Antecedents and Outcomes of Supplier Proactive Environmental Responsiveness

Olga Kaminer Advisors: Markus Biehl, Ashwin Joshi

Schulich School of Business, York University

Introduction

Manufacturing has a negative impact on the environment Direct – gaseous, liquid and solid waste Indirect – product use and disposal

Focus on one’s own operations is not sufficient• Manufacturing versus assembly • Outsourcing trends• Integrating suppliers

Research Objectives

Identify and statistically confirm the conditions and the relative effectiveness of customer actions on their supplier’s environmental performance.

Identify and statistically confirm the competitive and business outcomes of suppliers’ enhanced environmental performance in reaction to their customers’ actions.

Research Questions

What customer actions are most effective in enhancing suppliers’ proactive environmental responsiveness?

What are the moderating factors which might influence effectiveness of the above actions?

What are the competitive and business outcomes of suppliers’ proactive environmental responsiveness for both suppliers and customers?

Literature Green Supply Chain

Barron, 1993; Bowen et al., 2001; Carter and Dresner, 2001; Geffen and Rotherberg, 2000; King and Lenox, 2002; Klassen and Vachon, 2003; Klassen and McLaughlin, 1996; Klassen and Whybark, 1999b; Lloyd, 1994; Sharma and Vredenburg, 1998; Shrivastava, 1995; Walton et al., 1998

• SPER• Selection, evaluation, and collaboration activities• Outcomes for suppliers from improved environmental performance

Lean Manufacturing/TQM Johannson, 1994; Klassen and McLaughlin, 1993; Lippman, 1999; Porter and van der Linde, 1995a, 1995b; Reid and Sanders, 2002; Remich,

1993

• Outcomes for both the customer and the supplier’s companies from collaboration

Resource-based View Barney, 1991

• Competitive outcomes for suppliers from smart use of resources

Inter-firm Governance Heide and John, 1988; Williamson and Ouchi, 1981

• Possible moderators – availability of alternative suppliers, supplier’s asset specificity

Absorptive Capacity Azzone and Noci, 1998; Cohen and Levinthal, 1990; Klassen and Whybark, 1999a; Szulanski, 1996

• Possible moderator – supplier’s absorptive capacity

Measuring Environmental Performance (Klassen and Whybark, 1999a)

Pollution Control Pollution Prevention

Management Systems

Opportunistic

Reactive

Proactive

low SPER high

Definitions

Selection – initial selection of suppliers into the supply base of a customer.

Evaluation – monitoring and assessment of the existing suppliers by a customer.

Collaboration – knowledge integration activities between customers and suppliers.

Model

SPER

OutcomesSupplier Reaction

For supplier

Increased market share of a customer; improved manufacturing,

envl. and financial performance; improved reputation

Collaboration

Evaluation

Selection

Customer Actions

•Supplier’s asset specificity•Supplier’s

absorptive capacity

•Availability of alternatives suppliers

For manufacturer

Competitive advantage, improved manufacturing, envl. and financial performance; improved reputation

Hypotheses – (1) selection process

H1: The suppliers’ selection process is positively related to SPER. Lloyd, 1994; Noci, 1997; Walton et al., 1998

H1a: The positive effect of the selection process on SPER is enhanced when competitive pressure on the supplier is high. Heide and John, 1988; Williamson and Ouchi, 1981

Hypotheses – (2) evaluation process

H2: The evaluation of suppliers has apositive effect on SPER.

Klassen and Vachon, 2003

The positive effect of evaluation process on SPER is enhanced when H2a: competitive pressure on the supplier is high.

• Heide and John, 1988; Williamson and Ouchi, 1981

H2b: supplier specific asset investments are high.• Heide and John, 1988

H2c: a supplier has high levels of absorptive capacity.

• Azzone and Noci, 1998; Christmann, 2000; Cohen and Levinthal, 1990; Klassen and Whybark, 1999a; Szulanski, 1996

Hypotheses – (3) collaboration activities

H3: Collaboration activities have a positive effect on

SPER.Christensen and Bower, 1996; Geffen and Rothenberg, 2000; Klassen and Vachon, 2003; Lippman, 1999

The positive effect of collaboration activities on SPER is enhanced when

H3a: competitive pressure on the supplier is high.• Heide and John, 1988; Williamson and Ouchi, 1981

H3b: supplier specific asset investments are high.• Heide and John, 1988

H3c: a supplier has high levels of absorptive capacity.

• Azzone and Noci, 1998; Christmann, 2000; Cohen and Levinthal, 1990; Klassen and Whybark, 1999a; Szulanski, 1996

Hypotheses – (4) outcomes of SPER

H5: SPER positively impacts supplier’s (a) manufacturing performance, (b) environmental performance, (c) reputation (d) customer (market) share, and (e) profitability.

Barney, 1991; Burgess et al., 1997; Burnes and New, 1997; Carter and Dresner, 2001; Christmann, 2000; Dyer, 1997; King and Lenox, 2002; Klassen and McLaughlin, 1996; Klassen and Whybark, 1999b; Porter and van der Linde, 1995; Sharma and Vredenburg, 1998; Shrivastava, 1995

H4: SPER positively impacts customer’s (a) manufacturing performance, (b) environmental performance, (c) reputation, (d) market share, and (e) profitability.

Johannson, 1994; Klassen and McLaughlin, 1993 ; Klassen and Vachon, 2003; Klassen and Whybark, 1999; Lippman, 1999; Reid and Sanders, 2002; Remich, 1993

Research Methodology

Exploratory research using qualitative data analysis (Eisenhardt, 1989; Glaser and Strauss, 1967; Miles and Huberman, 1994; Yin, 2003) Sample size – 3 or more

Large scale survey (Dillman, 1978) Small to large firms Phone survey

• Easier to reach SMEs• Avoid skipping of questions

Sample size – 1200 or more

Expected Contributions

Integrate disparate streams in the literature. Identify and confirm the mechanisms that

manufacturers can employ to foster SPER. Identify and confirm factors that influence the

effectiveness of those mechanisms. Identify and confirm competitive and business

outcomes of SPER for both customers and suppliers.