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Impact of lean manufacturing and environmental management on business performance: An empirical study of manufacturing firms

  • Yang, Ma Ga (Mark)
  • Hong, Paul
  • Modi, Sachin B.
Registered author(s):

    This paper explores relationships between lean manufacturing practices, environmental management (e.g., environmental management practices and environmental performance) and business performance outcomes (e.g., market and financial performance). The hypothesized relationships of this model are tested with data collected from 309 international manufacturing firms (IMSS IV) by using AMOS. The findings suggest that prior lean manufacturing experiences are positively related to environmental management practices. Environmental management practices alone are negatively related to market and financial performance. However, improved environmental performance substantially reduces the negative impact of environmental management practices on market and financial performance. The paper provides empirical evidences with large sample size that environmental management practices become an important mediating variable to resolve the conflicts between lean manufacturing and environmental performance. Additional contextual analyses suggest that differences exist in terms of the strengths and statistical significance of some of the proposed relationships. Thus, for effective implementation of environmental management, firms need to measure environmental performance through which the impact of environmental management on other business performance outcomes is examined.

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    File URL: http://www.sciencedirect.com/science/article/B6VF8-51B1WN2-4/2/1c1d9921079d56d6af9dd255268250b3
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    Article provided by Elsevier in its journal International Journal of Production Economics.

    Volume (Year): 129 (2011)
    Issue (Month): 2 (February)
    Pages: 251-261

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    Handle: RePEc:eee:proeco:v:129:y:2011:i:2:p:251-261
    Contact details of provider: Web page: http://www.elsevier.com/locate/ijpe

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    1. John MacDuffie, 1995. "Human resource bundles and manufacturing performance: Organizational logic and flexible production systems in the world auto industry," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 48(2), pages 197-221, January.
    2. Lin, Chinho & Chow, Wing S. & Madu, Christian N. & Kuei, Chu-Hua & Pei Yu, Pei, 2005. "A structural equation model of supply chain quality management and organizational performance," International Journal of Production Economics, Elsevier, vol. 96(3), pages 355-365, June.
    3. Lee Cronbach, 1951. "Coefficient alpha and the internal structure of tests," Psychometrika, Springer, vol. 16(3), pages 297-334, September.
    4. Andrew King & Michael Lenox, 2002. "Exploring the Locus of Profitable Pollution Reduction," Management Science, INFORMS, vol. 48(2), pages 289-299, February.
    5. Robert D. Klassen & Curtis P. McLaughlin, 1996. "The Impact of Environmental Management on Firm Performance," Management Science, INFORMS, vol. 42(8), pages 1199-1214, August.
    6. Larry J. Menor & M. Murat Kristal & Eve D. Rosenzweig, 2007. "Examining the Influence of Operational Intellectual Capital on Capabilities and Performance," Manufacturing & Service Operations Management, INFORMS, vol. 9(4), pages 559-578, May.
    7. Yang, Chen-Lung & Lin, Shu-Ping & Chan, Ya-hui & Sheu, Chwen, 2010. "Mediated effect of environmental management on manufacturing competitiveness: An empirical study," International Journal of Production Economics, Elsevier, vol. 123(1), pages 210-220, January.
    8. Hong, Paul & Roh, James, 2009. "Internationalization, product development and performance outcomes: A comparative study of 10 countries," Research in International Business and Finance, Elsevier, vol. 23(2), pages 169-180, June.
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