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The purpose of this paper is twofold: first, to investigate the direct effect of internal and external drivers on full implementation of the green supply-chain management…
The purpose of this paper is twofold: first, to investigate the direct effect of internal and external drivers on full implementation of the green supply-chain management (GSCM) practice; and second, to investigate the direct effect of internal drivers and indirect effect of external drivers on the full implementation of the GSCM practice.
The study is based on the data collected from 30 to 35 furniture small and medium enterprises (SMEs) chosen from each surveyed region. In this case, the selected SMEs should have been conducted some GSCM practices. So, the total number of samples used in this study is 100 SMEs. The relationships between internal and external drivers and the success of the implementation of the GSCM practices are analyzed using structural equation modeling.
The results of this study have revealed that internal and external drivers, which consist of involvement, technology, financial, regulation and customer pressure, have a direct effect on early adoption of GSCM practices. Among these drivers, technology gives the most significant effect. The results have also shown that only financial factor has a direct effect on the full implementation of GCSCM practices, whereas regulation and customer pressure have positive effect on the full implementation through early adoption of GSCM practices.
Among the limitations of this study is related to the sample that was restricted to SMEs of furniture in three regions. The other limitation could be related to variable involved as internal and external drivers. This study has only used involvement, technology, knowledge, financial, and regulation and customer pressure as the antecedent variables of early adoption of the GSCM practices. Moreover, this study has only used the Likert scale as an approach to measure the implementation of GSCM practice management, which could be the source of bias in expressing the level of the implementation.
From the internal side of enterprises, the top management or the owner of SMEs can develop an effective comprehensive environmental strategy. This strategy requires the top management of SMEs show an environment oriented, allocate a specific person for implementing the GSCM practice and learn about the current technology that can support the environmentally friendly products, and also allocate the specific budget to support the implementation of GSCM practice. Moreover, since the study also found that financial factor was just the only factor having a direct effect on the full implementation of GSCM practices; therefore, the government should help the SMEs of furniture in developing low cost-GSCM implementation techniques and also provide easiness for the SMEs to get the needed fund for implementing the GSCM practice.
The research has confirmed that regulation and customer pressure have the positive and significant effect on the full implementation of GSCM practices. It may encourage the government to make some policy related to improvement of the implementation of GSCM practice by SMEs of wooden furniture, specifically in the Central Java Province. Another implication would be to encourage the customer to make purchasing oriented decision for the implementation of GSCM practices by the SMEs of wooden furniture.
This study contributes to the literature of GSCM by combining the critical factors of implementation of GSCM practices toward internal and external drivers and empirically testing the direct and indirect impacts on the level of adoption of GSCM practices.