Efficacy of China’s strategic environmental management in its institutional environment

A Systematic Review of Barriers in Adoption of Environmental Management Accounting in Chinese SMEs for Sustainable Performance

Small- and medium-sized enterprises (SMEs) play an important role in sustainable development not only for their significant contribution to China's economy but also for their large share of total discharged pollutants. Despite the widely acknowledged importance and benefits of environmental management accounting (EMA), the level of adoption and implementation of EMA practice is still weak within SMEs in many countries, especially in China. The current systematic review aims to identify the barriers affecting the Chinese SMEs for adopting EMA practices along with the critical success factors required for adopting EMA practices by SMEs and their top management for ensuring sustainable corporate environmental performance in China. The study is carried out following the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) guidelines. In total, 73 articles were found to be eligible to be included in the systematic review, which was published on EMA in small- and medium-sized enterprises in China. Our study aims to document barriers to the adoption of EMA among Chinese SMEs. The review concluded that strict legislation and the availability of flexible financing options for SMEs can promote the adoption of EMA by SMEs. The establishment of environmental reporting systems and auditing mechanisms can further increase the utilization of EMA by small and medium firms. Barriers to EMA adoption can be mitigated after careful consideration of the current situation in SMEs. Documentation of significant barriers may help to form supportive policies which ultimately add to the efforts toward climate change mitigation.

Explicating the microfoundation of SME pro-environmental operations: the role of top managers

Purpose

By recognizing the decisive role of top managers (TMs) of small- and medium-sized enterprises (SMEs), this study attempts to explicate the microfoundation of pro-environmental operations of SMEs by examining the influence of institutional pressure on managerial cognition and subsequent SME pro-environmental operations. This study highlights the personal ethics of TMs, so as to examine the moderating effect of TMs' place attachment on SMEs' pro-environmental operations.

Design/methodology/approach

Empirical data are collected from a questionnaire survey of 509 SMEs in China. Hierarchical regression results are subject to cross-validation using secondary public data.

Findings

This study demonstrates that coercive and mimetic pressures have inverted U-shaped effects, whilst normative pressure has a U-shaped effect on the threat cognition of TMs. The results also show that TMs' threat cognition (as opposed to opportunity cognition) positively influences SMEs' pro-environmental operations. Moreover, both the emotional (place identity) and functional (place dependence) dimensions of place attachment have positive moderating effects on the relationship between threat cognition and SMEs' pro-environmental operations.

Practical implications

Findings of this study lead to important implications for practitioners such as regulators, policy makers and trade associations. Enabling better understanding of the nature of SMEs' pro-environmental operations, they allow for more targeted development and the provision of optimal institutional tools to promote such operations.

Originality/value

This study allows some important factors that differentiate SMEs from large firms to surface. These factors (i.e. institutional pressures, managerial cognition and place attachment) and the interactions between them form important constituents of the microfoundations of SMEs' pro-environmental operations.

The Dark Side of Environmental Sustainability in Projects: Unraveling Greenwashing Behaviors

Greenwashing behaviors (GWBs) are positive environmental communications in combination with poor environmental performance. Using fraud triangle theory, this study investigated the effects of three types of factors (pressures, opportunities, and rationalizations) that shape contractor GWBs. Primary data from 586 respondents were analyzed using structural equation modeling (SEM) and fuzzy-set qualitative comparative analysis (fsQCA). The SEM results indicate positive effects for these factors with the exception of isomorphic pressures and reveal the mediating role of rationalization. The fsQCA results present three configurational models that trigger GWBs. Theoretical and managerial implications are provided that shed new light on facilitating environmental sustainability in projects.

Environment Practices Mediating the Environmental Compliance and firm Performance: An Institutional Theory Perspective from Emerging Economies

Coercive pressure has forced firms to take up environmental measures in the last two decades in emerging economies. Under normative pressure, large firms with farsightedness take up the environmental practices as industry leaders. In a little mature emerging economy, such as India, where triple bottom line awareness is growing, the government facilitates the firms to operate in an environment-friendly ecosystem. We investigate how do environmental compliance and environmental practices influence the overall firm performance? The performance was measured in terms of financial, customer, internal business process, and learning and growth performance. A survey instrument was designed using well-established scales and administered to the middle to top-level corporate management executives to gather 240 data from the Indian firms. A rigorous statistical validity, diagnostics, and SEM were used to test the hypotheses. The environmental practices showed a full mediation effect on the effect of environmental compliance on performance. The examination of mediation relationships in an environmental context is limited in the reported literature. This paper is among the initial works that deal with complicated mediation relationships drawn from institutional theory propositions. The study established and argued that environmental practices' ecosystem would turn firms towards voluntary environmental compliance and eventually enjoy the long-term performance.

