The role of stakeholder pressure and managerial values in the

implementation of environmental logistics practices*

Javier GONZÁLEZ-BENITO **

Dpto. Administración y Economía de la Empresa Universidad de Salamanca

Campus Miguel de Unamuno, Edificio FES 37007 Salamanca (Spain) Tel: 34-23-294400 ext. 3502

Fax: 34-23-294715 javiergb@usal.es

Óscar GONZÁLEZ-BENITO

Dpto. Administración y Economía de la Empresa Universidad de Salamanca

Campus Miguel de Unamuno, Edificio FES 37007 Salamanca (Spain) Tel: 34-23-294400 ext. 3508

Fax: 34-23-294715 oscargb@usal.es

* The authors gratefully acknowledge the financial support of the Spanish Ministry of Science and Technology (Research Projects SEC 2001-1756 and SEJ 2004-03888/ECON). ** Corresponding author

Dr. J. González-Benito has a degree in Mathematics (1995) and a PhD in Economics and Management Sciences (1999) from the University of Salamanca, where he joined as an Assistant Professor of Management after taking the MPhil degree in Management Studies of the University of Cambridge (UK) (1997) and the MSc degree in Operations Management of UMIST (UK) (1998). He has published articles in journals such as: International Journal of Production Research, International Journal of Production Economics, International Journal of Operations and Production Management, OMEGA, Industrial Marketing Management and British Journal of Management.

Dr. O. González-Benito has a degree in Mathematics from the University of Salamanca (1995), a MSc degree in Marketing at UMIST (UK) (1997), and a PhD degree in Economics and Management Sciences from the University of Salamanca (1999). He is currently Assistant Professor of Marketing at the University of Salamanca. In addition to several published papers in some of the most recognized Spanish marketing and management academic journals, he has published articles in international journals such as Journal of Retailing, International Journal of Market Research, Journal of Business Research, OMEGA, Industrial Marketing Management, British Journal of Management and Small Business Economics

1

The role of stakeholder pressure and managerial values in the

implementation of environmental logistics practices

Abstract

Many of the management practices that contribute to improving a firm’s environmental

performance are developed in the area of logistics management. The aim of this work is to

contribute to identifying the factors determining the implementation of these practices by studying

two variables: the environmental pressure of the stakeholders as perceived by the firm and the

values and beliefs of its managers. The analysis of data provided by 186 industrial firms reveals

that two dimensions of pressure can be distinguished, governmental and non-governmental, and

that only the latter is able to explain the implementation of environmental practices in logistics.

The empirical results also confirm the effect of management’s values and reveal that part of this

effect is channelled through the influence of these values in the perception of environmental

pressure.

Key words: logistics, environmental management, stakeholders, managerial values

1. INTRODUCTION

The preservation of the environment has become an unavoidable variable in industrial activity.

While some firms have adopted a reactive strategy, limiting themselves to the prevailing

legislation, others have chosen more proactive strategies, introducing voluntarily practices

focused on reducing their environmental impact. In particular, many of these practices are carried

out in the area of logistics, where there is great potential for contributing to the environmental

performance of firms (Wu and Dunn, 1995). It is therefore interesting to know which

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contingencies lead firms to develop proactive environmental initiatives in this area of activity, i.e.

what circumstances favour the implementation of environmental practices in logistics.

This paper is intended to contribute to answering this question by studying the role played by

stakeholder pressure and managerial values and beliefs in the implementation of these

environmental logistics practices. Specifically, this paper (1) analyses the effect of the perceived

stakeholder environmental pressure and the environmental awareness of managers and (2)

explores the extent to which the interaction between these two variables exists and is relevant. In

this second respect, this paper expressly analyses the extent to which the environmental

awareness of managers moderates the relationship between the perceived pressure and the

implementation of environmental logistics practices and the extent to which this pressure

mediates the relationship between managerial values and the implementation of environmental

logistics practices.

The interest of this work lies in the following aspects:

- Although the effect of stakeholder environmental pressure and managerial values on the

environmental proactivity of a company has often been approached in the literature, most

of these papers consider corporate practices focused on environmental planning and

organization activities (e.g. Henriques and Sadorsky, 1999; Bansal and Roth, 2000).

Some evidence exists about the relevance of these variables in environmental

purchasing and green supply chain management (Carter and Carter, 1998; Carter and

Jennings, 2004; Zhu et al., 2005), but none of these papers has focused on logistics.

- The effect of these two variables on the environmental behaviour of companies has been

studied separately but no attention has been paid to their joint effect. The way in which

perceived pressures and managerial values interact and how this interaction affects

environmental proactivity is still unexplored.

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- This paper provides evidence about the implementation patterns of environmental

logistics practices and the nature of stakeholder environmental pressure in Spanish

industry, a geographical area where little research on green logistics and supply chain

has been reported.

The article is divided into six sections. In section 2, the literature on environmental logistics

practices is reviewed and those practices considered on the empirical level are introduced. In

section 3, the role of the two determining variables that are the object of study are analyzed and

the working hypotheses are developed. Section 4 is devoted to explaining the methodology

followed for contrasting the hypotheses, whereas in section 5 we present and discuss the results

obtained. The main conclusions are summarized in section 6.

