Green purchasing capabilities and practices towards triple bottom line performance: Moderating effects of institutional pressure / Foo Meow Yee

Sustainability and environmental concerns have become mainstream issues. With increasing awareness and pressure from the general public and stakeholders, firms need to be more transparent in addressing and managing green issues of their supply base implementation. Many firms have concentrated sustainability efforts only in their internal operations, but neglect the part in examining the green sustainability practices through their supply base by utilizing the internal green purchasing capabilities to assess the actual environmental, economic, and intangible outcomes of the adoption of green purchasing practices. This study focuses on the sustainability practices of the green purchasing practices (green supplier selection, development, collaboration and evaluation) of firms, coupled with their internal green purchasing capabilities (manufacturing, integration, intraorganisational, financial and innovation capabilities) for the triple bottom line performance (environmental, economic, and intangible) of the firms based on the Resource Based theory. The study also includes institutional pressure (regulation, competitor and customer) as the moderator. The focus of this study is in the context of Malaysian ISO 14001 accredited manufacturing firms. A total of 163 usable response samples were drawn from all the 673 ISO 14001 certified companies in Malaysia. These companies have been certified by the SIRIM and included also in the list of the FMM directories. PLS analysis was used to test the hypotheses of this study in the first stage. The adequacy of the measurement model was assessed, followed by the examination of the structural relationship in the second stage. The results revealed that manufacturing, financial, intraorganisational, and integration capabilities have positive effects on green purchasing practices; the results found that green purchasing practices have positive effect on triple bottom line performance. On the other hand, the survey results indicate that manufacturing, intraorganisational and integration capabilities have positive effects on the triple bottom line performance of the firms, and that green purchasing practices mediate these three capabilities and the triple bottom line. Both financial and innovation capabilities have no significant effect on the triple bottom line performance of the firms or any mediating effect on green purchasing practices. This study found positive moderating effects of regulation, customer and competitor pressure on manufacturing capabilities, and green purchase practices. On the one hand, this study found only moderating effect of consumer pressure on intraorganisational capabilities, but no moderating effect on all the other green capabilities. Using the resource based theory for theory building and institutional pressure as the moderator, this study explores how the purchasing functions should use their supply base, together with their green purchasing capabilities toward the triple bottom line performance of ISO 14001 manufacturing firms in Malaysia context. The research findings provide useful insights for firms seeking to adopt green purchasing programme and provide insights for professional organizations, regulators, and legislators to further promote green purchasing inactivat