Omega 36 (2008) 577 – 591

www.elsevier.com/locate/omega

Firm-level correlates of emergent green supply chain management

practices in the Chinese context夡
Qinghua Zhua,∗ , Joseph Sarkisb , James J. Cordeiroc , Kee-Hung Laid
a School of Management, Dalian University of Technology, Dalian, Liaoning Province 116024, PR China
b Graduate School of Management, Clark University, 950 Main Street, Worcester, MA 01610-1477, USA
c Department of Business Administration and Economics, 115B Hartwell Hall, SUNY at Brockport, Brockport, NY 14420, USA
d Department of Logistics, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong

Received 15 March 2006; accepted 23 November 2006

Available online 18 May 2007

Abstract
Greening the supply chain is increasingly a concern for many business enterprises and a challenge for logistics management
in the 21st century. Of particular concern is how to arouse organizational environmental awareness and put environmental
activities into practice in the logistics activities of their supply chains. This paper investigates the correlation of two major
factors, organizational learning and management support, with the extent of adoption of green supply chain management (GSCM)
practices in Chinese manufacturing firms, where their inbound and outbound logistics activities are potential polluters to the
environment. Organizational and operational learning was derived from the firm’s experience with programs such as total quality
management and environmental management systems. Management support included support for GSCM ideas and practices
from top and middle-level management and cooperation across organizational functions. We find significant positive relationships
between organizational learning mechanisms, organizational support and the adoption of GSCM practices, after controlling for
a number of other influences including regulations, marketing, supplier, cost pressures, industry levels of the relevant practice
and organizational size. Implications of our findings on logistics management are discussed.
䉷 2007 Elsevier Ltd. All rights reserved.

Keywords: Green supply chain management; Organizational learning; Management support

1. Introduction scope of their logistics operations to embrace sup-

ply chain management (SCM) to further improve
Industries are increasingly characterized by a shift- their cost and service performance. Ballou [1] viewed
ing of competitive focus to competition among net- that there are two aspects of logistics activities in a
works of companies. Many firms have broadened the firm’s immediate supply chain, i.e., inbound logistics
(materials management) and outbound logistics (physi-
cal distribution). The former is concerned with products
夡 This paper was processed by Guest Editors Angappa moving into a firm rather than away from it, while the
Gunasekaran and T.C. Edwin Cheng. latter deals with the movement, storage and processing
∗ Corresponding author. Tel.: +86 411 84706018;
fax: +86 411 84708342. of order for a firm’s outputs. Effective management of
E-mail addresses: [email protected] (Q. Zhu), these inbound and outbound logistics activities requires
[email protected] (J. Sarkis), [email protected] (K.-H. Lai). integration and coordination of different parties in the
0305-0483/$ - see front matter 䉷 2007 Elsevier Ltd. All rights reserved.
doi:10.1016/j.omega.2006.11.009
578 Q. Zhu et al. / Omega 36 (2008) 577 – 591

supply chain in a way that the end markets are served increasing number of Chinese enterprises to begin
in the most cost-effective manner [2]. In the supply implementing environmental practices, especially prac-
chain context, logistics is concerned with managing tices within GSCM.2
the upstream and downstream relationships with sup- The present study focuses on three aspects of the
pliers and customers to deliver customer value at the extent of GSCM practice adoption3 by Chinese man-
least cost to the chain as a whole [3]. These char- ufacturing firms, specifically (a) external relationships
acteristics have made SCM an important element in (ER) including green purchasing and customer co-
competitive and logistics strategy, especially for multi- operation over environmental concerns, traditional
national enterprises. SCM is the management of the logistics domains, (b) investment recovery (IR) from
sequence that involves how a company sources the an end-of-life ‘closing-the-loop’ perspective, a reverse
raw components it needs to make a product or ser- logistics domain, and (c) broader-based interactions
vice, how it manufactures that product or service and involving eco-design (ECO) practices, which would
finally delivers it to customers.1 Increasingly, multi- incorporate cooperative design and delivery of those
national enterprises have established global networks designs. Earlier research conducted in the emergent
of suppliers that take advantage of country–industry- Chinese manufacturing context has shown that these
specific characteristics to build this competitive and related GSCM practices have the potential to sub-
advantage. stantially influence environmental and process relation-
In 2004, China’s economy grew at an impressive ships across the supply chain and also that these GSCM
9.5% rate, and global trade has increased dramatically practices have the potential to significantly impact an
with China’s membership in the World Trade Organi- enterprise’s environmental, operational and financial
zation (WTO) since 2001. Increased globalization has performance [7,13]. Extending this line of research, we
caused China and other Asian countries to seriously argue for and test for whether the extent of adoption
consider the environmental implications of their logis- of these GSCM practices is positively related to two
tics and supply chain practices and how best to share primary organizational management characteristics: or-
this concern with their international partners [4]. Given ganizational learning and management support, after
these evolving competitive, economic and environmen- controlling environmental and organizational charac-
tal pressures and outcomes, investigating, evaluating teristics such as industry levels of the relevant practice,
and facilitating corporate environmental logistical and organizational size and market, regulatory, supplier
supply chain practices in China have grown in impor- and cost pressures. We also seek to explore the impli-
tance especially given the pressure for self-regulation cations of the adoption of these GSCM practices on
(e.g., [4–7]). the logistics management of firms in the supply chain.
Green supply chain management (GSCM) represents We begin with a brief overview of GSCM practice
a recent and important inter- and intra-organizational set and relevant definitions. We then develop testable hy-
of environmental management practices useful for lo- potheses from the literature, and present our methods,
gistics management in this context. GSCM is designed data and analyses. We conclude with a discussion of
to incorporate environmental considerations into deci- our findings.
sion making at each inbound logistics stage of ma-
terials management all the way through to the out-
bound logistics stage of post-consumer disposal and
the ‘closing-the-loop’ concept of reverse logistics [7–9]. 2 China’s 2001 entry into the WTO has also provided Chinese
Governmental and other public pressures, increasingly enterprises with more opportunities to establish relationships with
savvy young customers and export and sale to foreign foreign enterprises within the same supply chain [10]. However,
customers after its entry into the WTO [6] have led an exporting products or becoming suppliers of foreign customers in
China requires Chinese enterprises to address and overcome ‘green
barriers’ and increase their international competitive ability [11]. For
example, Bristol-Myers Squibb, IBM and Xerox have encouraged
1 As defined by Pollution Prevention World Information Net- their Chinese suppliers to develop environmental management sys-
work, SCM is the oversight of materials, information and financial tems (EMS) in compliance with ISO 14001, while Ford, GM and
flows inside and outside an organization. Flows move from supplier Toyota have required their Chinese suppliers to be certified with
to manufacturer to wholesaler to retailer to consumer. SCM is con- ISO 14001 [12].
cerned with planning, implementing and controlling the flows of raw 3 When we speak of GSCM practices in this paper, we speak
materials, inventory and finished goods from the point of origin to about the extent of their adoption by a particular firm in terms of
the point of consumption, and covers purchasing, the manufacturing its stage of adoption, not considering the practice to implementing
process and customer delivery. successfully.
 Q. Zhu et al. / Omega 36 (2008) 577 – 591 579

