The Correlates of Developing Green Supply Chain Management Practices: Firms Level Analysis in Malaysia

Abstract

Over all businesses are ever changing competition environment, organization are always
required to make modification internally and externally to compete globally successfully into marketplace. Supply chain management is key sources for firms to gaining superior performance. The basic purpose of this paper is to examine the level of association between the two indicators management support and their organization learning with the concept of green supply chain management environment. Supply chain is globally increasingly important concerns for all business and challenge for them are logistics management. Total quality management (TQM) and environmental management come from firm’s experiences and procedure of organizational learnings. This study computed positive significant relationship with organizational learning mechanism; support of
organization and GSCM practices adopted controlled variables from organizations size, regulations of country perspective, cost pressure by organization, practices of
industry at different levels. Over all findings and implications of logistics management are discussed

Full text

Int. J Sup. Chain. Mgt Vol. 7, No. 5, October 2018
316
The Correlates of Developing Green Supply
Chain Management Practices: Firms Level
Analysis in Malaysia
Tulus Suryanto#1, Muhammad Haseeb#2*, Nira Hariyatie Hartani#3
#1 Faculty of Islamic Economics and Business, the State Islamic Institute of Raden Intan Lampung
1tulus@radenintan.ac.id
#2Taylor’s Business School, Taylor University, Lakeside Campus, Subang Jaya Selangor Malaysia
2scholar_economist@yahoo.co.uk
#3School of Government (SoG), College of Law, Government and International Studies (COLGIS), Universiti
Utara Malaysia (UUM), Sintok 06010 Kedah Malaysia
3scholar_economist@yahoo.co.uk
Abstract -Over all businesses are ever changing
competition environment, organization are always
required to make modification internally and externally
to compete globally successfully into marketplace.
Supply chain management is key sources for firms to
gaining superior performance. The basic purpose of this
paper is to examine the level of association between the
two indicators management support and their
organization learning with the concept of green supply
chain management environment. Supply chain is
globally increasingly important concerns for all business
and challenge for them are logistics management. Total
quality management (TQM) and environmental
management come from firm’s experiences and
procedure of organizational learnings. This study
computed positive significant relationship with
organizational learning mechanism; support of
organization and GSCM practices adopted controlled
variables from organizations size, regulations of country
perspective, cost pressure by organization, practices of
industry at different levels. Over all findings and
implications of logistics management are discussed.
Keywords: Green Supply Chain Management,
TQM, Management Support, Organizational
Learning
1. Introduction:
With the passage of time, various industries are
shifting their competitive focus among the
networks of other companies. For improving cost
and service performance, various companies have
enhanced their scope in terms of logistic operations
to supply chain management (SCM). The authors
like Guide Jr, V. D. R., and Van Wassenhove [20],
explained two views regarding the logistic
activities. The first one is known as inbound
logistic or material management and 2nd is physical
distribution or outbound logistics. The first one is
linked with the movement of products from outside
to inside the firm. For instance, storage and
processing of the input for their reshaping into
output. Significant integration and coordination is
very much important among various parties
involved in it, for effective management of both
inbound and output logistics [8]. This ultimate
integration among the parties will result in most
cost-effective way.
From the perspective of supply chain, logistic is
concerned with the management of both upstream
and downstream relationship. Major parties in both
upstream and downstream are the suppliers and
customers [51]. Such elements have made supply
chain an important process with competitive and
logistic strategy specifically for the multinational
corporations or MNCs. It is purely the management
of overall series of activities which are starting
from the acquiring of raw material components
from its suppliers and delivery of ultimate
product/service to its customers. For this purpose,
MNCs have established a global network with
various suppliers to get the competitive advantage
from country and industry specific dimensions.
