factors as the intermediate variables.The Yangtze River Delta, including Shanghai and surrounding functions, is selected as the study argona mainly due to its relatively developed economy comp ard with other regions of China. The meliorate orbit of CEM provides us with the possibility of overseeing a companys GSCM practices there. Considering the complexity of GSCM practices, which whitethorn be attributed to the wide reaching of environmental activities at dissentent phases of the supply chain, this news report classi? es four categories of typical GSCM activities by come toring to the actual literatures (e. g.Sarkis, 2005). dickens come aboutics atomic number 18 mainly discussed in this paper (1) the trus devilrthy status of GSCM practices of the companies in the study argona and (b) determinant factors, e xternal and inner(a), predicting the take aim of a companys involvement in GSCM practices. Literature palingenesis Although there is no uniform de? nition for GSCM so far, basic and common understandings thrust been formed conjecturally and in practice. GSCM emphasizes the concerns for the environment along the whole supply chain and requires long? term and strategical collaborations between the supply chain members.GSCM go afters the management of the life cycle of a product, from its manufacture and consumption until the end? of? life (Nagel, 2000). GSCM practices whitethorn be separated according to the fix ups of production, dispersion and utilization, and therefrom can be categorized into sexually green manufacturing activities, green procural, eco? physical body, green retailing and green consumption by individuals (Walton et al. , 1998 Zsidisin and Hendrick, 1998 Carter et al. , 2000). Research on GSCM has been building gradually, but still remains sparse (Vachon and Klassen, 2008).GSCM studies were previously conducted by addressing the pursuit aspects general and basic issues like designing the role model for GSCM (Geoffrey et al. , 2002) go foration of GSCM strategies (Sarkis, 2003) environmental assessment of GSCM practices (Vijay et al. , 2003) relationship between a companys performance and GSCM practices (Klassen and Mclaughin, 1996) and speci? c GSCM activities like green purchasing (Min and Galle, 1997), Copyright 2011 toilette Wiley &038 Sons, Ltd and ERP surround Bus. Strat. Env. 21, 116 (2012) inside 10. 1002/bse discolor preparation stove guidance in China 3 be quality and environmental management (Sarkis, 1999), green marketing (Karna and Heiskanen, 1998), and environmental performance rating of suppliers (Hines and Johns, 2001). Cooperation among the companies on the supply chain is the key to drive them to improve the environmental compatibility of their businesses (Ken et al. , 2000). Generally, the bene? ts of col laborative practices with upstream suppliers are much broader. In contrast, collaboration with downstream customers yields mixed outcomes Vachon and Klassen, 2008). By exploring the operational performances due to green compact along the supply chain, Vachon and Klassen (2006) indicated that partnership with customers was positively related to product quality and ? exibility, whereas partnership with suppliers was associated with wear delivery operations. Thun and ruminator (2010) interviewed managers from the automotive supply attention in Germany and con? rmed the need for GSCM on the one hand but gibe problems in terms of indispensable resource on the other.Case studies of the British and Japanese food retail domain and the British aerospace industry showed that it would be easier to adopt GSCM if certain suppliers could play a leading role in a group of resembling suppliers (Jeremy, 2000). slender-arm large companies can mandate their supplies to comply with certain en vironmental initiatives, conjunctive approaches are likely to be more fruitful. Sharfman et al. (2009) suggested that inter?? rm trust, uncertainty and proactive environmental management intimately at a time affect the extent of a companys engagement in GSCM.Jeppesen and Hansen (2004) examined the conditions for environmental upgrading of third knowledge domain companies led by foreign companies. They argued that environmental upgrading on the honour chain must be understood partly as a settlement of external industry and market forces, and partly as a take of the privileged resources and competitive strategies of the companies involved. Two typical models are ground for fall in application of GSCM strategies. genius is to develop more environmentally friendly goods done cooperation like joint research.The other is to request that the suppliers satisfy heightser environmental standards, for example achieving ISO14001 certi? cation, and the limitation of speci? ed materi als in products. The construction of cooperative strategies and the evaluation of suppliers help improve the compatibilities of supply chain to the environment (Lamming, 1996). The extent of GSCM practices adopt by Chinese companies was examined by a survey of companies in several industrial areas such as power generation, petrochemicals, electric and electronics and automobiles (Zhu and Geng, 2006).It was hard for the surveyed companies to ruffle environmental issues into their business operations with suppliers and customers. Some leading companies lease do efforts in internally proactive CEM practices like pursuing ISO14001 certi? cation, but some tolerate just started to consider external GSCM activities. In China, environmental pressures are stronger for large companies than for small and ordinary? sized ones (Zhu and Geng, 2001). Automotive original equipment manufacturers (OEMs) own been