2. Theoretical development ing suppliers with design specifications incorporating

environmental requirements for purchased items, coop-
2.1. GSCM practices eration with suppliers for environmental objectives, en-
vironmental audits for supplier’s internal management
2.1.1. Background on GSCM and suppliers’ ISO 14001 certification. Investigating the
GSCM is designed to incorporate environmental determinants of ER factors in the US, Min and Galle
considerations into decision making at each stage of [18] found that organizational size (number of employ-
an organization’s materials management and logistics ees), regulatory pressures, source reduction policies
functions through post-consumer disposal [8,9]. Defi- and high environmental costs played a significant role
nitions vary. In some cases, GSCM has been defined as in the adoption of green purchasing practices.
a simple green purchasing relationship between a buyer Downstream factors include green outbound logistics
and vendor. In other cases more extensive concepts of with activities such as distribution and marketing com-
‘closed-loop’ supply chains are employed which con- ponents of a product or organization’s supply chain [20].
sider GSCM to be an unending logistics cycle of ma- Researchers have found supply chain customer–supplier
terials and products use, reuse and management from relationships and collaboration around environmental
both an inter- and intra-organizational perspective [9]. issues to be significant in environmental practice adop-
tion and performance in the US [21] and Southeast
2.1.2. GSCM component factors relevant to the Asia [22].
present study Environmental pressures from customers and down-
The present study focuses on three GSCM factors in stream foreign enterprises are especially acute in China,
the context of emerging Chinese manufacturing firms, leading Chinese enterprises to self-regulate [6]. For
with each factor representing the extent to which the example, leading firms from developed countries evalu-
firm engages in the practice. These include (a) external ate not only their direct suppliers but also the suppliers
GSCM relationship factors (ER) which include exter- of these suppliers.5 Also, even though green pur-
nal inbound/outbound logistical environmental manage- chasing behaviors of Chinese consumers lag those of
ment linkages, (b) eco-design (ECO) factors associated American consumers [24], younger Chinese consumers
with internal and external collaboration for product and are developing an increasingly heightened environmen-
process design and (c) IR factors which center on ele- tal awareness and prefer ‘green’ products [25]. Finally,
ments of ‘closing the loop’, reverse logistics and reuse with the introduction of The Waste Electrical and Elec-
or recycling of materials.4 tronic Equipment Regulations in the European Union
These factors are representative of three key temporal (WEEE)-like regulations in China, manufacturers of
phases of SCM and organizational logistics operations electronic products to be sold in China must use mate-
[14]. Pre-SCM operation and performance, for example, rials that are easily recyclable, do not waste resources,
depends on internal and external product and process have labeling that must include the materials content,
designs [15]. Likewise, external factors are related to the toxic content and where the product was made.
cooperative operations of the supply chain incorporat- Not only do Chinese manufacturers have to worry
ing acquisition of materials and components to delivery about international customers’ regulatory environment,
of products and materials [16], while post-operational but now suppliers to these manufacturers face similar
considerations are reflected in IR practices [17]. We now concerns when doing business in China.
further explain each of these major logistics practices
within a GSCM context and their growing importance 2.1.2.2. Eco-design (ECO). Early eco-design work
in Chinese manufacturing enterprises. focused primarily on technical improvements to prod-
ucts and processes to mitigate environmental costs.
2.1.2.1. External GSCM relationship factors (ER). ER Recognition that more substantial improvements are
factors in GSCM can include both upstream and down- possible only when design factors outside of the direct
stream factors external to the organization’s operational control of producers, including relationships with sup-
boundaries. Upstream factors include such inbound pliers, consumers, recyclers and governmental authori-
logistics activities as green purchasing and vendor man- ties, are included for eco-design to become an integral
agement [18,19]. For example, items include provid- GSCM practice [26,27].

4 Further validation of these and other factors in our study 5 About 20 billion US dollars of commodities were rejected
appears below. from 1997 to 1999 due to green barriers to Chinese exports [23].
580 Q. Zhu et al. / Omega 36 (2008) 577 – 591

The success of eco-design requires internal cross- levying taxes for some resources such as coal and
functional cooperation among intra-organizational units natural gas, leading to a recent renewal of interest in
within a company as well as cooperation with outside IR practices.
partners throughout the supply chain. Studies in the Having reviewed the three main GSCM practices that
US support this position especially for product-design- underlie our investigation, and having emphasized their
based integration of suppliers into the green supply importance in the Chinese context, we turn now to or-
chain to meet the specific supply chain environmen- ganizational determinants of these practices.
tal design requirements [28].6 To further support eco-
design’s integral linkage to GSCM practice, the U.S. 2.1.3. Organizational determinants of GSCM practices
Environmental Protection Agency’s program has green in the Chinese context
supply chains as a core aspect of their design for the The two organizational determinants of the ex-
environment programs. tent of GSCM practices we investigate are organiza-
Chinese organizations are also subject to eco-design tional learning from past experience and management
requirements in their role as supply chain partners, es- support.
pecially given the pressure for international regulatory
compliance. A major portion of the supply chain for 2.1.3.1. Organizational learning as a determinant of
electronics products sold on the European market is lo- GSCM practices. In the resource-based theory of the
cated in China. Hence, Chinese companies have to com- firm, in an economic system characterized by market
ply with European legislation, such as materials bans imperfections, the combinations of firm resources and
and design requirements to serve the European market capabilities, especially those that are valuable, rare,
successfully. inimitable and hard to substitute, are seen as key con-
tributors to distinctive competencies and sustainable
2.1.2.3. Investment recovery (IR). IR refers to an or- competitive advantage vis-à-vis the firm’s rivals [36].
ganization’s strategic use of recycling, redeployment, Successful competitive strategies and outcomes (in-
reselling and similar techniques to derive greater value cluding those in the environmental area [37]) depend
from materials and products. IR seeks to turn surplus as- on the development, effective deployment and mainte-
sets into revenue by selling idle assets, reducing storage nance of these resources and capabilities over time.
space and deploying idle assets to other corporate loca- Organizational learning systems can be viewed
tions to avoid purchasing additional equipment or ma- as an especially important capability within this
terials [30]. Out-of-service equipment, excess inventory resource-based framework since, especially when cou-
or raw materials, waste and process by-products and pled with an organizational emphasis on continuous
demolished facilities are included in these non-working improvement,7 they can help organizations build from
assets [31]. more basic ‘complementary capabilities’ such as those
IR can be legitimately viewed as both an econom- associated with ISO 9000 and TQM systems experi-
ically and environmentally beneficial practice. Cottrill ence, for example, to more complex systems (especially
[31] argues that at least 70% of every sales dollar gener- in terms of higher-order learning proficiencies) such
ated by IR becomes part of profit, and this appears to be as TQEM, EMS, ISO 14001 and eventually GSCM
true in industries as diverse as computer assets, chem- practices [40,41].
icals, forest products, power generators, healthcare and Organizational learning systems facilitate the intelli-
consumer products [17,31–33]. IR practices are central gent and complementary deployment of a firm’s existing
to a number of reverse logistics practices such as recla- resources and capabilities to affect a desired end. This
mation, remanufacturing, recycling and reuse [34].
IR systems in China have received less attention 7 The literature shows that continuous improvement concepts
than in developed countries such as the US and Ger-
ingrained in organizations and part of pervasive and strategic quality
many due to less enlightened waste management management programs such as total quality management (TQM)
policies and the lack of closed-loop systems infras- and ISO 9001 certification are critical elements of organizational
tructure [35]. However, pressures from the govern- learning [38]. The cyclical aspect of continuous improvement and
ment have shifted focus from resource subsidies to the various philosophical elements of TQM and ISO 9000 (e.g., team
focus, empowerment, benchmarking) are central to integrating new
knowledge into organizations. Also, EMS, especially ISO 14001,
6 An example is DaimlerChrysler’s CS-9003 standard for envi- which is based on the ISO 9000 framework, have had this continuous
ronmental design, which required 20% recycled content in plastic improvement (and thus organizational learning) paradigm integrated
components starting with the 2000 model year [29]. into their requirements as well [39].
 Q. Zhu et al. / Omega 36 (2008) 577 – 591 581

deployment typically occurs through the development Collectively in China, ISO 9000 has been growing
of new organizational routines and activities across at an increasing rate. In 1997 China had approximately
functional departments via the development of coordi- 5000 ISO 9000 certified organizations, and 22 ISO
nation and skills [42] as necessitated by the organiza- 14001 certified organizations. According to the Inter-
tion’s unique structure, culture and product and process national Organization for Standardization (ISO) China,
innovations already in place [40]. GSCM practices are in a 2005 survey, is the number one country in ISO
especially amenable to the benefits derived from learn- 9001:2000 certificates, with approximately 143,823
ing because of their people-intensive nature and their certifications. The world total of ISO 14001 certificates
dependence upon tacit skill development via employee as of December 2005 was 111,162. China accounted for
involvement and coordination of team effort and shared 12,683 certified locations, only behind Japan [50]. This
expertise [40]. These work practices have a decentral- dramatic growth in adoption of these systems shows
ized and tacit aspect that makes them hard to duplicate that their influence could be very large in terms of
and thus especially valuable within the resource-based adoption of GSCM practices in China. Thus, the issue
framework [40,43]. Organizational learning builds of organizational learning systems in China, and their
from past experience with less complex systems. Using potential on GSCM practice adoption, is quite salient at
socially complex and intangible knowledge-based this time and will continue to be so for the foreseeable
processes [44], it taps the organization’s embedded ex- future [51].
pertise and permits the creation of congruence across Based on the preceding theoretical discussion and
the organization’s range of strategic, structural and review of empirical evidence we hypothesize that orga-
cognitive systems, arguably at lower cost. nizational learning will allow organizations to transfer
Russo and Fouts [37] suggest that organizational ca- existing expertise gleaned from experience with sys-
pabilities are closely tied to environmental performance, tems such as TQM, JIT and ISO 9000 generating
and that organizations possessing greater capabilities necessary momentum and encouraging greater com-
can more easily adopt proactive environmental man- mitment to GSCM practices. This leads to our first
agement practices. Other research supports the role of hypothesis:
organizational learning systems in particular promoting H1. The extent of GSCM practice engaged in by Chi-
higher levels of environmental capabilities by drawing nese organizations will be positively related to the level
on expertise developed earlier in basic levels of envi- of organizational learning capabilities.
ronmental management by developing or acquiring the
necessary socially complex or process-based resources 2.1.3.2. Management support and commitment as a de-
[37,41,45]. For example, Darnall and Edwards [44] find terminant of GSCM practices. In general, management
that organizations with existing pollution-prevention support is a critical element of adoption and imple-
activities and greater management system experience mentation of innovations in an organization, especially
are able to adopt EMS at lower cost. Sarkis and environmental systems [52]. Organizational innova-
Kitazawa [46] show how organizations that have expe- tions may remain stuck at the initial idea stage absent
rience with management systems like TQM and ISO dedicated champions [53]. Top management support
9000 are able to leverage their accumulated system- can affect new system initiatives success by promoting
based knowledge by successfully adopting an EMS. employee empowerment, by facilitating employee in-
Similarly, organizations have successfully capitalized volvement by promoting a cultural shift and increased
on their stock of pollution-prevention capabilities de- commitment by the organization’s employees [54], by
rived from earlier employee skill development and instituting rewards and incentives systems to affect em-
applied them to more advanced forms of environmental ployee behavior, by providing training and increasing
management [40,47]. communication across units and encouraging teams
The fact that Chinese organizations have quality and teamwork in the organization [55].
management experiences (for at least 20 years [48]) Research shows that cross-functional programs such
that far exceed their environmental management expe- as GSCM and TQM require senior management’s sup-
rience may help to provide learning that helps promote port for successful environmental management. In the
successful environmental management practice and as- case of TQM initiatives, support from an organization’s
sociated GSCM practice. Some Chinese organizations top management has been identified as a critical factor
have already tried to establish environmental manage- for successful implementation of TQM [54]. Likewise,
ment learning experiences from quality management to help ensure environmental progress, top management
programs such as ISO 9000 certification [49]. must be fully committed [56].
582 Q. Zhu et al. / Omega 36 (2008) 577 – 591

Previous research points to the efficacy of man- Table 1

agement support in other non-TQM organizational Distribution of survey respondent enterprises by industry and size
endeavors as well. Top management support has been Total Percentage
associated with the success of information technology
Industry
diffusion within organizations [57,58], business process
Automobile 62 19.7
reengineering [59], virtual enterprise formation [60], Electrical and electronic 18 5.7
environmental purchasing [61], ISO 14000 implemen- Chemical 38 12.1
tation [62], enterprise resource planning (ERP) [63] and Food 10 3.2
EMS [52]. The preceding literature indicates the value Iron and steel 11 3.5
Paper 7 2.2
of top management support in broad-based and perva-
Power generating 53 16.9
sive organizational efforts that are similar to GSCM. Other 27 8.6
Cross-functional efforts like GSCM are likely to benefit Manufacturing 47 15
too [61]. Like most other major environmental efforts, Textile 11 3.5
GSCM is a broad-based pervasive organizational en- None specified 30 9.6
deavor with cross-functional programs. As such, it has Total 314 100
the potential to benefit from top management support.
Size (employees)
It is not just top-level managers from whom sup- Category 1 152 48.4
port is needed, support from mid-level managers is also Category 2 35 11.1
important to successful implementation of environmen- Category 3 22 7
tal practices [61,64]. Support from middle-management Category 4 105 33.4
levels is important because environmental management Total 314 100
is related to almost all departments in an organiza-
tion, and cross-departmental cooperation is important
and follow-up phone calls to 1000 randomly se-
to successful practices [10]. Strong communication be-
lected Dalian manufacturers. Overall, a total of 314
tween business managers and environmental profession-
usable responses were received, tested and used in
als with management support is also necessary for ef-
the study.8
fective management of both business and environmen-
General industry characteristics of the respondents
tal issues [65]. Based on this literature, we now arrive
are shown in Table 1. As can be seen, the sample is
at our second hypothesis:
drawn from a representative range of 11 Chinese man-
H2. The extent of GSCM practice engaged in by Chi-
ufacturing industries.
nese organizations will be positively related to the level
of management support.
3.2. Operationalization of study variables
3. Methods
3.2.1. Dependent and independent variables
The three dimensions of GSCM practices (EF, IR,
3.1. Sample
ECO) and dimensions of organizational learning and
The data for this study were collected from Chinese
8 We conducted a chi-square test to compare organizational char-
manufacturing organizations in three phases. A pilot
acteristics of the two groups of respondent manufacturers, i.e., the
test validated the survey instrument design using 28 convenience samples and the mail survey samples. The test results
participants in two managerial workshops in the Tian- showed that no difference, at a 5% level of significance, existed
jin Economic and Technological Area (TEDA) and between the two groups on ownership, firm size and questionnaire
Dalian Economic and Technological Development responses. We then divided the 128 returned responses from the mail
Zone (DETDZ), the two largest industrial zones in surveys into two groups representing a proxy for ‘respondents’ and
‘non-respondents’, respectively. The first group included 82 com-
China. Then participants were sampled from the School pleted questionnaires which were returned within 2 weeks after the
of Management at Dalian University of Technology, mailing. The second group included 46 completed questionnaires
and triangulated with additional surveys based on which required follow-up telephone calls and returned after the cut-
interviews and site visits to the Dalian High-Tech off for the first mailing. We evaluated non-response bias using a
Zone in Liaoning province and the Zibo Industrial t-test to determine if there were significant differences in the mean
values of the GSCM practice factors and determinants between the
Zone in Shandong province to get 158 additional two groups. No differences were observed between the groups at the
responses. These were then supplemented by 128 p > 0.05 level for any of the factors, suggesting that non-response
usable responses received in response to a mailing bias is not a major problem in this study.
 Q. Zhu et al. / Omega 36 (2008) 577 – 591 583

Table 2
Descriptive statistics for factors used in study

Items N Mean S. dev.

Management support 305 0.000 1.000

Commitment of GSCM from senior managers 307 3.810 1.128
Support for GSCM from mid-level managers 310 3.600 1.037
Cross-functional cooperation for environmental improvements 308 3.630 1.058

External GSCM practices 268 0.000 1.000

Providing design specification to suppliers that include environmental requirements for purchased item 307 3.280 1.270
Cooperation with suppliers for environmental objectives 308 3.060 1.289
Environmental audit for suppliers’ internal management 300 2.740 1.314
Suppliers’ ISO 14000 certification 297 3.150 1.309
Second-tier supplier environmentally friendly practice evaluation 300 2.700 1.300
Cooperation with customer for eco-design 301 2.690 1.266
Cooperation with customers for cleaner production 296 3.040 1.226
Cooperation with customers for green packaging

Investment recovery 291 0.000 1.000

Investment recovery (sale) of excess inventories/materials 302 3.430 1.274
Sale of scrap and used materials 308 3.480 1.171
Sale of excess capital equipment 299 3.340 1.155

Eco-design 297 0.000 1.000

Design of products for reduced consumption of materials/energy 300 3.670 1.110
Design of products for reuse, recycle, recovery of materials, component parts 301 3.350 1.180
Design of products to avoid or reduce use of hazardous products and/or their manufacturing process 304 3.570 1.164

Organizational learning 275 0.000 1.000

ISO 9000 serial certification 303 4.080 1.142
Total quality management-type programs 308 3.850 1.056
Just-in-time systems implemented 291 3.210 1.275
Total quality environmental management 304 3.650 1.130
Environmental compliance and auditing programs 303 3.770 1.065
ISO 14001 certification 297 3.230 1.340
Environmental management systems exist 304 3.370 1.219

Regulation 299 0.000 1.000

Central governmental environmental regulations 314 4.610 0.694
Regional governmental regulations 313 4.410 0.792
Export countries environmental regulations 308 4.390 0.891
Products potentially conflict with laws 304 4.120 0.886

Market 291 0.000 1.000

Export 301 4.160 0.963
Sales to foreign customers 303 4.050 0.883
Chinese customers environmental awareness 307 4.140 0.852
Establishing company’s green image 313 4.340 0.812

Supplier 300 0.000 1.000

Suppliers’ advances in developing environmentally friendly goods 310 4.050 0.787
Environmental partnerships with suppliers 308 3.970 0.770
Suppliers’ advances in producing environmentally friendly packages 310 3.960 0.864

Cost pressure 305 0.000 1.000

Potential liability for disposal of hazardous materials 309 4.280 0.722
Cost for disposal of hazardous materials 311 4.130 0.850
Cost of environmentally friendly goods 311 4.020 0.780
Cost of environmentally friendly packages 310 3.920 0.797
584 Q. Zhu et al. / Omega 36 (2008) 577 – 591

Organizational
H1 (+)
Learning GSCM Practice
-External Activities
-Investment Recovery
H2 (+)
-Eco-Design
Management
Support

Controls
- Organization Size c
-Industry-level of Practice
-Regulatory Pressures
-Market Pressures
-Cost Pressures
-Supplier Pressures

Fig. 1. Theoretical model.

management support used in the study were developed tor by industry. These controls are necessary because
based on a careful review of GSCM practices, industrial firm activities are strongly dictated by industry structure
expert opinions and pilot tests and the relevant literature [68]. Also, within the same industry, institutional theory
(e.g., [19,28,66]) and are shown in Table 2. Measure- suggests that mimetic isomorphism (i.e., the imitation
ment items were put into a survey questionnaire em- resulting from firms’ modeling their practices on those
ploying a five-point Likert scale.9 of successful peers to enhance legitimacy) reduces vari-
ation among firms’ practices [69].11
3.2.2. Pressure control variables In addition to cost pressures identified in the litera-
Other determinants of the extent of GSCM practice ture as influencing the adoption and implementation of
for our three factors (ER, INV, ECO) which include ISO 14001 and GSCM practices [7,72], regulatory and
various regulatory, market and supplier pressures are market pressures have been shown to have a significant
based on the literature (e.g., [5,27,67]) using a five-point influence on firm’s environmental conduct in a number
Likert scale,10 validated earlier with the pilot tests. The of countries [45,73]. The Chinese government has been
items within each of the categories scores are shown in establishing stricter environmental regulations, promot-
Table 2. ing cleaner production and encouraging ISO 14001 cer-
tification [74]. Stakeholder pressures from stakehold-
3.2.3. Other control variables ers such as customers and suppliers may also influ-
We introduce a number of controls for our model ence firm environmental activities [75,76]. Research has
that relate the firm-level determinants of organizational documented the importance of customer pressures on
learning and management support to GSCM practices firm’s environmental conduct [6,44]. In China, these
(see Fig. 1). pressures from customers and downstream foreign en-
Controls for industry levels of GSCM practice were terprises are especially acute, leading Chinese firms to
obtained by taking the mean level of each relevant fac- self-regulate.

9 Scale used was (1 = not considering it, 2 = planning to con-

sider it, 3 = considering it currently, 4 = initiating implementation, 11 Bansal and Roth [70] found that imitation of rivals’ envi-
5 = implementing successfully). ronmental practices in the US has been the norm. Banerjee et al.
10 Respondents replied to a five-point Likert scale question on [71] likewise found that the importance of public concern, reg-
how much pressure they felt from each of the items (1 = not at ulatory forces, firm competitive advantage and top management
all, 2 = a little bit, 3 = to some degree, 4 = strong, 5 = extremely commitment—all variables of relevance to our study—was based on
strong). industry type.
 Q. Zhu et al. / Omega 36 (2008) 577 – 591 585

Finally, we control for organizational size since is given below and is estimated separately for ER, IR,
larger firms often have more financial resources to ECO as the relevant GSCM practice:
handle environmental issues. Others have posited that
what may work for large enterprises may not work GSCM practice level
for smaller enterprises and this may explain differing = 0 + 1 management support
practices between them [77].12 In one of the few
+ 2 organizational learning
studies on Asian and Chinese environmental prac-
tices, Barnzei and Vertinsky found that firm size had + 3 organization size + 4 regulation pressure
a small positive influence on ‘eco-sustainability’ ori- + 5 market pressure + 6 supplier pressure
entation [78]. Organizational size in our study was + 7 cost pressure
operationalized by categorizing level of employment + 8 industry level of GSCM practice + error.
into range groupings based on the following ranges:
> 8000, 3000–8000, 1000–3000, 500–1000, 100–500
and < 100 employees. 4. Results and discussion

3.3. Factor validation 4.1. Results

Before testing the hypotheses and introducing our The OLS hierarchical regression results are displayed
model, we examine the validity of the measurement in Tables 4a–c.
properties of the latent constructs used in this study. The hierarchical regression models are executed in
As the constructs were mainly adopted from past re- four steps. In Step 1, the GSCM practice is regressed
search and they have clear factor structure, we per- only against the control variables. In Step 2, both in-
formed confirmatory factor analysis (CFA) with AMOS dependent variables, i.e., management support and or-
to validate their measurement properties. CFA were per- ganization learning are introduced, while Step 3 shows
formed separately with three sets of constructs in our the model only with management support and Step 4
regression model, namely, the independent variables shows the model only with organizational learning.
(i.e., management support, organizational learning), the Across all three tables, we observe that the model
dependent variables (i.e., external GSCM practices, IR, F values are all highly significant, indicating overall
eco-design) and the control variables (i.e., regulation, model significance, and the adjusted R 2 values increase
market pressure, supplier pressure and cost pressure). dramatically when the independent variables are intro-
All the measurement items were forced to load onto and duced in Steps 2, 3 or 4 relative to Step 1 when only the
were allowed to correlate to other factors in their cor- control variables are in the model. This result shows
responding factor in the CFA. The results of the CFA the additional explanatory power of organizational
are presented in Table 3. All the measurement items had support and learning in explaining the GSCM practice
a reasonably high and significant loading with t-value under consideration in the particular model. Based on
greater than 2.0 on their respective factors, with the low- the significance tests, both H1 (which hypothesized that
est loading being 0.45 and the highest being 0.92. The GSCM practice would be positively related to organiza-
results lend support to the convergent validity and uni- tion learning) and H2 (which hypothesized that GSCM
dimensionality of the latent constructs and substantiate practice would be positively related to management
their measurement properties. support) are supported. The support is more significant
for EF and ECO; IR’s relationship with organizational
3.4. Model specification learning is less so. The only significant control vari-
ables in any of the relationships were cost pressures
Our hypotheses are tested using standard hierar- and industry average level of the corresponding GSCM
chical multiple regression models employing ordinary practice. For EF, industry average level of the practice
least squares (OLS) estimation. The estimation model was quite significant showing a strong relationship be-
tween the EF practice of an industry and within the
firm. For IR we observe that there is a slight cost pres-
12 Sharma [79] found that environmental strategy and organiza-
sure relationship initially before introduction of the
tional size have had strong relationships. King and Lenox [80] found
that larger firms participated more in the responsible care voluntary
determinant variables, industry average was significant
program. Russo and Fouts [37] found that larger firms performed for IR. The final GSCM practice (ECO) did not have a
better on environmental performance. significant relationship with any of its control variables.
586 Q. Zhu et al. / Omega 36 (2008) 577 – 591

Table 3
Results of confirmatory factor analysis for factors

Completely Standard t-Values

standardized error
loading ()

Independent structure (2 = 214.331; df = 34; CFI = 0.92; NFI = 0.91; TLI = 0.87; RMR = 0.114)

Management support ( = 0.919)

Commitment of GSCM from senior managers 0.903 0.054 20.970
Support for GSCM from mid-level managers 0.924 0.048 21.979
Cross-functional cooperation for environmental improvements 0.850 – –

Organizational learning ( = 0.885)

ISO 9000 serial certification 0.445 0.063 7.908
Total quality management-type programs 0.708 0.051 14.151
Just-in-time systems implemented 0.533 0.068 9.689
Total quality environmental management 0.912 0.048 20.791
Environmental compliance and auditing programs 0.824 0.048 17.589
ISO 14001 certification 0.744 0.063 15.386
Environmental management systems exist 0.845 – –

Dependent structure (2 = 363.450; df = 74; CFI = 0.88; NFI = 0.86; TLI = 0.83; RMR = 0.100)

External GSCM practices ( = 0.909)

Providing design specification to suppliers that include environmental requirements for purchased item 0.702 0.072 12.493
Cooperation with suppliers for environmental objectives 0.752 0.072 13.587
Environmental audit for suppliers’ internal management 0.756 0.074 13.658
Suppliers’ ISO 14000 certification 0.681 0.075 12.011
Second-tier supplier environmentally friendly practice evaluation 0.767 0.072 13.999
Cooperation with customer for eco-design 0.753 0.067 14.250
Cooperation with customers for cleaner production 0.781 0.065 14.934
Cooperation with customers for green packaging 0.796 – –

Investment recovery ( = 0.832)

Investmentrecovery (sale) of excess inventories/materials 0.828 – –
Sale of scrap and used materials 0.827 0.069 13.364
Sale of excess capital equipment 0.710 0.067 11.721

Eco-design ( = 0.864)
Design of products for reduced consumption of materials/energy 0.817 0.059 15.421
Design of products for reuse, recycle, recovery of material, component parts 0.795 0.061 15.305
Design of products to avoid or reduce use of hazardous products and/or their manufacturing process 0.860 – –

Control structure (2 = 410.085; df = 84; CFI = 0.84; NFI = 0.85; TLI = 0.78; RMR = 0.101)

Regulation ( = 0.768)
Central governmental environmental regulations 0.732 0.100 9.151
Regional governmental regulations 0.672 0.112 8.602
Export countries environmental regulations 0.672 0.116 9.340
Products potentially conflict with laws 0.625 – –

Market ( = 0.738)
Export 0.662 0.128 8.994
Sales to foreign customers 0.696 0.116 9.565
Chinese customers environmental awareness 0.578 0.101 8.852
Establishing company’s green image 0.690 – –

Supplier ( = 0.818)
Suppliers’ advances in developing environmentally friendly goods 0.800 0.058 14.966
Environmental partnerships with suppliers 0.696 0.063 11.906
Suppliers’ advances in producing environmentally friendly packages 0.841 – –
 Q. Zhu et al. / Omega 36 (2008) 577 – 591 587

Table 3 (continued)

Completely Standard t-Values

standardized error
loading ()

Cost pressure ( = 0.808)

Potential liability for disposal of hazardous materials 0.466 – –
Cost for disposal of hazardous materials 0.681 0.230 7.488
Cost of environmentally friendly goods 0.853 0.249 7.968
Cost of environmentally friendly packages 0.893 0.263 8.080

4.2. Discussion and implications Our study focuses on the variables that firms can
actually control (i.e., internal management support and
Recent studies have shown that a majority of the organizational learning programs) rather than external
world’s manufacturing will be completed in Asia in the determinants such as regulatory, industry and other pres-
next couple of decades. China, in particular, offers an sures. Capitalizing on learning and support functions
ideal setting for studying the formation of green strate- leverages the ability of domestic Chinese enterprises
gies because the rapid economic growth relied on exten- to self-regulate in terms of environmental performance
sive expansion of production that had correspondingly compared to their international partners or rivals within
high consumption of energy and natural resources. China. Chinese manufacturers can learn from these re-
Chinese organizations continue to struggle to improve sults in developing management approaches relevant to
their environmental image through cleaner production GSCM and environmental management. Proactive Chi-
and EMS—investment in environmental protection ac- nese government policies and pressure from foreign
counted for almost 1% of GDP in 1999 and is growing partners in the supply chain, and from other important
[81]. The current corporate focus in China seeks to customers domestically and overseas, can also pressure
develop systematic and integrated approaches to en- Chinese firms into using these practices.
vironmental management such as industrial ecology Our finding that programmatic organizational learn-
and GSCM for moving towards closed-loop or cyclical ing is strongly related to the extent of use of all the
industrial systems [82]. Yet, despite these develop- GSCM practices shows that learning and continuous
ments, the adoption of GSCM practices in China still improvement programs are clearly valuable comple-
lags the adoption rates of the more developed countries mentary activities for GSCM practice. Thus, instilling
[10]. GSCM is still a new concept in China as Chi- these practices in organizations should be encouraged
nese companies change their environmental focus from internally, but also something that government poli-
single-plant improvements to whole supply chains. cies can spotlight. The dramatic growth and success in
Zhu and Sarkis [7] showed that the adoption of government initiatives in helping Chinese firms obtain
GSCM practices for Chinese manufacturers have had ISO 9001 and ISO 14001 certification should provide
a significant positive influence on the environmental, encouragement for the promotion of GSCM practices.
economic and organizational performance of these or- Our research also provides some initial evidence on
ganizations. Since such win–win opportunities do exist the importance of pressure from regulators, suppliers
when these practices are adopted, it is important to and customers in the context of GSCM practices in an
study the determinants of GSCM practice adoption as emerging market. While we did not find these pressures
we do in this paper. Some Chinese enterprises have to be significant in our sample, they bear investigation
recognized the importance of GSCM and other envi- in future studies given their importance in stakeholder
ronmental management practices, but most of these theory. Finally, from the perspective of institutional the-
enterprises may lack experience as well as necessary ory, our findings of positive significant impacts of in-
tools and management skills [83]. The findings in dustry levels of environmental practice in two of our
our work draw on the experience of Chinese manu- three models suggest that future research may use in-
facturing enterprise managers to shed some light on stitutional theory [69] as a relevant lens for analyzing
what may and may not work for more extensive adop- environmental behavior in emerging markets.
tion of GSCM practices, and highlighting the impor- As an international manufacturing powerhouse, in-
tance of learning-oriented programs and management bound materials and outbound manufactured products
support. handled in China are voluminous and are expected to
588 Q. Zhu et al. / Omega 36 (2008) 577 – 591

Table 4
Hierarchical regression with (a) external GSCM practices as dependent variable, (b) investment recovery as dependent variable and (c) eco-
design as dependent variable

Variable entered Step 1 Step 2 Step 3 Step 4

(a) Independent variables

Management support 0.250∗∗∗ 0.520∗∗∗
Organizational learning 0.365∗∗∗ 0.556∗∗∗

Controls
Size 0.048 0.072 0.073 0.066
Regulation 0.074 0.017 0.046 0.008
Market −0.011 −0.038 −0.030 −0.039
Supplier 0.074 0.064 0.037 0.086
Cost pressure 0.066 −0.020 0.019 −0.031
Industry external GSCM practices 0.288∗∗∗ 0.176∗∗∗ 0.190∗∗∗ 0.188∗∗∗

F for the regression 6.488∗∗∗ 26.918∗∗∗ 24.851∗∗∗ 27.835∗∗∗

R 2 (adjusted) 0.095 0.398 0.348 0.375

(b) Independent variables

Management support 0.208∗∗ 0.333∗∗∗
Organizational learning 0.166∗ 0.328∗∗∗

Controls
Size −0.055 −0.039 −0.039 −0.044
Regulation 0.034 −0.002 0.012 −0.009
Market 0.075 0.068 0.071 0.066
Supplier −0.024 −0.039 −0.051 −0.020
Cost pressure 0.118a 0.071 0.088 0.061
Industry investment recovery 0.143∗ 0.130∗ 0.131∗ 0.134∗

F for theregression 0.068∗∗ 8.023∗∗∗ 8.521∗∗∗ 8.108∗∗∗

R 2 (adjusted) 0.038 0.152 0.144 0.137

(c) Independent variables

Management support 0.362∗∗∗ 0.558∗∗∗
Organizational learning 0.261∗∗∗ 0.537∗∗∗

Controls
Size −0.060 −0.051 −0.051 −0.054
Regulation 0.048 −0.002 0.019 −0.016
Market 0.013 −0.010 −0.005 −0.010
Supplier 0.027 0.012 −0.006 0.042
Cost pressure 0.108a 0.021 0.048 0.008
Industry eco-design 0.152∗∗ 0.041 0.041 0.073

F for the regression 2.918∗∗ 22.106∗∗∗ 22.579∗∗∗ 20.135∗∗∗

R 2 (adjusted) 0.035 0.350 0.326 0.300

Main table contains standardized coefficient betas.

a p < 0.10; ∗ p < 0.05; ∗∗ p < 0.01; ∗∗∗ p < 0.001.

grow. To meet the escalating environmental require- with suppliers and forward coordination with customers
ments of the international community, there is pressure in the supply chain. Participation by different logistics
for Chinese manufacturers to embrace GSCM practices partners is necessary to ensure that the manufactured
in their manufacturing operations and logistics activi- products are specifically designed, produced, packaged
ties. The GSCM practices examined in this study should and delivered to meet the environmental objectives de-
not be confined to manufacturing operations. Rather, sired in the supply chain. Effective implementation of
careful attention should be paid to logistics management the GSCM practices on IR and eco-design also needs
issues. For instance, successful implementation of ex- such logistics management considerations. Alterna-
ternal GSCM practices requires backward coordination tively, a logistics system relies on various resources
 Q. Zhu et al. / Omega 36 (2008) 577 – 591 589

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