ANTECEDENTS OF GREEN PROCUREMENT PRACTICES AMONG LARGE & MEDIUM ENTERPRISE TOWARDS SUSTAINABLE MANUFACTURING IN MALAYSIA: THE MODERATING ROLE OF PROCUREMENT ETHICS

Abstract

Environmental and sustainability issues are now widely discussed on a global scale. In Malaysia, the rapid development of the manufacturing sectors has resulted in a negative impact on the environment. Given the increased attention to environmental awareness, many manufacturing firms in Malaysia are keen on adopting green procurement practices because of the positive benefits derived from its implementation towards achieving sustainability in manufacturing (environmental, economic, and social performances). This study has examined the synergistic effect of antecedents (top management support, collaboration with suppliers, financial investments, and internal environment orientation) and the interrelationship of sustainable manufacturing. This study has also gained insight into the mediating role of green procurement in the relationship between antecedents and the success of sustainable manufacturing. In addition, this study includes procurement ethics as the moderator between green procurement practices and sustainable manufacturing performance. The focus of this study is on the context of medium and large size manufacturing firms in Malaysia. A total of 330 response samples drawn from large and medium-sized manufacturing firms were used to test the hypotheses in this study. Analysis using structural equation modeling (SEM) revealed that there is sufficient evidence to support six of the ten hypotheses, including hypotheses of mediating roles with one partial mediator and two full mediators. The results indicated that financial investment, internal environmental orientation, and green procurement practices have positive effects on sustainable manufacturing. On the other hand, top management support and collaboration with suppliers have no relationship with sustainable manufacturing performance. Green procurement practices have fully mediated the relationship with both top management support and collaboration with sustainable manufacturing. In addition, green procurement practices partially mediated the relationship between financial investment and sustainable manufacturing. However, green procurement practices have no significant effects on internal environmental orientation and sustainable manufacturing. The moderating effect of procurement ethics showed a negative relationship between green procurement and sustainability. This study found no moderating effect on green procurement practices and sustainable manufacturing performance. Utilizing the Natural Resource Based View (NRBV) theory for theory building, this study explores how the procurement functions should use their supply base, together with their antecedents of green procurement practices, toward the sustainable manufacturing performance of firms in Malaysian context. The research findings provide useful insights and policy implications for firms seeking to adopt green procurement practices, as well as insights for manufacturing industries to further promote green procurement practices. The research may be limited by its narrow focus on specific antecedents for green procurement practices, possibly overlooking other factors impacting sustainable manufacturing performance.