In last decade, the economy of Malaysia grew with
an attractive growth rate of 6.2 % in 2017
compared to 4.1% in 2016. Besides the level of
global trade also increased with the Malaysia
dramatically with the membership of Malaysia in
World Trade Organization (WTO). With the
increasing level of globalization, it is obvious for
the Malaysia and other Asian countries to consider
seriously the environmental implication of their
supply chain and logistic practices. Additionally,
sharing their best concern with international
partners is also a key discussion [35]. Through
these competitive, environmental and economic
______________________________________________________________
International Journal of Supply Chain Management
IJSCM, ISSN: 2050-7399 (Online), 2051-3771 (Print)
Copyright © ExcelingTech Pub, UK (http://excelingtech.co.uk/)

Int. J Sup. Chain. Mgt Vol. 7, No. 5, October 2018
317
pressures with outcomes, Malaysia has grown in
logistical and supply chain practices [39].
Additionally, the concept of GSM represents within
and outside the organizational role for the
management of environment. The concept of
GSCM overs the both dimensions of inbound and
outbound logistic with the major consideration to
incorporate environmental issues at each stage.
Such consideration can help to protect the
environment through to post consumer disposal
with the closing the loops of reverse logistic as well
[16] . Government and pressure from the public
have increased their influence over various
Malaysian enterprises to focus on GSCM and to
work for the implementation of environmental
practices [17][71][72] .
This study emphasizing on the major three
concerns of the extent to GSCM for
implementation effect by Malaysian’s firms, which
are as, (A) External Relationship (ER) of green
customer cooperation and green purchasing by
environmental activities. (B) Recovery of
investment (IR) in the context of logistics domain
from an end of life ‘closing-the-loop’ and the last
third is (C) inside scoop interaction with the
involvement of eco-design practices for delivery of
cooperative design. Conducted previous researches
on the developing Malaysian firms, revealed the
practices of GSCM have quite strong potential to
effect the environmental and process relationship
towards the supply chain, and these practices of
GSCM have strong significant impacts on financial
performance, enterprises environmental and
operational [52][73].
Expanding this research domain, further argued
that adopted practices of GSCM is positively
related to two characteristics of organizational
management: support of management and also
learning of organization, these organizational
characteristics and controlling environment of
organization are the supplier and cost pressure,
relevant practices based on the industry line, size of
organization and market. The adopted practice of
GSCM also explores the implication of GSCM
practices on logistics managements towards the
supply chain management. In the start GSCM
relevant definition and of practices are define, after
demonstrable hypothesis developed from the
literature support, further we present our methods,
data and analysis techniques, in the last we come
up with the detailed discussion of the finding of
this study.
2. Theoretical Background
2.1 Green Supply Chain Management
Practices
Green Supply Chain Management Practices
(GSCM) has defined in different context and
definition may vary one author to another but in
simple context of GSCM is the relationship of
buyer and vendor of green products. GSCM is
designed overall to crucial consideration into
decision making for all stages of materials and
logistics management disposal of post-consumer
[10]. On the other side of definition with extensive
concepts of ‘closed-loop’ the implementation of
supply chains is a long run logistics cycle of
products and material, further use, reuse and
management of product and material from inside
and outside organizational perspective.
2.1.1 Green Supply Chain Management
Practices and its components
In the context of emerging Malaysian firms, this
study has major focuses on its three GSCM factors
for emphasizing the adopted practices for all
engage firms. These three are the factors (A)
External Relationship (ER) factors of GSCM, these
factors provide outbound/inbound linkages for
environmental management. (B) In Eco-design
(ECO), process design and products externally and
internally linked with Eco-designs factors, (C) IR
factors focus on ‘closing the loop’ which provides
recycling of materials, reuse of material and reverse
logistics [6].
The above three factors are true representation of
SCM and organizational logistics functions [44].
Similarly, the other factors are most related to the
cooperative operations of supply chain
management which acquire the components of
products and materials [9], while the importance of
other components such post operational reflected
into IR practices [55]. Further, explanations of
major logistics practice in GSCM context for
valuable growing importance in Malaysian firms
enterprises.