required by the automobile assemblers to operate in an environmental expression since Chinese entry into the World Trade Organization (WTO) in 2001.Chinese electronic enterprises are found to be performing better in GSCM practices (Zhu and Sarkis, 2006). ontogenesis of an Analytical good example and Research Hypotheses As mentioned earlier, this study tries to expand the determinant factors of GSCM practices in China from a companys internal instructive variables, which have been explored in previous studies (e. g. Zhu et al. , 2008), to the external pressures. Different alternative theoretical viewpoints, such as stakeholder possibleness, institutional theory and the resource? based view, have been used to look at GSCM practices.As typical inter? organizational collaborations, the stakeholder theory with broad acceptance would be appropriate for discussing GSCM issues rather than intra? organizational management activities. In practice, stakeholder theory and institutional theory are rather alike(p) in grouping a companys external others, including the s timulation and output environment of the company (suppliers and product consumers), its competitive environment (companies producing similar services or products) and its regulatory environment (DiMaggio and Powell, 1983 Delmas and Toffel, 2004).In this study, we identi? ed the determinant factors of GSCM practices by referring to existing literature and developed an overall analytic framework as shown in Figure 1. The relationships between the determinant factors and a companys GSCM activities and research hypotheses are rationalizeed as follows. Copyright 2011 John Wiley &038 Sons, Ltd and ERP Environment Bus. Strat. Env. 21, 116 (2012) DOI 10. 1002/bse 4 Xianbing Liu et al. Figure 1. Overall analytic framework of this studyHypothesis a (Ha) international Pressures The importance of external factors lies in the antonymous nature of the factors behind Chinese companies adoption of GSCM practices at the early stage of environmental policy transformation. Besides the requireme nts of governmental regulations, domestic and foreign clients, competitors and next communities may exert pressures on the companies (Hall, 2000). These external pressures have conjointly prompted companies to become more aware of environmental problems and to practice certain GSCM activities (Sarkis, 1998 Her vanguardi et al. 2005). Customer expectations have become the most(prenominal) historic external pressure (Doonan et al. , 2005). To achieve sustainable solutions and business goals, the environmental properties of products and services have to satisfy customer demands (Zhu and Sarkis, 2006). Communities refer to those who are not necessarily involved in the business partnership directly but have knowledge of local companies (Nelson et al. , 1999). The community perspectives shoul be adequately flirted as they may in? uence a companys closing? aking process (Kearney, 2004). It has been indicated that communities have the ability to in? uence the complaisant reputation of a company (Henriques and Sadorsky, 1996). harmonise to Zhu and Sarkis (2006), Hall (2000) and Sarkis (1998), external pressures are believed to be important factors affecting a companys GSCM practices. This generates the ? rst combinative hypothesis of this study as Ha companies that face higher pressures from external stakeholders are more likely to adopt GSCM practices.Hypothesis b (Hb) native Factors Business strategy is not only in? uenced by external stakeholders since companies theater of operations to the analogous level of external pressure may perform otherwise (Prakash, 2000 Gunningham et al. , 2003). It is argued that companies also adopt different environmental practices due to their individual interpretations of the physical object pressures from the outside. The difference between objective and perceived pressures would lead to diverse responses from companies.Therefore, our analytical model adds two internal organizational factors, namely plump for by top man agers and a companys learning efficiency, to jointly explain a companys GSCM practices. caution support by top managers is critical for the introduction and implementation of innovations in a company, especially environmental management systems (EMSs) (Daily and Huang, 2001). Top management support can affect the victor of new initiatives by facilitating employee involvement or by promoting a heathenish shift in the company, for example. Previous research suggests that cross? unctional programs need support from senior management, and indicates that top management support is associated with the success of environmentally desirable purchasing (Carter et al. , 1998). As GSCM is a broad? based organizational endeavor, Copyright 2011 John Wiley &038 Sons, Ltd and ERP Environment Bus. Strat. Env. 21, 116 (2012) DOI 10. 