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A Relationship between Supply Chain Practices, Environmental Sustainability and Financial Performance: Evidence from Manufacturing Companies in Jordan

Author

Listed:
  • Luay Jum’a

    (Department of Logistic Sciences, School of Management and Logistic Sciences, German Jordanian University, Amman 11180, Jordan)

  • Dominik Zimon

    (Department of Management Systems and Logistics, Rzeszow University of Technology, 35-959 Rzeszow, Poland)

  • Muhammad Ikram

    (Research Institute of Business Analytics and Supply Chain Management, College of Management, Shenzhen University, Shenzhen 518060, China)

Abstract

Pursuing sustainable development creates competitiveness for manufacturing firms in the market, however the financial pressure of adopting sustainable environmental practices is still a major concern. Few studies were found on the inter-relationships between supply chain management practices, environmental sustainability, and firm financial performance. Moreover, manufacturing companies are compelled by different pressure groups across the globe to maintain environmental standards while conducting their business and supply chain activities. Therefore, the current study aims to investigate the impact of supply chain practices on environmental sustainability and financial performance. In addition, the role of environmental sustainability as a mediator between supply chain management and financial performance was analyzed to improve sustainable development. A well-designed questionnaire was administered to manufacturing companies in Jordan for data collection. A total of 376 responses were analyzed and the proposed hypotheses were tested by using Structural Equation Modelling (SEM) approach. The results reveal that environmental sustainability was tested significantly and influenced by supply chain practices such as relationship with customers, postponement, level of information sharing, and information quality. Whereas environmental sustainability had a significant direct effect on financial performance. Finally, environmental sustainability mediated the relationship of all supply chain management practices with financial performance except strategic supplier partnership dimension. The study provides policy guidelines to decision makers while simultaneously assists the managers to improve sustainability practices in manufacturing companies.

Suggested Citation

  • Luay Jum’a & Dominik Zimon & Muhammad Ikram, 2021. "A Relationship between Supply Chain Practices, Environmental Sustainability and Financial Performance: Evidence from Manufacturing Companies in Jordan," Sustainability, MDPI, vol. 13(4), pages 1-20, February.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:4:p:2152-:d:500961
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    References listed on IDEAS

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    3. Milita Vienažindienė & Vilma Tamulienė & Jurgita Zaleckienė, 2021. "Green Logistics Practices Seeking Development of Sustainability: Evidence from Lithuanian Transportation and Logistics Companies," Energies, MDPI, vol. 14(22), pages 1-18, November.
    4. Antonius Setyadi & Yunata Kandhias Akbar & Sunda Ariana & Suharno Pawirosumarto, 2023. "Examining the Effect of Green Logistics and Green Human Resource Management on Sustainable Development Organizations: The Mediating Role of Sustainable Production," Sustainability, MDPI, vol. 15(13), pages 1-20, July.
    5. Kyriaki-Argyro Tsioptsia & Eleni Zafeiriou & Dimitrios Niklis & Nikolaos Sariannidis & Constantin Zopounidis, 2022. "The Corporate Economic Performance of Environmentally Eligible Firms Nexus Climate Change: An Empirical Research in a Bayesian VAR Framework," Energies, MDPI, vol. 15(19), pages 1-16, October.
    6. John Wiredu & Qian Yang & Agyemang Kwasi Sampene & Bright Akwasi Gyamfi & Simplice A. Asongu, 2024. "The effect of green supply chain management practices on corporate environmental performance: Does supply chain competitive advantage matter?," Business Strategy and the Environment, Wiley Blackwell, vol. 33(3), pages 2578-2599, March.
    7. Wenxue Ran & Teng Xu, 2023. "Low-Carbon Supply Chain Coordination Based on Carbon Tax and Government Subsidy Policy," Sustainability, MDPI, vol. 15(2), pages 1-19, January.
    8. Fathi Alarabi Yosef & Luay Jum’a & Muntasir Alatoom, 2023. "Identifying and Categorizing Sustainable Supply Chain Practices Based on Triple Bottom Line Dimensions: Evaluation of Practice Implementation in the Cement Industry," Sustainability, MDPI, vol. 15(9), pages 1-22, April.
    9. Wafa Mohammad Abdaljabar & Norhayati Zakuan & Muhamad Zameri Mat Saman & Mariam Setapa, 2024. "The Practice of Enterprise Risk Management and Sustainable Performance in Jordan," Information Management and Business Review, AMH International, vol. 16(1), pages 329-342.
    10. £ukasz Ma³ys, 2023. "The approach to supply chain cooperation in the implementation of sustainable development initiatives and company’s economic performance," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 18(1), pages 255-286, March.
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