How to enhance supplier performance in China: interplay of contracts, relational governance and legal development

Purpose

Given the pivotal influence of institutional forces, an important yet underexplored question in supply chain management literature is how contractual and relational governance jointly affect supplier performance under weak legislative environments. This study tends to solve the debate by distinguishing contractual definability from contractual enforceability and by considering the contingent role of legal development in China.

Design/methodology/approach

Using a combined dataset of secondary data and a survey of 224 buyer–supplier dyads in China, this study examines how contractual definability and contractual enforceability interact with relational governance differently in driving supplier performance, and assesses the contingent role of legal development.

Findings

This study finds that contractual definability complements yet contractual enforceability substitutes relational governance in affecting supplier performance. Moreover, legal development weakens the complementary effect but strengthens the substitutive effect.

Originality/value

The study firstly enriches supply chain management literature by classifying the roles of contracts into contractual definability and contractual enforceability and showing their differential interplay with relational governance. Second, the study contributes to the complements–substitutes debate by revealing the shifting role of legal development. Third, the research enriches the understanding of supply chain management in the Chinese market.

Conflict management in a multinational firm's production shifting decisions

In recent years, many apparel multinational firms (MNFs) have shifted their production from traditional manufacturing bases (e.g., China) to the emerging ones located in Southeast Asia (e.g., Vietnam and Bengal). The interactions among market sizes, MNF's competition with local rival and the global tax rules play key roles in the MNF's decisions. In this paper, we study the preferences of a MNF and its contract manufacturer (CM) over two manufacturing outsourcing structures and investigate whether their objective conflicts can be reconciled. The MNF relies on the CM for production and sells goods in both Chinese and Southeast Asian markets. It is optional for the MNF to use a CM located in China, but has to suffer from the CM's differential prices because of China's partial value-added tax (VAT) refund policy. It is also optional for the MNF to use a CM located in Southeast Asia, resulting in uniform production fee for the goods sold in two markets. The former is traditional outsourcing structure (TS), and the latter is shifted outsourcing structure (SS). Interestingly, we find that, the MNF may first prefer SS, then prefer TS, and back to prefer SS, as the relative market potential between the Southeast Asian market and the Chinese market increases. The CM's preferences may switch twice, too. We identify the opportunities where the preferences of the MNF and the CM are aligned, which are driven by China's partial VAT refund policy.

When do 3PLs initiate low-carbon supply chain integration?

Purpose

This paper draws on the perspective of social networks to examine when 3PLs initiate low-carbon supply chain integration (LCSCI) in decarbonising supply chains.

Design/methodology/approach

A questionnaire survey was conducted on a sample of 348 Chinese 3PLs. Stepwise regression was adopted to analyse the data.

Findings

It is found that LCSCI has a positive effect on firm performance. From the social network perspective, a larger scope of outsourcing increases 3PLs' embeddedness, which increases their chance of success in initiating LCSCI, especially for 3PLs with higher decarbonisation capabilities. Interestingly, although the pressure from government regulation can also motivate LCSCI, it is less effective for 3PLs with higher decarbonisation capabilities because they can be too embedded in the network to freely adapt to regulations.

Research limitations/implications

This study has investigated 3PL-initiated LCSCI only from the view of 3PLs. A dyadic approach which includes the perception of customers would be desirable.

Practical implications

The results highlight the critical role of 3PLs as supply chain orchestrators in decarbonising supply chains, and the effectiveness of LCSCI as a competitive strategy of 3PLs. Coercive pressures from government regulations are not constraints but resources for 3PLs in initiating LCSCI, especially in markets where the 3PLs have insufficient decarbonisation capabilities.

Originality/value

This study contributes to theories on 3PLs' interorganizational low-carbon initiatives, LCSCI, and the paradox of social networks in supply chains.

Strategies for value recovery from industrial waste: case studies of six industries from Brazil

Purpose

The purpose of this paper is to present possible strategic actions that aim to recover the value still remaining in industrial waste.