1002/bse Green Supply Chain charge in China 5 it has the potency to bene? t from top management support. Meanwhile, a companys learning mental object is viewed as especially important in a resource? ased view. GSCM practices are amenable to the bene? ts derived from learning since they are military man resource? intensive and greatly rely on tacit skill development by employee involvement, team work and shared out expertise (Hart, 1995). The capacity for implementing innovative environmental approaches is usually enhanced by employee self? learning, professional information and on? the? job training. The education level of employees and the oftenness of internal environmental training are often used as proxies of a companys learning capacity.The above discussions suggest two sub? hypotheses on internal factors which may be expressed as Hb1 and Hb2 Hb1 a companys level of GSCM practices is positively associated with the support of top managers. Hb2 a companys level of GSCM practices is positively associated with the companys learning capacity. Hypothesis c (Hc) the Linkage of External and versed Factors As discussed above, the addition of internal factors jolly complements the pressures from external stakeholders in explaining the practice of GSCM.A companys internal factors may be viewed as intermediate variables to adjust the in? uences of external pressures. A company will be unlikely to implement GSCM activities if it does not have the necessary capacity, no matter what pressures it faces. This generates one more hypothesis on the relationship of external pressures and internal factors in determining a companys GSCM practices in this study, which may be documented as Hc the relationships between a companys external pressures and adoption of GSCM are intermediate by internal factors. MethodsSamples and Data Collection The data for this study were hoard by a questionnaire survey conducted in the region of the Yangtze River Delta during April and May 2009. Two small areas in the delta were selected for the survey implementation. One was Taichang, a county? level city in Jiangsu Province. Another was Kangqiao indu strial Park based in Shanghai. essential from traditional environmental policies, local environmental agencies have tried some innovative measures for improving CEM by encouraging the publics involvement against industrial pollution.With aims to reduce the compliance cost and maintain ? nancial honour, the companies there have adopted some proactive environmental practices. The better background of CEM in the study area compared with other regions of China provides the possibility for us to monitor companies GSCM activities in this study. According to the literature overview and preliminary understandings about the contextual background of the study area, a questionnaire was developed to measure companies GSCM practices, determinant factors and organizational performance.The questionnaire format consisted of four major components general information on the companies GSCM activities such as environmentally preferable procurement the phase of external pressures felt by the companie s and the evaluation of environmental and economic performances. The environmental managers were chosen as focal points in the survey to answer the questions concerning GSCM issues in their companies. Due to the large scope for GSCM activities, the environmental manager discussed matters with the purchasing manager and production manager as necessary.Over a period of approximately 2 months, the survey was conducted in two phases. In the ? rst stage, local government of? cials and seven companies were contacted in order to exam the validation and feasibility of answering the survey document. The questions are listed in a concise but accurate manner to distract misunderstanding by the respondents. The ? nalized format was sent to 210 enterprises on a name list provided by the local environmental protection bureaus Copyright 2011 John Wiley &038 Sons, Ltd and ERP Environment Bus. Strat. Env. 21, 116 (2012) DOI 10. 1002/bse 6 Xianbing Liu et al. EPBs). A total of 165 respondents were con? rmed to be useful for the synopsis, meaning a relatively high (78. 6%) valid response rate due to the coordination of local EPBs. The scattering of usable responses by industrial vault of heavens is listed in dishearten 1. As expected, the samples from the sectors of machinery manufacturing, chemicals and material and dyeing report for nearly half of the total, which are the representative industries in the study area. Operationalization of the Variables Dependent Variable The unfree variable in this study is LGSCM, a companys overall GSCM practice level.LGSCM may be represented by a series of practical activities since it is dif? cult to directly measure the degree of GSCM involvement. Twelve items of GSCM activities were identi? ed to estimation a companys overall level of GSCM practices in the current Chinese context, as listed in panel A of put over 2 and abbreviated as GA1 to GA12. This study addresses the GSCM practices as a companys proactive environmental effo rts in the manufacturing phase by excluding the end? of? pipe pollution gibe measurements and reverse logistic management of used products.Four categories of GSCM practices, represented by C1 to C4, respectively, are included internally proactive environmental activities (C1) environmentally preferable procurement (C2) environmentally sensible design (C3) and supplier managed inventories and services (C4) (Walton et al. , 1998 Carter et al. , 2000 Zsidisin and Hendrick, 1998). Achieving ISO14001 certi? cation, implementation of spic-and-span production auditing and reutilization of byproducts and other waste are chosen as internal proactive environmental activities of the companies.A companys procurement strategies have strong impacts on the upstream producers in the supply chain, e. g. by buying non? toxicant materials (Sarkis, 2003). In this study, four types of activities are de? ned as environmentally preferable procurement by the companies requiring suppliers to offer c tum bleer products, evaluating suppliers environmental performances, providing education and adept assistant to suppliers, and providing education for internal procurement staff.environmentally cognizant design primarily focuses on technological improvements of products and processes to mitigate environmental impacts. iii items of activities, namely working