2. ENVIRONMENTAL LOGISTICS PRACTICES

Different authors have pointed out that the environmental proactivity of firms is manifested not

only through the transformation of their internal activities (product design and production

processes) but also through the introduction of new practices in the logistics of supply and

distribution that link them to other participants (suppliers and customers) in the value chain

(González-Benito and González-Benito, 2005b). A series of environmental practices has been

identified or suggested for the management of physical flows that enter and leave an industrial

organization, not only in the literature focused specifically on logistics (Murphy et al., 1994, 1995;

Prendergast and Pitt, 1996; Wu and Dunn, 1995), but also from the perspective of purchasing

management (Bowen et al., 2001; Green et al., 1998; Min and Galle, 2001; Zsidisin and Hendrick,

1998; Zsidisin and Siferd, 2001) or from the more generic and integrating perspective of the

supply chain (Handfield et al., 1997; Lamming and Hampson, 1996; Sarkis, 1998; Zhu and

Sarkis, 2004; Rao and Holt, 2005).

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As regards the entry of materials, the most common measures consist of prioritizing the

purchasing of products that are shown to have been developed and manufactured in accordance

with ecological criteria, and related to this, selecting suppliers with the best environmental

performance. In this sense, works such as that of Handfield et al. (2002) or Enarsson (1996)

provide tools and outlines for facilitating the environmental evaluation of suppliers, pointing out

that a firm committed to the environment should demand a similar commitment from the firms

they work with.

Transportation is another aspect of logistics with considerable environmental impact (Woensel et

al., 2001). One of the easiest measures to improve environmental performance in this area

consists of prioritizing shipment consolidation in the planning and programming of flows (Wu and

Dunn, 1995). This allows the capacity of the vehicles used to be maximized and the emission of

contaminating gases reduced. Another, more strategic measure, although more difficult to

implement (Byrne and Polonsky, 2001), would consist of choosing less polluting forms of

transportation or those logistic operators more committed in this sense. The use of motors run on

natural gas, or the hiring of rail transport instead of road transport are some examples of

environmental actions in this sense.

In the logistics of storage, manipulation and distribution, the aspects related to the packing,

packaging and bottling of products are the ones with the most impact on the natural environment.

Thus we must distinguish between primary, secondary and transport packaging (Livingstone and

Sparks, 1994). The first refers to the direct packaging of the product, which the consumer uses

until the product is consumed. The second refers to any additional packaging (boxes, bags…)

used frequently with promotional aims or to facilitate the combined purchase of several units of

5

the same product. Transportation packaging refers to the packaging used to facilitate the moving

and storage of products (containers, boxes, pallets…). Primary and secondary packaging is what

most directly affects the consumers’ intention of purchase, and therefore its modification

responds more to commercial criteria than to logistic criteria. Efforts in this sense are usually

focused on reducing the packaging and using recyclable materials or containers. With respect to

transportation packaging, the restriction is not usually determined by consumer perception, but by

aspects relating to operation costs. In this case as well the effort made focuses on replacing

throw-away packaging with reusable containers or in facilitating the recycling of packaging.

Although traditional logistics mainly considers the physical flows of products from the

manufacturer to the consumer, the recycling and re-use of materials and components has given

rise to new physical flows from the consumer to the manufacturer, which is now known as

“reverse logistics” (Andel, 1997; Giuntini and Andel, 1995; Jonhson, 1998; Rogers and Tibben-

Lembke, 2001; González-Torre et al, 2004). These new flows propitiate the appearance of new

centres for the treatment and disassembly of products and to new businesses focused on

recycling. Although this reverse logistics is becoming more and more an activity carried out by

independent operators, one characteristic of an environmentally proactive firm would be its

involvement in the development and operating of systems for the recycling, re-use and recovery

of products. This implies an overall view of the value chain and a feeling of responsibility for the

products made throughout their useful life.

Although not intended to be comprehensive, but rather representative, Figure 1 shows 8 practices

through which logistics can contribute to the preservation of the environment. In this work these

practices come under the heading of “environmental logistics practices”, and in the subsequent

6

empirical development it is assumed that these practices constitute an indicator of environmental

commitment on the part of the firm as regards logistics.

It is worth mentioning that this paper adopts a logistics focus, that is, it considers only the tactical

elements of green supply chain management, which according to Sarkis (2003) can be grouped

into five major categories: procurement, distribution, packaging, reverse logistics and production.

In particular, this paper is centred on the inbound and outbound flows of materials and,

consequently, only practices within the first four of these categories are considered. Therefore,

strategic elements of green supply chain management such as the establishment of cooperative

relationships with suppliers and customers for better undertaking joint environmental initiatives

(see, for example, Geffen and Rothenberg, 2000; Klassen and Vachon, 2003; Walton et al., 1998;

Zhu and Sarkis, 2004) are not considered. Nonetheless, since the practices chosen for this

research are often integrated in studies with a broader view of supply chain management, the

main findings and conclusions of this literature must be taken into account.

--- FIGURE 1---

3. THE ROLE OF STAKEHOLDER PRESSURE AND MANAGERIAL VALUES: RESEARCH

HYPOTHESES

In this section we analyze the role of stakeholder pressure and managerial motivation in the

implementation of environmental logistics practices. Four research hypotheses are presented and

appear in outline form in Figure 2. The assumption underlying the reasoning of these hypotheses

is that the adoption of green supply chain management entails improvements in environmental

performance. This assumption, which turns out to be quite evident for the tactical practices

considered in this analysis, has received empirical support for the case of more strategic

7

practices such as the integration of suppliers and customers (Rao, 2002; Zhu and Sarkis, 2004).