2.1.2. External Green Supply Chain
Management Practices relationship factors
Upstream and downstream indicators can be
including in GSCM practices for external
organizational operational boundaries. Inbound
logistics activities are including in upstream factors
such as green purchasing and vendor management
[43]. For example, there are such items of
environmental requirements to purchased items that
providing suppliers with design specification,
environmental objectives and environment audits
for supplier’s internal suppliers and management
certification ISO 14001 [7].
Green outbound logistics with such activities,
distribution and components of marketing product
or organizations supply chain are the downstream
factors [32]. Researchers founds from studies

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collaboration around environmental issues with
supply chain customer supplier are the significant
environmental practice adoption and performance
in the US and also in Southeast Asia [51].
Customer and downstream foreign enterprises
facing environmental pressures in Malaysia, for
leading Malaysian enterprises to self-regulate [56].
Explained with example, direct suppliers and their
suppliers are not only evaluating in developed
countries by leading firms. Young Malaysian
consumers increasing awareness of environment
and prefer green products [41].
2.1.3 Eco-design approaches
Previous work of Eco-designs was clearly
considered the technical improvements to reduce
the environmental cost by their products and
processes. The improvements become possible
when factors of designs externally control of
producers, relationship of suppliers and customers,
government authorities and recyclers, include
important GSCM practice [53].
Eco-designs success demands cooperation’s of
cross functional between intra-organizational units
for both outside partners and inside company
throughout the supply Malaysia management.
Previous studies of US overall support the product
and GSCM [37]. Studies like Hanim Mohamad
Zailani, Eltayed, Hsu, and Choon Tan [22] further
support eco-designs link with GGSCM practice
into the Malaysian Environmental Protection
Agency programs which give the green supply
chains as core aspect of their designs for specially
in their environment programs.
2.1.2.3. Theory of Investment Recovery or
IR
Investment recovery (IR) is used as an important
aspect of organizational strategic use of
redeployment, reselling, and recycling and other
use full similar techniques to extract greater value
from materials and products by organization. IR is
also very unique technique to generate revenue by
selling useless assets, for reducing storage, space
and deploying idle assets from other corporate
locations to avoid extra purchasing additional
requirement of equipment for materials and
processes [1]. Investment recovery also provides
the facilities of non-working assets [10].
Investment recovery (IR) is both environmental
and economically beneficial practices for
organization and society. [15] stated in his study
that 70% at least every sales of dollar generate by
investment recovery become surplus and it is
possible if industries are as diverse as well. Use full
practice of IR are as the reverse logistics practices
such as recycling, reuse, remanufacturing and other
like reclamation [40]. In Malaysia, investment
recovery (IR) not specific much attention such as in
other developed countries like US and Germany,
reasons are less waste management policies in
Malaysia and same lack of closed-loop systems
infrastructure [54]. The government of Malaysia
changed their focus from resources of subsides into
some important resources such as coal and natural
gas, for the sack of renewal of new seek of interest
in IR practices. In this study, there are three main
GSCM practices that main focus of this entire
study that shows emphasized importance in
Malaysian perspective, the next discussion is about
determinants of major practices by Malaysian
firms.
2.1.3 Organizational level determinants of
Green Supply Chain Management Practices
in the context of Malaysia
In this study, we examined two major
organizational determinants of GSCM practices
that are investigated by organizational learning
from decade, past studies, experience and
management support.
2.1.3.1. Learning of the organization as key
determinant of Green Supply Chain
Management Practices
The economic system is attributed by market
imperfection, in the resources based theory
capabilities and components of firm resources are
most crucial competencies and competitive
advantage in all of firms rivals especially those are
very valuable, rare, inimitable [48]. In the
environmental areas most beneficial competitive
strategies and outcomes depends on firms’
development techniques, maintenance of their all
resources, effective and efficient implementation,
and over time capabilities [11]. Resources based
frame work, organizational learning viewed as an
especially very important potential when
organization keep focusing on continuous
improvement, complementary capabilities build
from continues improved of organization, such as
those are connected with ISO 9000, and Total
Quality Management system experience, in the
previous study example, GSCM practices apart
where in terms of higher-order learning
proficiencies involves such as TQEM, EMS, and
ISO 14001. Organizational learning system leads to
fruit full implementation and efficient outcomes
from existing resources and capabilities.
The proper implementation comes from the
building of new organizational activities in such a
way that develop the coordination and skills
[14][73][74], as it seems consider the most
important and unique structure, for material,
process and product innovation. GSCM practices
are very adaptive, derived benefits from
environmental learning because of tacit skill

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development, by involving employees, team
building, and employee coordination of team effort
and share inclusive knowledge [43]. These work
practices are decentralized in nature, these practices
are quite tacit based on skills which are hard to
duplicate and very valuable in their area [29], these
organizational learning are truly based on past
experiences and expertise with their simple
structure of system. Organizational process based
on socially complex and intangible in nature
specifically knowledge oriented [2], such
knowledge able process taps organization
expertise, different ranges of strategic, well
cognitive system arguable cost low.
Figure1: Theoretical Model
The studies like Fraj, Matute and Melero [13]
discuss that the environmental performance is
linked with organization capabilities and more
capabilities of organizations possessing can more
easily adopt proactive environmental management
practice. The study of Haider [21] stated greater
management system experiences with existing
pollution- prevention of originations can easily
adopt EMS at very lower cost. [26] discuss in his
studies that the higher experience organization have
with management systems like TQM and ISO 9000
are able to handle their systems based on true
knowledge successfully adopting Menschiness
organizations have well-structured quality
management experiences that is gained from
environmental management experiences that is
directly associated with GSCM practice which
promotes environmental management practice. In
Malaysia most of the organizations have
experiences to establish environmental
management from quality management programs
such as common example explained ISO 9000
certification [49].
Based on the empirical analysis and theoretical
support we hypothesize the organizational learning
that provide access for organization to transfer
expertise gained from experiences with systems
such as TQM, JIST and ISO 9000 generating
necessary momentum and facilitating commitment
to GSCM practices. This study has its first
hypothesis.
H1: practices of GSCM adopted by Malaysian
organization will be positively related to the level
of organizational learning capabilities.
Management Support with commitment as
determinant of GSCM practices.
In an organization implementation of innovation
are critical elements of adoption by management
especially in environmental system [34].
Organizational innovation is bit difficult task that
makes absent for even for initial stage of very
sustained new comers [5]. Decision from top
management may take initial step for success by
promoting employee involvement, cultural shift,
increase in knowledge management, committed
employees, increase in employee empowerment
[36], [69], [70], in organization employee behavior
effects from organizational rewards and incentives
systems, by providing efficient trainings,
communication secessions and developing teams in
an organization. In environmental management
previous studies described that there is a proper
involvement of senior’s management for cross
functional programs such as GSCM and TQM.
Successful implantation of TQM.
Success is always directly connected with the top
management support, their decision are very
important to carry a new change, these success are
such as business process reengineering, ISO 14000
implementation, enterprise resource planning, and
enterprise management system [28]. Literature
from previous studies explained the support of top
management in executive board, and efforts of
organizational commitment are accordingly to
GSCM. Support not only from top management but
also from midlevel management is important to
have successful implementation of environmental
practices [30]. For environmental practices support
from middle level management is essential for all
department in organization and cooperation is very
important for successful implementation of
environmental practices [33], [46]. For
environmental issues and business management
strong communication between business managers
and environmental professional is necessary to
support environmental practices.
Based on literature support there is our second
hypothesis of the study:

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H2: GSCM practices adopted by Malaysian
organizations will be positively related to the level
of management support.