nearly with suppliers in product design, reducing waste in cooperation with suppliers and providing product? related environmental information for customers, are selected to assess the environmentally assured design practices of companies. The last type of GSCM practice is supplier managed inventories and services which are found in chemical industries.Certain chemical companies commissioned their inventory management to the providers of b want materials due to the higher potential risks and the management experiences of the suppliers (PPRC, 2002). Since many chemical companies are located in the study area, two items are incl uded to represent a companys GSCM activities in this aspect. One is to entrust suppliers to manage company inventories. Another is to offer inventory management services for clients. sphere of influence Paper Textile and dyeing Chemicals Plastics and rubber Metals Machinery and equipment manufacturing Electronics Automobile Printing braid Others In totalNumber of samples 5 19 24 7 5 35 6 13 3 5 43 165 parting 3. 0 11. 5 14. 6 4. 3 3. 0 21. 2 3. 6 7. 9 1. 8 3. 0 26. 1 100. 0 knock back 1. dispersion of the usable respondents by industrial sectors Copyright 2011 John Wiley &038 Sons, Ltd and ERP Environment Bus. Strat. Env. 21, 116 (2012) DOI 10. 1002/bse Green Supply Chain care in China Variable Description of the proxy 0 A GSCM activities Internal proactive Achieving ISO14001 certification (GA1) environmental Cleaner production uditing (GA2) management (C1) Reutilization of byproducts and other wastes (GA3) Require suppliers to offer cleaner products (GA4) Environmentally Eva luate environmental performances of suppliers (GA5) preferable procurement (C2) Provide education and technical assistance for suppliers (GA6) Environmental education for internal purchasing staff (GA7) Work closely with suppliers in product design (GA8) Environmentally Work with suppliers on waste minimisation (GA9) conscious Provide environmental information for products (GA10) design (C3) Supplier managed depart suppliers to manage some of the inventories (GA11) inventories (C4) Offer inventory management services for clients (GA12) 1 Valuation 2 3 4 5 7 LGSCMB determining(prenominal) factors REGULATORY DCLIENT COMPETITOR COMMUNITY FCLIENT TSUPPORT tuition genteelness Pressure of environmental regulations impressiveness of domestic clients environmental expectation Importance of competitors green strategies Pressure of complaints from contiguous communities Pressure of foreign customers environmental expectation Degree of support from companys top managers Education level o f the employees Frequency of internal environmental training External pressures Internal factors C Control variables Characteristics of the companies Companys size (LSIZ) Industrial sector belongings ( celestial sphere) Natural log of turnover control panel 2. definition and valuation of GSCM activities, the determinant factors and the controls The companies were requested to present a ? ve? oint Likert scale for each item of the 12 activities. The scales are de? ned as 1 = not considering the use at all 2 = intentning to consider 3 = considering presently 4 = partially implementing and 5 = implementing successfully. The average give for all 12 items was used to represent the companys LGSCM. In a similar way, the average score for the items of each GSCM category was used as the level of practice of that category. Independent Variables Recalling the section on Development of Analytical Framework and Research Hypotheses, the determinant factors behind companies adoption of GSCM a ctivities include external pressures and internal factors. As listed in panel B of Table 2, ? e external pressures and one- leash internal factors are classi? ed. In a similar way, a ? ve? point Likert scale was used to measure the importance, strength or degree of each factor 1 = not at all 2 = to some degree 3 = moderate 4 = relatively high 5 = very high. The score for each factor was used to estimate its relationship with LGSCM. The only exception is for FCLIENT (pressure from foreign customers). The companys merchandise ratios were used as the proxy for this variable. It is assumed that the higher a companys export ratio was, the higher the Copyright 2011 John Wiley &038 Sons, Ltd and ERP Environment Bus. Strat. Env. 21, 116 (2012) DOI 10. 1002/bse 8 Xianbing Liu et al. ressure from foreign markets that would be felt by the company. The export ratios were classi? ed into four levels in the questionnaire format with consideration of easier responses from the surveyed companies . Control Variables Two more variables are introduced into the analytical framework as the controls. One is company size and another is the industrial sector to which it belongs. The existing literature suggests that larger companies are more likely to be under public scrutiny and are expected to have a higher propensity to be involved in innovative environmental practices (Hettige et al. , 1996). Larger companies are also likely to have superior resources for environmental activities.Companies with higher environmental sensitivity are more willing to improve their environmental performances. Panel C of Table 2 lists the methods for evaluating control variables. A natural log of the turnover in 2008 was used to represent a companys size. A companys industrial sector af? liation is classi? ed into two types, with 1 referring to environmentally sensitive industries (ESI) and 0 creation non? ESIs. ESIs in China include mining, thermal power, construction materials, pulp and paper prod ucts, metallurgy, petroleum, brewing, fermentation, textiles, pharmacy, tanning and chemical industries (SEPA, 2003). The others are classi? ed as non? ESI.Results and Discussions Result for GSCM Practices of the Companies SPSS was used for the statistical analysis in this study. Cronbachs ? was calculated in order to prove the consistency reliability of the quantifys given to the items of GSCM activities. The estimated ? for all 12 items is 0. 