Design/methodology/approach

The research method is a multiple case study. The sample included six Brazilian companies of the footwear, metal-mechanics, pulp and paper, beverages, chemical and food industries. The study investigated the production process, waste generation, internal reuse, the destination of unused waste, difficulties and strategic challenges.

Findings

Possible strategies to recover the value remaining in industrial waste are increasing the internal reuse, developing new routes to other industries, reducing the waste generation, increasing the destination to cooperatives or recycling companies, which require studies to understand the legislation and agility in licensing and reducing the logistical cost of the destination.

Research limitations/implications

The study relies on six case studies. Further research shall encompass an entire industry, starting with hypotheses derived from the cases.

Practical implications

The main barriers observed for reuse and recycling are uncertainties and ambiguities in the interpretation of legislation, the difficulty for the environmental licensing for recycling operations, excessive logistics costs for exploration opportunities and the lack of research to reduce the waste generation and to increase the internal reuse.

Social implications

Waste managed by scavengers’ cooperatives can offer jobs to the people of vulnerable communities.

Originality/value

The study offers robust hypotheses to be tested in a survey on the capacity of a waste management strategy to create competitive advantage in the industry. The study establishes a relationship between waste management and three competitive enablers, compliance, corporate image and green market.

Factors that Sustain Health and Safety Management Practices in the Food Industry

Due to the significant change in business organizations, scholarly interest has diverted from studying the determinants of financial performance to understanding the environmental activities, sustainability practices, and health and safety management practices. Despite the extensive literature, it is yet to understand either internal or external factors that improve health and safety management practices in SMEs. This research examines the influence of the internal factors—intellectual capital, information technology capabilities (ITC), and entrepreneurial orientation, and the external capabilities—government financial support, institutional pressure, and managerial networking on six health and safety management practices: management commitment, staff training, worker involvement, safety communication and feedback, safety rules and procedures, and safety promotion policies. We researched 410 Pakistani SMEs from the food business industry. The results indicate that intellectual capital significantly improves management commitment, safety communication and feedback, and safety rules and produces; ITC significantly improves management commitment and safety communication and feedback; and entrepreneurial orientation significantly facilitates safety training and worker involvement only. In the external capabilities, government financial support has a significant influence on management commitment, worker involvement, safety rules and policies, and safety promotion policies. Institutional pressure has a significant influence on management commitment, safety training, safety communication, and feedback and safety promotion policies. Managerial networking significantly influences safety training, worker involvement, safety rules and procedures, and safety promotion policies of SMEs. Focusing only on the food industry is the major limitation of this research, this study recommends SMEs to give sufficient attention to their internal and external factors to enhance health and safety management practices. Further implications are discussed.

The adoption of green practices by Chinese firms

Purpose

Despite touting the value of green practices, many firms struggle to respond appropriately to the diverse environmental issues. The purpose of this paper is to investigate how the external and internal pressures interplay to influence top management championship, which, in turn, fosters the company’s green culture and the adoption of green practices. It thus helps to explain Chinese firms’ diversity with respect to the adoption of green practices.

Design/methodology/approach

A conceptual model is developed that summarizes the interplay of external and internal pressures, top management championship, green culture and the adoption of green practices. Data from 148 Chinese manufacturing firms were collected and a structural equation model was used for statistical analysis.

Findings

Government policy that provides incentives to adopt green practices and overseas customers’ green demand has significant positive influences on top management championship, while resources pressure has a significant negative effect. Government command and control policy, domestic customers’ green demand and organizational inertia do not impact top management championship. Furthermore, top management championship is positively correlated to both green culture and green practices, and green culture contributes to implementing green practices.

Practical implications

The findings help us understand which external and internal factors inspire or force top management to adopt green practices, and how they do so. Moreover, managers must also be aware of the bridging role of green culture. The findings will be valuable to policy makers in forming and enforcing “stick” or “carrot” environmental policies.

Originality/value

Leveraging a multi-theoretic approach, the authors’ research builds on insights from the institutional theory, natural resource-based view (NRBV) and upper echelons perspective, so as to increase the authors’ understanding on how firms adopt green practices to respond to environmental sustainability pressures. The institutional theory and the NRBV are leveraged in this study to recognize that firms perceive not only external institutional pressure for environmental management but also the internal pressure from resource constraints and capability to change. Upper echelons perspective is integrated into this study to explain the leadership role that top management serves in the management of the organization’s response to dynamic changes in the institutional environment and cultivate green culture within organization.