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How Does Sustainable Development of Supply Chains Make Firms Lean, Green and Profitable? A Resource Orchestration Perspective
Author(s) -
Wong Christina W.Y.,
Wong Chee Yew,
Boonitt Sakun
Publication year - 2018
Publication title -
business strategy and the environment
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.123
H-Index - 105
eISSN - 1099-0836
pISSN - 0964-4733
DOI - 10.1002/bse.2004
Subject(s) - business , sustainable development , industrial organization , orchestration , resource (disambiguation) , structural equation modeling , lean manufacturing , supply chain , environmental economics , process management , marketing , economics , computer science , art , musical , computer network , machine learning , political science , law , visual arts
This paper theorizes and tests the effects of sustainable development of supply chains on cost‐reduction (lean), environmental (green) and financial (profitable) performance. Based on the resource orchestration theory, we argue that internal, supplier and customer sustainable development each orchestrate different types of resource and therefore their effects vary. Structural equation modeling of data from a survey of 203 Thai manufacturers was used to test a new theoretical model. Results confirm that financial performance was achieved through cost reduction created by customer sustainable development supported by internal and supplier sustainable development. On the other hand, better environmental performance created by internal sustainable development generated no financial gains. However, internal, supplier and customer sustainable development positively affected each other, and by acting together they made firms lean, green and profitable. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment