IDEAS home Printed from https://ideas.repec.org/a/bla/bstrat/v31y2022i7p3014-3027.html
   My bibliography  Save this article

Environmentally sustainable development initiatives in upstream strategic outsourcing relationships: Examining the role of innovative capabilities

Author

Listed:
  • Nisha Paul Kulangara
  • Markus Biehl
  • Edmund L. Prater

Abstract

Research on the potential impact of environmental sustainable development initiatives such as environmental collaboration with the supplier (ECS) on environmental and manufacturing performance is inconclusive. Specifically, it has overlooked the intermediary role that dynamic capabilities play in the relationship between ECS and performance. This explains why previous research, while correct in theory, found conflicting statistical results between environmental collaboration upstream and various performance outcomes. This study examines the following questions: What is the impact of environmental collaboration on manufacturing and environmental performance in outsourcing relationships? Do capabilities mediate the relationship between environmental collaboration and performance? Further, we propose that one particular mediating factor—innovative capabilities (ICs)—can influence the strength of this relationship and thus explain why previous research found conflicting statistical results. This paper uses structural equation modeling to analyze survey data from 247 North American manufacturers that outsourced their manufacturing. IC fully mediates the relationship between ECS and manufacturing performance and partially mediates the relationship between environmental collaboration and environmental performance. These findings enrich existing knowledge as it views ECS through the lens of resource‐based theory. Further, we shed light on the crucial role of IC in firms that choose to outsource critical capabilities. From a managerial perspective, the empirical results will inform outsourcing managers making strategic and tactical decisions to achieve desired environmental and manufacturing outcomes.