It implies that those contingencies that stimulate companies to reduce their environmental impact

can also induce the adoption of environmental practices in logistics.

--- FIGURE 2 ---

3.1. Stakeholder Environmental Pressure

Stakeholders are individuals and groups which can affect the company’s performance or who are

affected by a firm’s actions (Freeman, 1984). Clarkson (1995) distinguishes between primary

stakeholders, those without whose participation and support the organization cannot survive (e.g.

customers, suppliers, governments), and secondary stakeholders, which affect and are affected

by the organization but are not engaged in transactions with it and are not essential for its survival

(e.g. media, non-governmental organizations). In line with the proposals of Freeman and Liedtka

(1991), this author considers that an organization is a system of primary stakeholder groups and

its survival and success depends on the capacity to create value for these stakeholders by

satisfying their demands and expectations. An organization can behave either in a more proactive

or more reactive manner to face such demands.

As regards corporate social responsibility and, in particular, environmental responsibility,

stakeholders demand integrity, respect, standards, transparency and accountability (Waddock et

al., 2002). In fact, the environmental commitment of a firm implies harmonizing environmental

performance with stakeholders’ expectations (Gupta, 1994). Thus, the company acts conditioned

by the pressures that it receives and perceives from its stakeholders. Several authors point out

the importance of this pressure for the development of environmental strategies (Berry and

Rondinelly, 1998; Fineman and Clarke, 1996; Jennings and Zandbergen, 1995; Maxwell et al.

1997; Winsemius and Guntram, 1992).

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There is certain empirical evidence to this respect. Although with some nuances, the results of

Henriques and Sadorsky (1999) support the idea that environmental proactivity is associated with

higher pressures from organizational stakeholders (e.g. customers, suppliers, employees,

shareholders) and community stakeholders (e.g. non-governmental organizations, social groups),

whereas environmental reactivity is associated with higher pressures from regulatory

stakeholders (e.g. governments, trade associations) and the media. Buysse and Verbeke (2003)

introduced the distinction between internal primary stakeholders (employees, shareholders and

financial institutions) and external primary stakeholders (customers and suppliers) and observed

that only the former group motivates environmental proactivity. This result was explained by

arguing that the sample studied consisted of producers of intermediate products and had scarce

consumer contact. Alvarez et al. (2001) also observed that the implementation of environmental

practices in the hotel industry responds to a higher stakeholder pressure. The study of Klassen

and Whybark (1999) included external stakeholder influence as a contextual variable which was

measured by two constructs: public interaction, which assessed to what extent managers gather

opinions from and provide environmental information to the public; and awareness of

environmental regulation, which assessed to what extent plant personnel are informed regarding

environmental regulation and evaluated on regulatory compliance. Both constructs showed

positive effects on the degree of environmental proactivity.

Another justification of the importance of stakeholders as motivators of the environmental

strategies of firms is that among the benefits attributed to environmental proactivity there is

precisely improvement in the relationship with the different stakeholders and even the possibility

of influencing some of them (Russo and Fouts, 1998; Sharma and Vredenburg, 1998;

Shrivastava, 1995).

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As specifically regards the environmental practices in the area of logistics it can be said that not

only are they a possible response to the pressures received but they also involve and directly

affect different groups of external stakeholders. They can thus be easier to implement when these

same stakeholders demand a greater environmental commitment. Empirical research in this

respect is scarce and focuses on closely related concepts such as supply chain management and

purchasing management rather than on logistics. From an exhaustive analysis of five companies,

Handfield et al. (1997) observed that companies receive diverse pressures from different

stakeholders as regards environmental issues and that some green value chain practices are

potentially able to satisfy all of them. These authors therefore provided preliminary evidence

about the potential of supply chain management to satisfy environmental demands from

stakeholders. Carter and Carter (1998) found that environmental purchasing responds to the

pressures of distributors, retailers and customers and that other stakeholders such as regulators,

competitors or suppliers had scarce importance. Zhu et al. (2005) identified different types of

pressure received by Chinese enterprises to adopt green supply management practices. In the

light of these considerations, we propose the following hypothesis:

Hypothesis 1: The greater the stakeholder pressure perceived by the firm, the greater the

implementation of environmental logistics practices.

3.2. Managerial Values: Environmental Awareness of Managers

Several papers point out the importance of the support and commitment of top management for

the development of proactive environmental strategies (Hunt and Auster, 1990; Berry and

Rondinelli, 1998; Quazi et al., 2001; Del Brio et al., 2001). Other authors consider that the key

question is not simply the existence of top management support for environmental initiatives.

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Rather, they propose that, depending on the managers’ beliefs, expectations, perceptions and

opinions, the company will become inclined to implement a certain set of environmental practices

(Bansal and Roth, 2000; Banerjee, 2001; Cordano and Frieze, 2000; Fineman and Clarke, 1996;

Flannery and May, 2000; Vastag et al., 1996). Thus, the environmental awareness of managers,

understood as the degree to which they consider imperative the active participation of industry in

achieving sustainable development, might influence the environmental behaviour of a firm.

In the case of logistics, the implementation of environmental practices requires additional effort

since, as mentioned earlier, in many cases it requires not only an internal effort but also the

collaboration of other agents participating in the value chain. Success does not depend only on

the organization itself and putting these practices into effect often requires great effort at

negotiation. It is perhaps in these types of practices that a high environmental awareness on the

part of management can be a determining factor in encouraging others to begin to change.