3. Methods:
3.1. Sample:
To collect the data for some significant findings,
Malaysian firms are under observation in three step
processes. First this study conducted pilot test to
check validated survey instrument design using 28
participants from two different managerial
workshops. Responses from mailing were 128, and
phone calls follow up was 1000 which are
randomly selected by Carlsberg Brewery Malaysia
Berhad. Meanwhile, over all a total of 285,
efficient responses were collected which were used
in the study and tested it for conclusion.
General industry characteristics of the respondents
are shown in Table 1. As can be seen, the sample is
drawn from a representative range of 11 Malaysian
industries.
3.2.1. Outcome and Explanatory factors of
the study
Among the several dimensions of Green Supply
Chain Management Practices major focus is on EF,
IR and ECO dimensions. Besides, in this study
GSCM practices, industrial expert opinion and pilot
tests and other relevant literature based on careful
review. In this study Likert scale is used to measure
a survey questionnaire.
3.2.2. Control variables
GSCM practice determinants based on three factors
which are (ER, INV, ECO) based on literature
these three factors include different regulatory,
market and their suppliers pressure [23], [24], [30],
[47], [59], [60], [67], [68] in studies five point
Likert scale was used.
3.2.3. Other control variables
In study studies, researcher mentioned some
control factors for the support of the model of study
that relate the determinants of firm’s level
management support to GSCM useful practices.
Industry level controls for GSCM practices
gathered by taking the basic mean level of each
relevant factors using by industry. In GSCM
practices, these are basic controls for firm’s
activities which are strongly supportive to structure
of the industry. In the same industry of GSCM
practices the institutional theory, derived the
mimetic isomorphism that is about the best
practices that enhance the legitimacy by using
GSCM practices. For GSCM practices and
implementation of ISO 14001 the most influencing
factor based on the literature was identified as cost
pressure for organization [1], [19], [27]. The other
controls, market pressure and regulatory discussed
in previous studies have significant influences on
firm’s environmental management in many of
countries [55],[58],[64],[65]. For the supporting,
cleaner production and encouragement of ISO
14001 certification, Malaysian governments
developed very stricter regulations for
environmental management [12]. Firms
environmental activities are also affected from
stake holder pressures such as suppliers and
customers [3]. In different studies, previous
researcher has stated the characteristics and
importance of customer pressures on firm’s
environmental conduct [25]. They also stated that
in Malaysia leading firms regulated by their self,
because in Malaysia.
Table 1: Distribution of Survey Respondents
Enterprises by Industry
Industry
Total
Percentage
Automobile
48
16.84
Electrical and
electronic
16
5.61
Chemical
32
11.22
Food
8
2.80
Iron and Steel
9
3.15
Paper
15
5.26
Power Generating
60
21.05
Other
20
7.01
Manufacturing
36
12.63
Textile
9
3.15
None Specified
32
11.22
Total
285
100
At last, in this study organizational size controls
environmental issues based on their financial
issues. Different studies have different views about
organizational size but it may explain differing
practices between smaller enterprises and the larger
enterprises. one empirical analysis that firm size
has very small positive influences on eco-
sustainability orientation [42]. Based on following
range organizational size is operational zed by
employment level for this study, ranges are >8000,
3000-8000,1000-3000,500-100,100-500 and <100
employees.
3.3. Factor validation
In this study, before introducing model and testing
hypothesis, we determine the most validated
measurement properties of measuring construct for
this study. In this study, our suitable choice is
conformity factor analysis with the structural
modelling approach as developed through AMOS
tool facility in SPSS for measuring appropriate
measurement properties based on previous studies.
In this study the major independent variable of
study is (management support, organizational

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321
learning) and the dependent variables are and also
control variable for this studies are (cost pressure,
supplier pressure, market pressure, and the country
regulations). CFA treats separately from regression
model to each three set of construct. CFA analysis,
all the measurement implied to correlate other
factor for corresponding factors in CFA.