912, which is higher than the 0. 9 that would imply a high validity of the dataset constructed. An exploratory factor analysis was performed on the 12 GSCM items to ? nd if there are different dimensions of these activities. Two factors were extracted. However, the ? rst factor accounts for 49. 9% of the unevenness in total and the second only accounts for 11. 6%.The rotated component matrix of the factor analysis is listed in Table 3. All the items relating to external GSCM practices (GA4 to GA12) are extremely associated with factor 1 . The dissolving agents for internally proactive environmental activities (GA1, GA2 and GA3) are not have since they have nearly equal loadings on both factors. The factor analysis result proves the rationality of using the average score of all the classi? ed GSCM items (LGSCM) as the dependent variable for the regression analysis in this study. Table 4 gives a statistical summary of the piles of the de? ned GSCM activities. LGSCM of the respondents achieved an average score of 3. 9, indicating that Chinese companies are still at a very preliminary stage in their GSCM items 1 GA11 GA12 GA10 GA5 GA9 GA6 GA7 GA8 GA4 GA1 GA2 GA3 0. 814 0. 803 0. 779 0. 767 0. 749 0. 747 0. 730 0. 725 0. 691 0. 578 0. 490 0. 500 Component 2 ? 0. 119 ? 0. 107 0. 273 ? 0. 271 0. 321 ? 0. 303 0. 207 0. 492 0. 622 0. 583 Table 3. Rotated component matrix of factor analysis of GSCM items Copyright 2011 John Wiley &038 Sons, Ltd and ERP Environment Bus. Strat. Env. 21, 116 (2012) DOI 10. 1002/bse Green Supply Chain direction in China 9 GSCM practices. The surveyed companies have started to implement internally proactive CEM activities to some degree (averaged at 3. 413. 93).Most of them plan to think about or are considering the environmental activities which would be jointly practiced with external actors in the supply chain. As examples, GA6 (provide education and technical assistance for suppliers) and GA8 (work closely with suppliers in product design) only obtained average scores of slight than 3. 00. Nevertheless(prenominal), slight improvement was observed in this study compared with the previous survey conducted in north China by Zhu and Sarkis (2006). This change may be attributed to the different location of the study areas. As described earlier, the region for this study has a relatively developed economy, and the companies there may be performing better on the environment than those in other areas. The surveyed companies fight down differently to the classi? d GSCM activities. Figure 2 provides details of the score distribution of GCSM activities practiced by the respondents. Many companies are implementing certain proactive Categories and items of GSCM activities Internal proactive environmental activities (C1) GA1 GA2 GA3 Environmentally preferable procurement (C2) GA4 GA5 GA6 GA7 Environmentally conscious design (C3) GA8 GA9 GA10 Supplier? managed inventories and services (C4) GA11 GA12 Overall level of GSCM practices (LGSCM) Obs. 158 159 160 160 159 160 159 160 162 153 159 159 156 157 158 158 148 Mean 3. 60 3. 41 3. 51 3. 93 3. 38 3. 84 3. 47 2. 76 3. 48 3. 32 2. 93 3. 45 3. 54 3. 11 3. 10 3. 2 3. 39 SD 1. 07 1. 49 1. 35 1. 14 1. 01 1. 16 1. 19 1. 27 1. 27 1. 04 1. 30 1. 22 1. 27 1. 23 1. 24 1. 33 0. 91 Min. 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Max. 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 Table 4. statistical summary of GSCM activities of the surveyed companies One 100% 90% 80% Two Three Four Five Ratio of the score 70% 60% 50% 40% 30% 20% 10% 0% G A1 GA2 GA3 GA4 GA5 GA6 GA7 GA8 GA9 GA10 GA11 GA12 Items of GSCM activities Figure 2. distribution of the scores of companys GSCM activities Copyright 2011 John Wiley &038 Sons, Ltd and ERP Environment Bus. Strat. Env. 21, 116 (2012) DOI 10. 1002/bse 10 Xianbing Liu et al. internal CEM practices.Nearly 70% of the surveyed companies are reusing byproducts and other generated waste to some degree. Around half of them are devising efforts to achieve ISO14001 certi? cation and are pursuing a cleaner production audit. The companies are selective about those GSCM activities requiring cooperation with external actors on the supply chain. About 70% of the respondents are asking their upstream suppliers to provide cleaner materials or products to avoid possible environmental risks. The number of companies which arrange internally environmental education for their procurement staff and work closely with their suppliers for waste minimization is also around 50%.Another item of GSCM activity practiced relatively better by the companies is to provide product? related environmental information for their clients. However, most of the companies do not supply technical assistance to their suppliers. About 65% of the companies have not taken any action concerning environmentally conscious design with their suppliers. In summary, the surveyed companies GSCM activities are obviously due to individual business needs and bene? ts from their own perspectives. GSCM is still a new concept for most Chinese companies. More time is needed for them to recognize the importance of strategic cooperation with other members of the supply chain. In? epth GSCM practices within a wider scope would be adopted if companies could unite as a group with a shared strategy on business and environmental issues. Descriptive Statistics of the Other Variables Table 5 summarizes the variables describing the determinant factors of GSCM activities. Companies gave higher scores to the pressures from external stakeholders. Among the external pressures, the regulative requirements and domestic clients environmental expectations are viewed as passing important, achieving an average score of 4. 