Previous empirical evidence in this respect has not been found in the literature on logistics,

although, in the related fields of corporate social responsibility and purchasing management,

Carter and Jennings (2004) found evidence of a positive relationship between the individual

values of purchasing employees and purchasing social responsibility. Since one dimension of

corporate social responsibility is environmental commitment, this result is consistent with the idea

that the values and beliefs of people within the organization affect the development of

environmental initiatives in purchasing. According to these observations the following hypothesis

is proposed:

Hypothesis 2: The greater the environmental awareness of the firm’s management, the

greater the implementation of environmental logistics practices

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3.3. Mediating Role of the Perceived Stakeholder Pressure

Some authors (Del Brio and Junquera, 2003; Sharma et al., 1999; Sharma, 2000) consider that

the implementation of certain environmental practices and strategies depends on whether the

management perceives environmental pressure and topics as opportunities or as threats. That is,

these works suggest that the same environmental pressure or problems can be perceived

differently and give rise to different responses according to how they are interpreted. In light of

these considerations, it makes sense to ask ourselves what variables affect two fundamental

questions: (1) the perception of pressure and (2) the response to these perceptions. Below we

argue that the beliefs and values of the management (their level of environmental awareness, in

particular) can affect environmental management in both aspects.

As refers to the first question, the perception of pressure, it could be thought that the values and

beliefs of the management affect the effort made to perceive the opinions and demands of the

milieu, i.e., the capability of perceiving signs in environmental matters affecting the firm). In

particular, managers who are more environmentally aware will be more open and receptive to

environmental demands and will be more concerned with sounding out the stakeholders in this

sense. They will make a greater effort to perceive the environmental demands of the

stakeholders, which means that the same level of demands will be perceived more intensely and

the firm will interpret that it is subjected to greater pressure.

These arguments lead us to think that there is a direct effect of the managerial motivations on the

perception of environmental pressure. That is, the effect of the motivations on implementation

would be due, in part, to the mediation of perceived pressure. This reasoning led us to propose

the following hypothesis:

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Hypothesis 3: The greater the environmental awareness of the firm’s managers, the

greater the environmental pressure perceived and part of the effect of the environmental

awareness of managers on the implementation of environmental logistics practices is

channelled through this relationship.

3.4. Moderating Role of Managerial Values

As regards the second question, the response given to perceived pressure, it might be thought

that the most environmentally aware managers would be more likely to introduce environmental

practices in the face of greater demand from the milieu. Those least environmentally aware will

resist the pressure of the stakeholders, will look for alternatives to distract them and delay any

type of environmental changes, or will simply not consider these kinds of actions as a priority.

This argumentation, which is in agreement with the literature suggesting that the beliefs and

cognitive characteristics of the managers have important effects on their strategic decisions and

the organizational processes established (D’Aveni and MacMillan, 1990; Priem, 1994; Thomas et

al, 1993), led us to posit the following hypothesis:

Hypothesis 4: The greater the environmental awareness of the managers, the greater the

effect of stakeholder pressure perceived by the firm on the implementation of

environmental logistics practices (i.e. managerial values moderate the relation between

the stakeholder pressure perceived and the implementation of environmental logistics

practices).

4. METHODOLOGY

4.1. Data

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The approached population consisted of medium and large Spanish companies in three industrial

sectors: chemical products (except pharmaceutical companies), electronic and electrical

equipment, and furniture and fixtures. The purpose was to choose sectors subjected to different

environmental problems and pressures, and companies large enough to assure that the

implementation of the diverse practices considered in the analysis makes sense. All the entries

with more than 100 employees in each of the selected industrial sectors were extracted from the

Dun & Bradstreet census of the 50,000 largest Spanish companies. Thus, the target population

finally consisted of 428 companies, 156 of which were in the chemical sector, 211 in the

electronic and electric equipment sector, and 61 in the furniture sector.

After a pre-test on 9 companies, an extensive postal questionnaire covering different aspects of

environmental management was addressed to the production and operations manager of each

company. In all the cases, the questionnaire was preceded by a phone call to identify the

appropriate addressee, to announce the sending of the questionnaire and to ask for collaboration.

A presentation letter was attached to each questionnaire and, some days after the mailing, a

second phone call was made to all the companies that had not replied. This procedure yielded a

total of 186 valid responses which represent a global response rate of 43.38%, which in turn

corresponds to rates of 40.38%, 45.50% and 44.26% for the chemical, electronic equipment and

furniture industries, respectively.

4.2. Measures

a) Environmental Logistics Practices: Each company was asked to score the degree of

implementation of each environmental logistics practice included in Figure 1 according to a six-

point scale (1 “not at all; only what regulation requires” – 6 “to a great extent; it has been a priority

for our company”). The eight measures were reduced to a single scale through principal

14

components analysis. Only one factor resulted with an eigenvalue greater than 1. The indicators

of reliability (Cronbach’s α) and validity (factor loadings) were appropriate (Table 1).