3.4. Model specification:
In this study, ordinary least square estimation
model employing standard hierarchical multiple
regression for testing the hypotheses. The
estimation model mentioned below and for GSCM
practices for ER, IR, ECO.
4. Results and discussion:
4.1 Result
In this study, hierarchical regression model
presented in four steps, in the very first step, the
control variables are regressed with only GSCM
practice, in second step, management support and
organization learning as independent variable
mentioned, in the third step, the model presented
for management support and in the last fourth step,
model presented for organization learning. These
above were four steps to present this study
hierarchical regression model.
4.2. Discussion and implications:
In particularly Malaysia presented best formation
of those strategies which are green to study.
Majority of recent studies shown that worlds
manufacturing will be completed in Asia in coming
decades. Through cleaner production and EMS
Malaysian organizations working to improve their
environmental image, one percent contribution of
GDP in 1999 from investment in environmental
protection and it is growing [18]. These years’
current focus in Malaysia is to develop integrated
approaches and systematic management system for
environment [54],[57],[61],[62],[63],[66].
Adoption rate of GSCM practices and development
is still lacking as more developed countries [38]. In
Malaysia, GSCM is new way of thinking about
environmental management which focuses to
supply chains from single plant improvement.
In this study, firms can control such variables are
internal management support and organization
learning program else of external variables
affecting which are as regulatory, industry and
other pressure. Malaysia has to self-regulate for the
sack of environmental performance in the rivals of
international partners. From previous results on
developing management approaches Malaysian
manufacturing organization can learn by adopting
GSCM and environmental management
approaches. Government policies and Malaysian
proactive management policies and other important
factors are creating pressure for Malaysian firms to
use these valuable practices. This study comes
with the findings that organizational learning is
strongly related to GSCM practices and these
practices show continues improvements.
Government can highlight on policies for
Malaysian organization to encourage these
practices. Involvements of Government to help
Malaysian firms for obtaining ISO 9001 and 14001
that may lead to dramatic growth and success from
GSCM practices. This study provides some
important evidences on the regulators pressures,
supplier’s pressure, in the perspective of GSCM
practices in Malaysian market. In Intuitional theory
perspectives there is a positive significant impact of
industry level of environmental practice so these
model can be used for future research [4] for
identifying determinants on environmental
behavior in emerging market. Environmental
requirement is also a challenge to meet the
requirement, for Malaysian firms is difficult to
adopt GSCM practices in their operations, logistics
activities, if the environmental requirement are
difficult to adopt. Through meaningful
implementation of Green Supply Chain
Management Practices required supporting
coordination with Suppliers and customers in the
supply chain. Logistics partners must ensure about
manufactured products, designs, and packaged to
meet the objective of environmental management
in the supply chain. Infrastructural resources are
used to handle the flow of product and information
resources to make decision among parties involved
in logistics activities. Cooperation is much needed
among logistics partners to implement Green
Supply Chain Management Practices practice and
to get desired goals for environmental change. In
management agenda different objective and
priorities have logistics partners for implementing
GSCM practices the main challenges as well.
5. Conclusion
Over all Businesses are ever changing competition
environment, organization are always required to
make modification internally and externally to
compete globally successfully into marketplace.
Supply chain management is key sources for firms
to gaining superior performance. Our finding from
this study indicated the association between
variables, and these association of variables helps
to investigate future opportunity. Future aspects
might more border in sampling and longitudinal
analysis would more efficient prove for this
management agenda. In this study, researcher
mentioned some control for the support of the
model of study that relate the determinants of
firm’s level support for the Green Supply Chain
Management Practices useful practices. Industry
level controls for GSCM practices gathered by
taking the basic mean level of each relevant factors

Int. J Sup. Chain. Mgt Vol. 7, No. 5, October 2018
322
using by industry finally this study find the
relationship of pressure and their roles in outcome
of GSCM practices, and more noticing as
moderating factor is an open ended question for
future research.
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