Suggested Citation

  • Nisha Paul Kulangara & Markus Biehl & Edmund L. Prater, 2022. "Environmentally sustainable development initiatives in upstream strategic outsourcing relationships: Examining the role of innovative capabilities," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 3014-3027, November.
    • Handle: RePEc:bla:bstrat:v:31:y:2022:i:7:p:3014-3027
    DOI: 10.1002/bse.3061
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/bse.3061
    Download Restriction: no
    File URL: https://libkey.io/10.1002/bse.3061?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Beske, Philip & Land, Anna & Seuring, Stefan, 2014. "Sustainable supply chain management practices and dynamic capabilities in the food industry: A critical analysis of the literature," International Journal of Production Economics, Elsevier, vol. 152(C), pages 131-143.
    2. Berchicci, L. & King, A.A., 2007. "Postcards from the Edge: A Review of the Business and Environment Literature," ERIM Report Series Research in Management ERS-2007-085-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    3. Christoph G. Schmidt & Kai Foerstl & Birte Schaltenbrand, 2017. "The Supply Chain Position Paradox: Green Practices and Firm Performance," Journal of Supply Chain Management, Institute for Supply Management, vol. 53(1), pages 3-25, January.
    4. Huang, Shi-Ming & Ou, Chin-Shyh & Chen, Chyi-Miaw & Lin, Binshan, 2006. "An empirical study of relationship between IT investment and firm performance: A resource-based perspective," European Journal of Operational Research, Elsevier, vol. 173(3), pages 984-999, September.
    5. Gölgeci, Ismail & Gligor, David M. & Tatoglu, Ekrem & Arda, Ozlem Ayaz, 2019. "A relational view of environmental performance: What role do environmental collaboration and cross-functional alignment play?," Journal of Business Research, Elsevier, vol. 96(C), pages 35-46.
    6. George Onofrei & Hung M. Nguyen & Min Zhang & Brian Fynes, 2020. "Building supply chain relational capital: The impact of supplier and customer leveraging on innovation performance," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 3422-3434, December.
    7. Rosa Maria Dangelico & Devashish Pujari & Pierpaolo Pontrandolfo, 2017. "Green Product Innovation in Manufacturing Firms: A Sustainability‐Oriented Dynamic Capability Perspective," Business Strategy and the Environment, Wiley Blackwell, vol. 26(4), pages 490-506, May.
    8. Shaorui Li & Vaidyanathan Jayaraman & Antony Paulraj & Kuo-chung Shang, 2016. "Proactive environmental strategies and performance: role of green supply chain processes and green product design in the Chinese high-tech industry," International Journal of Production Research, Taylor & Francis Journals, vol. 54(7), pages 2136-2151, April.
    9. Cristina Gimenez & Vicenta Sierra, 2013. "Sustainable Supply Chains: Governance Mechanisms to Greening Suppliers," Journal of Business Ethics, Springer, vol. 116(1), pages 189-203, August.
    10. Wang, Guangping & Dou, Wenyu & Zhu, Weichun & Zhou, Nan, 2015. "The effects of firm capabilities on external collaboration and performance: The moderating role of market turbulence," Journal of Business Research, Elsevier, vol. 68(9), pages 1928-1936.
    11. Rameshwar Dubey & Angappa Gunasekaran & Anindya Chakrabarty, 2015. "World-class sustainable manufacturing: framework and a performance measurement system," International Journal of Production Research, Taylor & Francis Journals, vol. 53(17), pages 5207-5223, September.
    12. Raphael Amit & Paul J. H. Schoemaker, 1993. "Abstract," Strategic Management Journal, Wiley Blackwell, vol. 14(1), pages 33-46, January.
    13. Kumar, Gopal & Subramanian, Nachiappan & Maria Arputham, Ramkumar, 2018. "Missing link between sustainability collaborative strategy and supply chain performance: Role of dynamic capability," International Journal of Production Economics, Elsevier, vol. 203(C), pages 96-109.
    14. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    15. Abraham Carmeli & Asher Tishler, 2004. "Resources, capabilities, and the performance of industrial firms: A multivariate analysis," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 25(6-7), pages 299-315.
    16. Min Zhang & Fiona Lettice & Xiande Zhao, 2015. "The impact of social capital on mass customisation and product innovation capabilities," International Journal of Production Research, Taylor & Francis Journals, vol. 53(17), pages 5251-5264, September.
    17. Ruiqian Li & Ramakrishnan Ramanathan, 2020. "Can environmental investments benefit environmental performance? The moderating roles of institutional environment and foreign direct investment," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 3385-3398, December.
    18. Rosa Maria Dangelico, 2015. "Improving Firm Environmental Performance and Reputation: The Role of Employee Green Teams," Business Strategy and the Environment, Wiley Blackwell, vol. 24(8), pages 735-749, December.
    19. Naimatullah Shah & Bahadur Ali Soomro, 2021. "Internal green integration and environmental performance: The predictive power of proactive environmental strategy, greening the supplier, and environmental collaboration with the supplier," Business Strategy and the Environment, Wiley Blackwell, vol. 30(2), pages 1333-1344, February.
    20. Koufteros, Xenophon & Marcoulides, George A., 2006. "Product development practices and performance: A structural equation modeling-based multi-group analysis," International Journal of Production Economics, Elsevier, vol. 103(1), pages 286-307, September.
    21. Andrew King & Michael Lenox, 2002. "Exploring the Locus of Profitable Pollution Reduction," Management Science, INFORMS, vol. 48(2), pages 289-299, February.
    22. William Q. Judge & Thomas J. Douglas, 1998. "Performance Implications of Incorporating Natural Environmental Issues into the Strategic Planning Process: An Empirical Assessment," Journal of Management Studies, Wiley Blackwell, vol. 35(2), pages 241-262, March.
    23. Waqar Ahmed & Muhammad Saeed Ashraf & Sharfuddin Ahmed Khan & Simonov Kusi-Sarpong & Francis Kow Arhin & Horsten Kusi-Sarpong & Arsalan Najmi, 2020. "Analyzing the impact of environmental collaboration among supply chain stakeholders on a firm’s sustainable performance," Operations Management Research, Springer, vol. 13(1), pages 4-21, June.
    24. Nadia Zahoor & Ali Meftah Gerged, 2021. "Relational capital, environmental knowledge integration, and environmental performance of small and medium enterprises in emerging markets," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 3789-3803, December.
    25. Birger Wernerfelt, 1995. "The resource‐based view of the firm: Ten years after," Strategic Management Journal, Wiley Blackwell, vol. 16(3), pages 171-174.
    26. Vachon, Stephan & Klassen, Robert D., 2008. "Environmental management and manufacturing performance: The role of collaboration in the supply chain," International Journal of Production Economics, Elsevier, vol. 111(2), pages 299-315, February.
    27. Shang, Kuo-chung & Marlow, Peter B., 2005. "Logistics capability and performance in Taiwan's major manufacturing firms," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 41(3), pages 217-234, May.
    28. Andy A. Tsay & John V. Gray & In Joon Noh & Joseph T. Mahoney, 2018. "A Review of Production and Operations Management Research on Outsourcing in Supply Chains: Implications for the Theory of the Firm," Production and Operations Management, Production and Operations Management Society, vol. 27(7), pages 1177-1220, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kumar, Gopal & Subramanian, Nachiappan & Maria Arputham, Ramkumar, 2018. "Missing link between sustainability collaborative strategy and supply chain performance: Role of dynamic capability," International Journal of Production Economics, Elsevier, vol. 203(C), pages 96-109.
    2. Ammar Masood & Mohsin Altaf & Mohsin Raza Khan & Tanveer Illahi & Abdul Qayyum, 2021. "Industrial Environmental Performance: Mapping And Systematic Literature Review," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 10(4), pages 76-100, December.
    3. Ardian Qorri & Saranda Gashi & Andrzej Kraslawski, 2021. "Performance outcomes of supply chain practices for sustainable development: A meta‐analysis of moderators," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(1), pages 194-216, January.
    4. Tiberius, Victor & Stiller, Laura & Dabić, Marina, 2021. "Sustainability beyond economic prosperity: Social microfoundations of dynamic capabilities in family businesses," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    5. Su‐Yol Lee & Robert D. Klassen, 2016. "Firms’ Response to Climate Change: The Interplay of Business Uncertainty and Organizational Capabilities," Business Strategy and the Environment, Wiley Blackwell, vol. 25(8), pages 577-592, December.
    6. Suicheng Li & Jianqi Qiao & Hecheng Cui & Shuang Wang, 2020. "Realizing the Environmental Benefits of Proactive Environmental Strategy: The Roles of Green Supply Chain Integration and Relational Capability," Sustainability, MDPI, vol. 12(7), pages 1-18, April.
    7. Suhong Li & Thomas Ngniatedema & Fang Chen, 2017. "Understanding the Impact of Green Initiatives and Green Performance on Financial Performance in the US," Business Strategy and the Environment, Wiley Blackwell, vol. 26(6), pages 776-790, September.
    8. Garcés-Ayerbe, Concepción & Cañón-de-Francia, Joaquín, 2017. "The Relevance of Complementarities in the Study of the Economic Consequences of Environmental Proactivity: Analysis of the Moderating Effect of Innovation Efforts," Ecological Economics, Elsevier, vol. 142(C), pages 21-30.
    9. Nadia Zahoor & Yong Kyu Lew, 2022. "Sustaining superior international performance: Strategic orientations and dynamic capability of environmentally concerned small‐ and medium‐sized enterprises," Business Strategy and the Environment, Wiley Blackwell, vol. 31(3), pages 1002-1017, March.
    10. Anne Norheim-Hansen, 2018. "The Virtues of Green Strategies: Some Empirical Support from the Alliance Context," Journal of Business Ethics, Springer, vol. 151(4), pages 1161-1173, September.
    11. Vasileiou, Efi & Georgantzis, Nikolaos & Attanasi, Giuseppe & Llerena, Patrick, 2022. "Green innovation and financial performance: A study on Italian firms," Research Policy, Elsevier, vol. 51(6).
    12. Yang, Ching-Chiao & Marlow, Peter B. & Lu, Chin-Shan, 2009. "Assessing resources, logistics service capabilities, innovation capabilities and the performance of container shipping services in Taiwan," International Journal of Production Economics, Elsevier, vol. 122(1), pages 4-20, November.
    13. Liu, Yang & Zhu, Qinghua & Seuring, Stefan, 2017. "Linking capabilities to green operations strategies: The moderating role of corporate environmental proactivity," International Journal of Production Economics, Elsevier, vol. 187(C), pages 182-195.
    14. Graham, Stephanie, 2018. "Antecedents to environmental supply chain strategies: The role of internal integration and environmental learning," International Journal of Production Economics, Elsevier, vol. 197(C), pages 283-296.
    15. Heldt, Lisa & Beske-Janssen, Philip, 2023. "Solutions from space? A dynamic capabilities perspective on the growing use of satellite technology for managing sustainability in multi-tier supply chains," International Journal of Production Economics, Elsevier, vol. 260(C).
    16. Lorenzo Ardito & Rosa Maria Dangelico, 2018. "Firm Environmental Performance under Scrutiny: The Role of Strategic and Organizational Orientations," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 25(4), pages 426-440, July.
    17. Maria Jell‐Ojobor & Aveed Raha, 2022. "Being good at being good—The mediating role of an environmental management system in value‐creating green supply chain management practices," Business Strategy and the Environment, Wiley Blackwell, vol. 31(5), pages 1964-1984, July.
    18. MALEN, Joel & YAMANOI, Junichi, 2016. "Environmental regulation and international expansion of MNEs : The moderating role of pollution reduction resources and firm multinationality on location choice," IIR Working Paper 16-13, Institute of Innovation Research, Hitotsubashi University.
    19. Naimatullah Shah & Bahadur Ali Soomro, 2021. "Internal green integration and environmental performance: The predictive power of proactive environmental strategy, greening the supplier, and environmental collaboration with the supplier," Business Strategy and the Environment, Wiley Blackwell, vol. 30(2), pages 1333-1344, February.
    20. Mangla, Sachin Kumar & Luthra, Sunil & Rich, Nick & Kumar, Divesh & Rana, Nripendra P. & Dwivedi, Yogesh K., 2018. "Enablers to implement sustainable initiatives in agri-food supply chains," International Journal of Production Economics, Elsevier, vol. 203(C), pages 379-393.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:bstrat:v:31:y:2022:i:7:p:3014-3027. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1099-0836 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.