--- TABLE 1 ---

b) Perceived Stakeholder Environmental Pressure: Each manager was asked to score the

environmental pressure exerted by the stakeholder groups included in Table 2 from 1 (not

important – no pressure) to 6 (very important – great pressure). Principal components analysis

was applied to the 10 items and two factors turned out to have eigenvalues higher than one,

together accounting for 57.20% of the variance. Table 2 shows the structure matrix. All the items

except governments and regulatory agents load on the first factor. Therefore, factors were

labelled as governmental pressure and non-governmental pressure, respectively. This result

indicates that those companies in the sample that perceive high pressure from any non-

governmental stakeholder tend to perceive high pressure as well from the other non-

governmental stakeholders. In other words, all the non-governmental stakeholders tend to be

perceived as a homogeneous group.

--- TABLE 2 ---

c) Managerial Environmental Awareness: To measure environmental awareness, operations

managers were asked to mark their degree of agreement or disagreement with 3 statements on a

six-point Likert scale. These statements consisted of assertions about the need for higher

voluntary and unselfish implication of companies for the achievement of sustainable development

(see Table 3). The 3 items were reduced to a single measure through principal components

analysis. Construct validity (factor loadings) and reliability (Cronbach’s α) were acceptable.

15

--- TABLE 3 ---

4.3. Analysis

To contrast the first two hypotheses, multiple regression analysis was posed, considering the

implementation of environmental logistics practices as the dependent variable and the measures

of perceived pressure and environmental awareness as independent variables. In order to isolate

this relationship, four control variables were also included in the analysis:

(1) Company size, measured as hundreds of employees. This variable was included to

control the effect of scale economies on the implementation of environmental practices

and the advantages derived from the superior availability of resources in large

companies. Several papers reveal the relevance of this variable in explaining

environmental proactivity (e.g. Alvarez et al., 2001; Aragón-Correa, 1998; Min and Galle,

2001). ,

(2) Internationalization, formalized as a binary variable that differentiates firms integrated

in international business groups. This variable was included to control the effect of

corporate size as well as the effect of knowledge transfer between different divisions and

plants. This transfer facilitates the joint adoption of new practices and the quick imitation

of the most environmentally advanced subsidiaries. Papers such as those of Christmann

and Taylor (2001) and Kennelly and Lewis (2002) confirm the relevance of this variable.

(3) The industrial sector, which required the introduction of two binary variables

distinguishing the chemical and electronic and electrical equipment sectors, respectively.

These variables were included to control the effects of industry concentration (Arora and

Cason, 1996) and the divergences between industries as regards environmental

16

pressures, potential environmental damage and perception of environmental issues

(Banerjee, 2002).

(4) The use of advanced production and operations management (POM). This variable

was built through principal components analysis from the degree of implementation rated

on a six-point Likert scale of five advanced production and operations management

practices: Total Quality Management, advanced manufacturing technologies, Just-in-

Time, information-technology-based integrated management systems such as ERPs, and

collaboration with suppliers (see Table 4). This variable reflects the proactivity of the

company’s manufacturing strategy and, to some extent, the strategic importance the

company gives to the production and operations function, which is often responsible for

many of the environmental practices implemented by companies (Gupta, 1994; Inman,

1999; Angell and Klassen, 1999). Thus, this variable has been included to control the

effect of the capabilities derived from the implementation of advanced manufacturing

practices, which can facilitate the environmental transformation of companies. Several

authors have provided evidence of the importance of the implementation of advanced

manufacturing practices to explain environmental issues (Florida and Davison, 2001;

Klassen, 2000; King and Lenox, 2001; Gonzalez-Benito and Gonzalez-Benito, 2005a)

and there is also some evidence in the particular case of green supply chain

management (Zhu and Sarkis, 2004).

--- TABLE 4 ---

Table 5 shows the relationships by pairs of all the variables considered as a function of the

numeric properties of the measurement scale. The relationships are statistically significant in

several cases. Because of this, and to avoid possible problems of interpretation derived from the

17

collinearlity between the different independent variables, 4 explanatory models were considered.

In the first model, only the explanatory role of the control variables was considered. In the second

and third models the two dimensions of perceived environmental pressure on one hand and the

measure for environmental awareness on the other hand were incorporated separately, while in

the fourth model the three variables were introduced at the same time. The results can be seen

in Table 6.

--- TABLE 5 ---

--- TABLE 6 ---

Hypothesis 3 poses the existence of a relationship between environmental awareness and the

environmental pressure perceived by the firm. Aside from the results of the Pearson test for the

correlation offered in Table 5, two new regressions were posed with both dimensions of perceived

stakeholder pressure as dependent variables, respectively, and environmental awareness

together with the control variables as independent variables. To isolate the effects of collinearity,

two models were again differentiated for each dependent variable, one with the control variables

and another incorporating environmental awareness as an explanatory variable. The results are

shown in Table 7. The examination of this Table along with Table 6 provides information about

the extent to which governmental and non-governmental pressures mediate the relationship

between environmental awareness and the implementation of environmental logistics practices

(Baron and Kenny, 1986).

--- TABLE 7 ---

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To test hypothesis 4, which suggests a moderating relationship between environmental

awareness and the influence of perceived environmental pressure in the implementation of

environmental logistics practices, we again performed the regression structure posed in Table 6

but incorporating two interaction terms in a fifth model. These interaction terms were respectively

formed by the product of environmental awareness and each dimension of perceived pressure.

This is a usual analytic procedure for studying relationships of moderation (Venkatraman, 1989).

