Greening manufacturing: the role of institutional pressure and collaboration in operational performance

Abstract

PurposeEnvironmental concerns, government action and activism have increased the bar for how businesses operate. The United Nations also suggested sustainable performance in their SDG-12 and SDG-13 to achieve sustainability by 2030. Therefore, this research aimed to examine environmental and operational performance in the manufacturing context and how institutional pressure and manufacturing supply chain collaboration affect performance.Design/methodology/approachData were collected from 207 manufacturing firms using purposive sampling. The hypotheses were tested through a Covariance-Based Structural Equation Modeling approach with the help of IBM SPSS AMOS version 22.0. The study conducted an explanatory factor analysis and found two sub-constructs (higher-order) for “institutional pressure.”FindingsThe findings illustrated that environmental performance significantly mediates the relationship between manufacturing supply chain collaboration and operational performance. The manufacturing supply chain collaboration significantly directly and indirectly affected operational performance. Likewise, institutional pressure was a crucial construct for manufacturing supply chain collaboration.Originality/valueIn earlier studies, the relationships of study variables were examined individually. However, this study validated all the relationships in an integrated model with one variable (institutional pressure) in higher order. The study is grounded in institutional and stakeholder theory and contributes to the literature on green measures. At the operational level, the research can assist managers in comprehending the function of various manufacturing supply chain players to assist the eco-friendly practices that help to achieve SDG-12 (Responsible Consumption and Production) and SDG-13 (Climate Action) by 2030.