41 and 4. 29, respectively. Keeping up with competitors in the same sector is also regarded as an important factor (averaging 4. 08). The sampled companies usually carry out internal environmental training two or cardinal times a year.The education level of employees is relatively low, believably because most of the companies are from traditionally labor? intensive industries. An average score of 2. 87 is presented for top managers support, which implies that company managers do not care much about GSCM efforts. This ? nding shows for a fact that the managers of Chinese companies do not seriously considering environmental activities other than basic compliance. Regarding the control variables indicating company characteristics, most of the samples are small and medium? sized. Large companies, wi th an annual turnover of more than 300 million Chinese yuan (CNY), only account for 7. 4% of the total.Small enterprises, which have less than 300 employees or yearly sales of less than CNY 30 million, account for 64. 2%. The remaining 28. 4% are medium? sized companies. According to the classi? cation criteria of the Chinese national environmental authority, half of the samples are categorized as ESI (49. 1%). The other half is non? ESI. Most of the respondents (71. 4%) process raw materials or produce components for downstream manufacturers. Result of the Relationship Between LGSCM and the Determinant Factors Pearson rank correlation coefficient was used to give a preliminary expression of the relationships between the overall level of GSCM practices and the determinant factors identi? ed earlier. The correlation matrix is shown in Table 6. ThisVariables and abbreviations REGULATORY DCLIENT COMPETITOR COMMUNITY FCLIENT TSUPPORT command raising Obs. 156 156 152 162 150 159 160 159 Mean 4. 41 4. 29 4. 08 3. 88 2. 46 2. 87 3. 30 4. 15 SD 0. 75 0. 86 0. 85 1. 73 1. 27 1. 35 1. 03 0. 75 Min. 1 1 1 1 1 1 1 1 Max. 5 5 5 5 4 5 5 5 External pressures Internal factors Table 5. Statistical summary of the determinant factors Copyright 2011 John Wiley &038 Sons, Ltd and ERP Environment Bus. Strat. Env. 21, 116 (2012) DOI 10. 1002/bse Green Supply Chain Management in China LGSCM LGSCM REGULATORY DCLIENT COMPETITOR COMMUNITY FCLIENT TSUPPORT EDUCATION TRAINING 1 b 0. 195 a 0. 361 a 0. 391 ? 0. 083 0. 022 0. 113 a 0. 441 a 0. 559 REG.DCLIENT COMP. COMM. FCLIENT TSUP. EDU. 11 TRAINING 1 a 0. 395 a 0. 506 0. 035 0. 041 b ? 0. 176 b 0. 197 a 0. 477 1 a 0. 538 0. 008 0. 064 ? 0. 105 b 0. 354 a 0. 447 1 a 0. 038 0. 055 ? 0. 085 a 0. 238 a 0. 395 1 ? 0. 015 a ? 0. 471 0. 037 0. 150 1 ? 0. 086 0. 073 0. 139 1 ? 0. 041 ? 0. 073 1 a 0. 421 1 Table 6. coefficient of correlation coefficients of LGSCM and the determinant factors a Correlation is signi? cant at the 0. 01 level, t wo? tailed. b Correlation is signi? cant at the 0. 05 level, one? tailed. indicates that LGSCM is signi? cantly correlated with the external pressure variables DCLIENT and COMPETITOR, and internal factors like EDUCATION and TRAINING.Standard multiple regressions were performed with LGSCM as the dependent variable and each of the determinant factors and controls as separate variables. The results are listed in Table 7. The level of multi? collinearity between the variables was tested by an inspection of the condition index and variance proportions in the SPSS collinearity diagnostics table. According to the criteria given by Tabachnick and Fidell (2001), multi? collinearity is not a problem in this analysis since each condition index is less than 30 and the variance proportions are much less than 50. The regression result in Table 7 indicates that Ha is supported in general.Among the external pressures, DCLIENT and COMPETITOR are signi? cantly and positively associated with LGSCM at P = 0. 000. This implies that domestic clients environmental preferences and competitors green strategies for differentiation are major external drivers for companies to adopt GSCM activities. One more external factor which has a slightly positive correlation with LGSCM, signi? cant at P < 0. 01, is REGULATORY. Government regulations were believed to be dominant forces for CEM in the past since a companys environmental strategies are obligate coercively via environmental sanctions (Delmas, 2002). However, this study classi? ed GSCM practices as those beyond basic environmental compliances.The governmental requirements may become a relatively minor factor for the adoption of GSCM practices. No signi? cant associations are found between the other two external pressures, COMMUNITY and FCLIENT, and LGSCM. The surveyed companies greatly valued the pressure from their neighboring communities. However, community pressure cannot account for a companys GSCM efforts, probably because the communities mainly complain about the environmentally illegal activities of companies rather than lobby for proactive efforts such as GSCM practices. The pressure from foreign clients is not potently felt by manufacturers in the current phase. Regarding the internal factors, Hb1 is not supported. The support of top managers is not found to be signi? antly associated with a companys LGSCM in this survey, which is in contrast to the result of Carter et al. (1998). Nevertheless, Hb2 is fully con? rmed. The two variables representing a companys learning capacity, education level of employees (EDUCATION) and frequency of internal environmental training (TRAINING), are signi? cantly and positively associated with LGSCM at P = 0. 000. This result is identical to that of Zhu et al. (2008), which con? rms the hypothesis that the extent of GSCM practice sedulous in by Chinese companies is positively related to the level of organizational learning capacity. Result of the Mediating Function of Internal Factors The egression result of LGSCM and the determinant factors in the previous section con? rm the causal chains existing between each of the three external pressures (REGULATORY, DCLIENT and COMPETITOR) and two internal factors (EDUCATION and TRAINING) with LGSCM. Signi? cant relationships are found between each of the three external pressures and each of the two internal factors, as shown in Table 8. The t? statistic of all the regressions is greater than 2. 00. Copyright 2011 John Wiley &038 Sons, Ltd and ERP Environment Bus. Strat. Env. 21, 116 (2012) DOI 10. 1002/bse 12 Variables entered (a) REGULATORY ? 0 REGULATORY LSIZ welkin F? value R2 (adjusted) (c) COMPETITOR ? COMPETITOR LSIZ SECTOR F? value R2 (adjusted) (e) FCLIENT ? 0 FCLIENT LSIZ SECTOR F? value R2 (adjusted) (g) EDUCATION ? 0 EDUCATION LSIZ SECTOR F? value R2 (adjusted) 0. 708 0. 374 0. 151 0. 178 1. 846 5. 721 4. 592 1. 299 18. 884 0. 294 0. 067 0. 000 0. 000 0. 196 1. 804 0. 033 0. 156 0. 253 4. 026 0. 544 3. 959 1. 573 5. 281 0. 097 0. 000 0. 588 0. 000 0. 118 0. 409 0. 356 0. 155 0. 258 0. 859 4. 224 4. 457 1. 772 13. 382 0. 226 0. 392 0. 000 0. 000 0. 079 0. 497 0. 266 0. 176 0. 293 0. 851 2. 760 4. 856 1. 960 9. 673 0. 169 0. 397 0. 007 0. 000 0. 052 Coef? cient t? statistic P? value Variables entered (b) DCLIENT ? 0 DCLIENT LSIZ SECTOR F? alue R2 (adjusted) (d) COMMUNITY ? 0 COMMUNITY LSIZ SECTOR F? value R2 (adjusted) (f) TSUPPORT ? 0 TSUPPORT LSIZ SECTOR F? value R2 (adjusted) (h) TRAINING ? 0 TRAINING LSIZ SECTOR F? value R2 (adjusted) ? 0. 310 0. 597 0. 128 0. 126 1. 803 ? 0. 021 0. 167 0. 278 1. 507 0. 041 0. 177 0. 260 0. 439 0. 342 0. 147 0. 322 Coef? cient Xianbing Liu et al. t? statistic P? value 0. 896 3. 890 4. 172 2. 210 12. 583 0. 214 0. 372 0. 000 0. 000 0. 029 3. 117 0. 840 4. 452 1. 680 7. 112 0. 123 0. 002 0. 402 0. 000 0. 095 4. 695 ? 0. 341 4. 018 1. 765 6. 188 0. 109 0. 000 0. 734 0. 000 0. 080 ?0. 726 7. 001 4. 031 0. 955 26. 249 0. 370 0. 469 0. 0 00 0. 000 0. 342 Table 7. degeneration results for LGSCM and each of the determinant factors According to Baron and Kenny (1986), a third condition has to be met in order to con? rm the mediating function of internal factors as hypothesized in this study. The signi? cant relations between the external pressures and LGSCM shall be strongly reduced if the internal factors are controlled. We tested Hc by reiterate the OLS regressions in three steps. In step 1, LGSCM is individually regressed against each of the three external pressures which have signi? cant relations with LGSCM. In step 2, each of the three pressures and EDUCATION, as an internal factor, jointly enter into the regressions as self-governing variables.In a similar way, step 3 is carried out by substitute the variable of EDUCATION by TRAINING. The regression results are listed in Table 9. The robustness of the result was checked by doing the regressions with the control variables added for each case. The corresponding regression results are described in Table 10. There are no obvious changes in the signi? cances of the regression results listed in Tables 9 and 10. The intermediation function of internal factors does occur and Hc is supported. In the case of introducing the internal factors into regressions, the signi? cances of external pressures to LGSCM are all reduced signi? cantly or even removed completely.This implies that the low level of GSCM involvement of Chinese companies could be fundamentally attributed to a lack of the necessary internal capacities for GSCM practices. The strong pressures Copyright 2011 John Wiley &038 Sons, Ltd and ERP Environment Bus. Strat. Env. 21, 116 (2012) DOI 10. 1002/bse Green Supply Chain Management in China Variables entered Coef? cient t? statistic P? value Coef? cient t? statistic 13 P? value (a) EDUCATION as dependent variable ? 0 REGULATORY F? value R2 (adjusted) ? 0 DCLIENT F? value R2 (adjusted) ? 0 COMPETITOR F? value R2 (adjusted) 2. 131 0. 268 4. 409 2. 479 6. 145 0. 033 3. 806 4. 671 21. 819 . 0120 5. 280 2. 982 8. 894 0. 050 0. 000 0. 014 (b) TRAINING as dependent variable 2. 014 0. 83 6. 196 6. 667 44. 445 0. 222 8. 689 6. 144 37. 748 0. 195 9. 751 5. 216 27. 211 0. 150 0. 000 0. 000 1. 503 0. 421 0. 000 0. 000 2. 451 0. 396 0. 000 0. 000 2. one hundred twenty-five 0. 288 0. 000 0. 003 2. 727 0. 350 0. 000 0. 000 Table 8. Regression results of internal factors and external pressures with significances to LGSCM Variable entered Coef? cient quantity 1 t? statistic P? value Coef? cient whole tone 2 t? statistic P? value Coef? cient Step 3 t? statistic P? value (a) REGULATORY as the individual variable ? 0 REGULATORY EDUCATION TRAINING F? value R2 (adjusted) 2. 331 0. 241 5. 126 2. 367 0. 000 0. 019 1. 502 0. 146 0. 375 3. 358 1. 540 5. 338 17. 416 0. 89 0. 001 0. 126 0. 000 0. 747 8. 783E? 02 0. 728 5. 601 0. 031 1. 699 ? 0. 895 7. 580 32. 931 0. 312 0. 092 0. 372 0. 000 (b) DCLIENT as the independent variable ? 0 DCL IENT EDUCATION TRAINING F? value R2 (adjusted) 1. 637 0. 407 4. 237 4. 619 0. 000 0. 000 1. 077 0. 286 0325 2. 813 3. 319 4. 634 22. 731 0. 236 0. 006 0. 