5. DISCUSSION OF RESULTS

The first explanatory model in Table 6 incorporates only the control variables. The explanatory

power (R2) is significant, which suggests that the inclusion of these variables in the analysis is

correct. The implementation of advanced POM practices stands out as the variable that positively

and significantly affects the implementation of environmental logistics practices. This supports the

idea that environmental management is strongly rooted in the production and operations function

(Gupta,1994; Inman, 1999; Angel and Klassen, 1999) and that the proactivity of this function is

hence determinant for the development of environmental practices in logistics. Furthermore, this

result might indicate that advanced POM practices generate certain capabilities that are useful in

facing environmental challenges in logistics. Although the other control variables do not appear

as significant, according to Table 5, the implementation of advanced POM practices is higher in

large companies integrated into international groups and working in the electrical and electronic

equipment industry. Therefore, the significance of the implementation of advanced POM practices

might be to some extent capturing the importance of company size, internationalization or

industrial sector.

The second model in Table 6 incorporates as independent variables both dimensions of

perceived stakeholder pressure. The explanatory power of this model increases significantly with

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respect to the first model, indicating that these variables are able to explain a part of the variance

of the dependent variable that the control variables do not explain. However, the coefficients

indicate that only the non-governmental dimension of perceived pressure exerts a significant

influence on the implementation of environmental logistics practices. On the contrary, perceived

governmental pressures appear as non-relevant, perhaps because these pressures focus on the

observation of legislation and not on the development of proactive initiatives such as those

considered in this analysis. Thus, hypothesis 1 is accepted only for the case of non-governmental

pressures. These results are consistent with those of Carter and Carter (1998), who found that

the pressures from regulatory agents do not constitute a driver of environmental purchasing

activities. To some extent, this result extrapolates the conclusions of Henriques and Sadorsky

(1999), who found that regulatory pressures are associated with reactive environmental

strategies, for the specific case of logistics.

The incorporation of the variable measuring the environmental awareness of the management

(see explanatory model 3 in Table 6) gives rise to results similar to those of model 2. Although the

explanatory power is somewhat less than in the cases of the pressure perceived, the results

indicate that the implementation of environmental logistics practices is also in part explained by

the motivations and beliefs of the managers directly responsible for putting them into practice.

The data therefore confirm hypothesis 2.

The correlation between environmental awareness and perceived non-governmental pressure

shown in Table 5 reveals that both variables share a noteworthy percentage of the variance,

which turns out to be statistically significant according to the Pearson test. This correlation

decreases for the case of governmental pressures but it is still significant. Furthermore, the

regression models posed in Table 7 indicate that, even incorporating the control variables,

20

environmental awareness has an additional and significant explanatory power on both

dimensions of perceived environmental pressure. The coefficient of environmental awareness is

positive and significant in both cases, thus improving the fit and the explanatory power of model 2

with respect to model 1 in Table 6 in both cases. The data thus lead us to accept the relationship

proposed in the first part of Hypothesis 3. Nonetheless, significance is higher in the case of non-

governmental pressure, perhaps denoting that governmental pressures use official channels and

become clearer to managers so that their perception is not so influenced by their environmental

awareness.

Returning to Table 6, explanatory model 4, which incorporates the three independent variables

under study together, shows that the coefficient and significance of environmental awareness is

lower than in model 3. According to Baron and Kenny (1986), this indicates that at least a part of

the effect of this variable on the implementation of environmental logistics practices is channelled

through its effect on perceived non-governmental pressures. In other words, the perceived non-

governmental pressure is a mediator in the relationship between the environmental awareness of

managers and the implementation of environmental logistics practices. The second part of

hypothesis 3 is therefore supported. However, the coefficient of environmental awareness is still

significant in model 4, thus indicating that, in spite of its relationship with perceived non-

governmental pressure, both are capable of explaining different portions of the variance of the

dependent variable. This supports the idea that there is also a direct effect of environmental

awareness on the implementation of environmental logistics practices.

To study the possible moderating effect of environmental awareness proposed in hypothesis 4,

two interaction terms formed by the product of environmental awareness with each of the

dimensions of perceived environmental pressure were incorporated in explanatory model 5 in

21

Table 6. It can be seen that the incorporation of these variables does not increase the explained

variance (R2) in a significant way. This indicates, that, although, as proposed in hypothesis 1, the

implementation of environmental logistics practices responds to non-governmental pressures, this

response is not higher in companies with environmentally conscious managers. Thus,

environmental awareness does not moderate the relationship between non-governmental

pressures and environmental logistics practices and hypothesis 4 cannot be accepted.

The final result of the work is outlined in Figure 3, where it can be seen that there are two ways

through which environmental awareness can affect environmental behaviour in logistics. One is

direct, according to the effect proposed in hypothesis 2, and the other is through the effect

considered in hypothesis 3. This result leads us to think that stakeholder pressure is a central

element in the explanation of environmental proactivity, and is relevant in explaining the effect of

other circumstances and contingencies.

6. CONCLUSIONS

In this work we have empirically studied the role of perceived stakeholder pressure and

managers’ environmental awareness in the implementation of environmental practices in the

management of logistics. The analysis of data provided by medium and large Spanish companies

in three industrial sectors has led to three major findings. Firstly, both studied variables play a

relevant role. The results indicate that companies perceive two different sources of environmental

pressure: governmental and non-governmental. However, only the latter is able to explain the

implementation of environmental logistics practices in a significant way, perhaps because these

practices are proactive and voluntary and governmental pressure focuses on the observance of

regulation. The other variable studied, the environmental awareness of managers, is also able to

explain a significant part of the implementation of environmental logistics practices. Although

22

previous research has already pointed out the importance of managerial values and beliefs in

explaining the environmental behaviour of firms, the analysis in this paper particularly confirms

that the presence of what Bansal and Roth (2000) call ‘ethical motives’ is a driver of

environmental commitment in the area of logistics.

Secondly, the results indicate that the effect of environmental awareness on the implementation

of environmental logistics practices is not only direct but is also channelled through its influence

on the perception of stakeholder pressure. That is, the same pressures are more intensely

perceived by environmentally conscious managers who thus interpret that they are subjected to a

greater pressure and this leads them to undertake environmental initiatives not only as a

consequence of their ethical principles but also because they feel it is a good way of satisfying

stakeholders. Thus, as far as non-governmental stakeholders are concerned, perceived pressure

mediates part of the effects of the environmental awareness of managers on the environmental

transformation of logistics. This relationship of mediation is possibly only one example of the

complementarities and interactions existing between the different determinant factors of green

logistics. In general, this finding suggests that those works focused only on the study of one

determining factor of environmental proactivity without considering additional contingencies might

offer only a partial and limited picture of the problem. The inclusion of a wide range of variables in

these studies and the analysis of the interactions between them would give a more complete view

of the complex mechanism explaining environmental proactivity.

Thirdly, those companies with environmentally aware managers are not more reactive to

perceived environmental pressures than other companies. In other words, although, as

commented upon above, these companies perceive a greater pressure, they respond to a given

level of perceived pressure with the same intensity as the other companies. This reveals that the

23

environmental awareness of managers does not moderate the relationship between perceived

environmental stakeholder pressures and the implementation of environmental logistics practices.

The results obtained are of interest not only to academics, but can also be of use in the

development of a public environmental policy. This work reveals that in order to foster the

environmental behaviour of a firm, the coercive method of pressure through legislation is not the

only way; rather, there are other means such as increasing the environmental awareness of

managers.

The work, of course, is not exempt from limitations, the overcoming of which constitutes possible

directions for future research. In the first place, we have only considered the implementation of

environmental practices related to logistics, and it would be of interest to broaden the analysis to

other more strategic components of supply chain management such as cooperation with

suppliers and customers for environmental purposes. Secondly, only the managerial beliefs of the

operations manager were measured and it was implicitly assumed that these are similar to the

beliefs dominant in the organization and to those of other managers involved in environmental

decisions. It would be a good idea to carry out studies that would be able to collect the opinion of

more than one manager in each organization, thus increasing the reliability of the data. In the

third place, we used environmental awareness as the sole indicator of managerial beliefs and

values. The consideration of other indicators and dimensions of managerial beliefs will open

numerous possibilities for future research. Finally, we have studied medium and large companies

in three Spanish industrial sectors. The replication of the analysis in other sectors and

geographical locations would provide new insight into the topic. It would also be interesting to

adapt the methodology for the analysis of small enterprises.

24

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27

Table 1. Environmental logistics practices. Principal component analysis

Practices Mean (D.T.) Factor 1

Preference for green products in purchasing 4.70 (1.26) .711

Environmental criteria in supplier selection 3.64 (1.80) .731

Shipments consolidation 3.82 (1.62) .742

Selection of cleaner transportation methods 2.26 (1.31) .679

Recyclable or reusable packaging/containers in logistics 3.97 (1.41) .773

Ecological materials for primary packaging 3.75 (1.45) .833

Recuperation and recycling systems 3.79 (1.59) .649

Responsible disposal of waste and residues (separation and preparation) 5.34 (1.09) .489

Total explained variance: 50.048%; Cronbach’s α: .8530

28

Table 2: Dimensions of stakeholder environmental pressure. Principal Components Analysis

Pressures

Mean (S.D.)

Factor 1 Non-governmental

pressure

Factor 2 Governmental

pressure

Governments and regulatory agents 4.99 (1.26) .357 .774

Customers / Consumers 4.11 (1.56) .623 -.224

Suppliers 2.42 (1.32) .716 -.247

Employees / unions 3.39 (1.45) .740 .197

Shareholders 4.48 (1.67) .630 -.199

Financial institutions 2.55 (1.52) .739 -.247

Communities and social groups 3.34 (1.66) .738 .154

Non-governmental organisations 2.82 (1.37) .694 .331

Competitors 3.34 (1.66) .719 -.322

Media 3.18 (1.54) .748 .121

Total explained variance: 57.20%

29

Table 3: Measure of managerial environmental awareness

Mean (S.D.)

Factor 1 Environmental awareness

It is crucial that companies commit themselves to reducing their impact on the natural environment, even if this entails lower productivity

4.15 (1.39) .802

Companies do not have the right to damage the natural environment just to satisfy their needs

5.24 (1.06) .779

Ensuring environmental protection must be the basis for building the competitive strategy of any company

4.58 (1.19) .782

Total explained variance: 62.06% ; Cronbach’s α: .7886

30

Table 4: Advanced POM practices. Principal Components Analysis

Practices Mean (D.T.) Factor 1

Total Quality Management 4.96 (1.29) .625

Advanced Manufacturing Technologies (AMT) 4.45 (1.16) .709

Just-in-Time production 4.02 (1.36) .674

Integrated information systems (ERPs) 4.76 (1.38) .620

Collaboration with suppliers 3.94 (1.18) .760

Total explained variance: 46.187%; Cronbach’s α: .7011

31

Table 5. Relationships between independent variables

Size Internationalization

Chemical sector

Electronic sector

Advanced POM

Non-Gov. Pressure

Gov. Pressure

Internationalization 10.584 3 ***

(+)