001 0. 000 9. 139E? 02 0. 174 0. 612 21. 331 0. 124 0. 220 2. 206 6. 622 35. 351 0. 328 0. 826 0. 045 0. 000 (c) COMPETITOR as the independent variable ? 0 COMPETITOR EDUCATION TRAINING F? value R2 (adjusted) 1. 675 0. 423 4. 776 5. 031 0. 000 0. 000 0. 978 0. 319 0. 338 2. 787 4. 010 5. 101 27. 949 0. 279 0. 006 0. 000 0. 00 0. 100 0. 226 0. 570 25. 314 0. 147 0. 251 2. 811 6. 342 36. 265 0. 337 0. 802 0. 006 0. 000 Table 9. Regression results of LGSCM for mediating function test Copyright 2011 John Wiley &038 Sons, Ltd and ERP Environment Bus. Strat. Env. 21, 116 (2012) DOI 10. 1002/bse 14 Variable entered Coef? cient Step 1 t? statistic P? value Coef? cient Step 2 t? statistic P? value Coef? cient Xianbing Liu et al. Step 3 t? statistic P? value (a) REGULATORY as the independent variable ? 0 REGULATORY EDUCATION TRAINING LSIZ S ECTOR F? value R2 (adjusted) 0. 497 0. 266 0. 851 2. 760 0. 397 0. 007 ? 0. 197 0. 194 0. 357 0. 162 0. 190 ? 0. 355 2. 177 5. 270 4. 99 1. 375 15. 139 0. 310 0. 723 0. 031 0. 000 0. 000 0. 172 ? 0. 220 ? 0. 029 0. 611 0. 125 0. 128 ? 0. 419 ? 0. 294 6. 159 3. 811 0. 944 19. 319 0. 368 0. 676 0. 769 0. 000 0. 000 0. 347 0. 176 0. 293 4. 856 1. 960 9. 673 0. 169 0. 000 0. 052 (b) DCLIENT as the independent variable ? 0 DCLIENT EDUCATION TRAINING LSIZ SECTOR F? value R2 (adjusted) 0. 439 0. 342 0. 896 3. 890 0. 372 0. 000 0. 008 0. 212 0. 322 0. 144 0. 214 0. 018 2. 453 4. 573 4. 373 1. 552 15. 598 0. 317 0. 986 0. 016 0. 000 0. 000 0. 123 ? 0. 638 0. 137 0. 540 0. 124 0. 153 ? 1. 343 1. 592 5. 842 3. 883 1. 139 20. 317 0. 380 0. 182 0. 114 0. 000 0. 000 0. 257 0. 147 0. 322 4. 72 2. 210 12. 583 0. 214 0. 000 0. 029 (c) COMPETITOR as the independent variable ? 0 COMPETITOR EDUCATION TRAINING LSIZ SECTOR F? value R2 (adjusted) 0. 409 0. 356 0. 859 4. 224 0. 392 0. 000 ? 0. 237 0. 275 0 . 329 0. 148 0. 168 ? 0. 511 3. 472 4. 911 4. 592 1. 236 17. 453 0. 345 0. 610 0. 001 0. 000 0. 000 0. 219 ? 0. 742 0. 183 0. 524 0. 127 0. 124 ? 1. 589 2. 268 5. 753 3. 994 0. 928 21. 233 0. 393 0. 115 0. 025 0. 000 0. 000 0. 355 0. 155 0. 258 4. 457 1. 772 13. 382 0. 226 0. 000 0. 079 Table 10. Regression results for robustness test of the mediating function from external stakeholders do not necessarily lead to GSCM in reality. More speci? ally, REGULATORY is completely mediated by the two internal factors, while DCLIENT and COMPETITOR are only partially mediated. This indicates that the adoption of GSCM practices of Chinese companies is probably more responsive to non? coercive and competitive factors such as pressures from the domestic clients and leading companies in the same sector. This interesting ? nding also con? rms that governmental regulations in China do not play an active role in encouraging industrial practices in GSCM. In addition, the greater reduction of signi? ca nces in step 3 than in step 2 demonstrates that the variable of TRAINING is indeed potent as an intermediate variable.The internal environmental training of related employees may strongly enhance a companys capacity to deal with external pressures by cosmos proactive in environmental management such as GSCM practices. Conclusions This paper explores the current status and determinant factors of GSCM practices adopted by companies located in the Yangtze River Delta of China. The surveyed companies perform slightly better than the companies sampled in a Copyright 2011 John Wiley &038 Sons, Ltd and ERP Environment Bus. Strat. Env. 21, 116 (2012) DOI 10. 1002/bse Green Supply Chain Management in China 15 previous survey in North China (Zhu et al. , 2008). However, the overall level of GSCM practices does not differ dramatically. This con? ms that Chinese companies are still at a preliminary stage of GSCM practices. In particular, the companies environmental management in cooperation w ith external members of the supply chain is very marginal. Among a larger range of determinant factors classi? ed in this study, external pressures from domestic clients and competitors are signi? cantly and positively associated with LGSCM while the regulatory pressure shows slightly positive in? uence. Learning capacity of the company signi? cantly determines LGSCM as an internal factor. Differing from the result of Zhu et al. (2008), the support of top managers has less in? uence on GSCM activities.These results are consistent with those of Jeppesen and Hansen (2004), which attributed the environmental improvement of Third World companies on the value chain to external market forces and the internal resources of the companies. Another meaningful ? nding of our analysis is that the internal factors are greatly mediating the in? uences of external pressures. Our analysis may provide essential policy implications for promoting the GSCM practices of companies in China. Many more conc erns about a companys environmental performance from its external stakeholders will be facilitated, which may generate pressures for the companys efforts in GSCM practices. It is very necessary to educate companies to better understand the advantages and approaches of GSCM as an innovative strategy for sustainable production.The diffusion of successful cases would be an effective method, as it helps increase a companys capacity to actually adopt GSCM practices. As an empirical study of GSCM in China, this paper develops a comprehensive analytical framework and conducts an integrative analysis. Nevertheless, a some questions remain for subsequent studies. As examples, the working mechanism of determinant factors identi? ed for GSCM practices needs to be observed in more detail. 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