Chemical sector 1.111 3 .150 1 **

Electronic sector 6.025 3 **

(+) .103 1 -.739 1 ***

Advanced POM .341 2 *** 27.275 3 ***

(+) 1.009 3

5.003 3 ** (+)

Non-governmental pressure

.121 2 * 5.938 3 **

(+) 3.962 3 **

(+) 1.940 3 .355 2 ***

Governmental pressure

-.031 2 2.555 3 3.103 3 *

(+) 4.827 3 **

(-) .043 2 .000 2

Environmental awareness

.042 2 3.141 3 *

(+) 12.479 3 ***

(+) 5.845 3 **

(-) .282 2 *** .331 2 *** .186 2 **

1 ρ de Spearman 2 Pearson correlation 3 ANOVA F-value (sign of the significant relationships in brackets) *** p < 0.01 ** p< 0.05 * p < 0.10

32

Table 6. Explanatory power of perceived pressure and environmental awareness on the implementation of environmental logistics practices. Multiple regression analysis.

Explanatory Model 1

Explanatory Model 2

Explanatory Model 3

Explanatory Model 4

Explanatory Model 5

Constant -0.226 (0.167)

-0.200 (0.163)

-0.209 (0.165)

-0.183 (0.162)

-0.209 (0.163)

Size .025 ** (0.011)

0.024 ** (0.011)

0.026 ** (0.011)

0.025 ** (0.011)

0.025 ** (0.011)

Internationalization 0.020 (0.145)

-0.026 (0.142)

0.017 (0.143)

-0.031 (0.141)

-0.025 (0.142)

Chemical sector 0.348 * (0.203)

0.318 (0.198)

0.275 (0.203)

0.267 (0.198)

0.255 (0.199)

Electronic sector -0.037 (0.191)

-0.009 (0.186)

-0.029 (0.189)

-0.010 (0.185)

-0.019 (0.186)

Advanced POM 0.507 *** (0.070)

0.442 *** (0.072)

0.464 ** (0.072)

0.418 *** (0.073)

0.406 *** (0.074)

Non-governmental pressure

- 0.214 *** (0.065)

- 0.188 *** (0.066)

0.185 *** (0.066)

Governmental pressure - -0.070 0.061)

- -0.087 (0.061)

-0.088 (0.063)

Environmental awareness - - 0.146 ** (0.066)

0.119 * (0.067)

0.146 ** (0.070)

Non-Governmental pressure x environmental awareness

- - - - 0.089 (0.063)

Governmental pressure x environmental awareness

- - - 0.015 (0.053)

R2 .339 0.383 0.356 0.394 0.401

F 18.117 *** 15.528 *** 16.242 *** 14.147 *** 11.521 ***

∆F 6.329 *** (With respect to model 1)

4.881 ** (With respect to model 1)

3.149 * (With respect to model 2)

1.009 (With respect to

model 4)

Standard error in brackets *** p < 0.01 ** p< 0.05 * p < 0.10

33

Table 7: Explanatory power of environmental awareness on perceived environmental pressures. Multiple regression analysis

Non-Governmental

Pressure Governmental Pressure

Explanatory Model 1

Explanatory Model 2

Explanatory Model 1

Explanatory Model 2

Constant -0.034 (0.188)

-0.013 (0.184)

0.251 (0.200)

0.266 (0.199)

Size 0.003 (0.012)

0.005 (0.012)

-0.002 (0.013)

-0.001 (0.013)

Internationalization 0.90

(0.162) 0.094 (0.159)

-0.339 * (0.173)

-0.336 * (0.171)

Chemical sector 0.211 (0.228)

0.096 (0.227)

0.199 (0.243)

0.119 (0.245)

Electronic sector -0.197 (0.215)

-0.181 (0.211)

-0.184 (0.230)

-0.172 (0.228)

Advanced POM 0.358 *** (0.077)

0.286 *** (0.079)

0.129 (0.082)

0.079 (0.086)

Environmental awareness

- 0.221 *** (0.073)

- 0.155 * (0.079)

R2 0.162 0.203 0.052 0.072

F 6.877 *** 7.523 *** 1.959 * 2.302 **

Standard error in brackets *** p < 0.01 ** p< 0.05 * p < 0.10

34

Fig. 1. Representative environmental logistics practices

• Preference for green products in purchasing

• Environmental criteria in supplier selection

• Shipments consolidation

• Selection of cleaner transportation methods

• Recyclable or reusable packaging/containers in logistics

• Ecological materials for primary packaging

• Recuperation and recycling systems

• Responsible disposal of waste and residues (separation and preparation)

SUPPLY / PURCHASING TRANSPORTATION

WAREHOUSING & DISTRIBUTION

REVERSE LOGISTICS & WASTE MANAGEMENT

35

Fig. 2. Scheme of proposed hypotheses

H2

H3 H4

H1 Perceived

environmental pressure

Implementation of environmental

logistics practices

Managerial environmental awareness

36

Fig. 3. Effects resulting from the empirical analysis

H2

H3

H1 Perceived non-governmental pressure

Implementation of environmental

logistics practices

Managerial environmental awareness

H2

H3

Perceived governmental pressure

Implementation of environmental

logistics practices

Managerial environmental awareness