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Understanding the relationships between internal resources and capabilities, sustainable supply management and organizational sustainability.


Suppliers not only play a significant role in an organization's overall value creation, but they also considerably influence the total environmental impact of any firm (Handfield and Nichols 2002; Darnall, Jolley and Handfield 2008). Therefore, in order to attain the ambitions of sustainability, organizations must pay close attention to their supply-side practices as well. Recognizing its importance, several scholars have explored the area of sustainable supply management (SSM) by identifying antecedents, practices and performance implications (e.g., Bowen, Cousins, Lamming and Faruk 2001; Zhu and Sarkis 2004; Preuss 2005; Vachon and Klassen 2006; Lee 2008; Paulraj 2009). But research on SSM is still in its infancy and needs much closer attention. For instance, while evaluating antecedents to SSM, extant research has focused mainly on external stakeholder pressures (e.g., Preuss 2005; Lee 2008; Paulraj 2009). However, given that SSM is a significant source of competitive advantage, it is also imperative to consider the impact of firm-specific strategic resources and capabilities. Unfortunately, Bowen et al. (2001) is the only empirical study that has focused on the impact of such resources and capabilities on SSM. Therefore, the main ambition of this study is to advance theory building within supply management by developing a model linking firm-specific antecedents, SSM and sustainability performance.

When considering firm-specific antecedents, the one most researched is the environmental proclivity prevalent within firms (e.g., Sharma and Vredenburg 1998; Bowen et al, 2001). A strong environmental stance can, in turn, enable firms to develop superior environmental capabilities that are essential for achieving organizational sustainability The second widely acknowledged antecedent is top management sensitivity (Menon and Menon 1997). This is due to the fact that the ideals and values of top management can directly affect the scope of a firm's sustainability practices. But, fortunately or unfortunately, firms can meet the current requirements of sustainability performance through initiatives that are focused within their organizational boundary. And even organization-wide certifications do not require the engagement of suppliers in environmental initiatives. Therefore, even though these antecedents are crucial for firm-level sustainability practices, it is not unreasonable to counter their appropriateness in promoting SSM given firms' focus on creating economic wealth for their shareholders (Carroll 1999). Accordingly, it is important to consider an antecedent that would not only signal the presence of environmental proclivity and top management sensitivity, but will also enable firms to go beyond the confines of their firm boundaries and identify supply management capabilities that could lead to broader sustainability performance. With this ambition in mind, this study forwards enviropreneurship (1)--an entrepreneurial orientation that accommodates the needs of the environment and society--as the first key antecedent to SSM and organizational sustainability. (2)

Research also suggests that the presence of relational capabilities could facilitate SSM (Bowen et al. 2001). The underlying logic is that it would be easy to pursue SSM practices if a firm has already established long-term collaborative relationships characterized by strong interorganizational interactions. But, as noted by numerous researchers, strategic purchasing is a strong precursor to developing such superior supply management capabilities (e.g., Chen, Paulraj and Lado 2004). Therefore, this research appropriately considers strategic purchasing as the second key firm-specific antecedent and evaluates its direct and moderating effects. SSM is proposed as a relational capability, and following past research is defined to simultaneously consider the entire process--selection, environmental collaboration and evaluation--of a supply function. It is also considered to favorably mediate the relationship between strategic antecedents and sustainability.

This study makes several compelling contributions to current research. An entrepreneurial orientation is often related to superior organizational behavior and performance. And, given that strategic purchasing is a key boundary-spanning resource, it could also be envisioned to have a positive impact on SSM. But, at the same time, past research strongly suggests that firms can meet, and far exceed, the current sustainability requirements through superior firm-level initiatives alone. Therefore, though enviropreneurship and strategic purchasing are conducive to such behavior, they need not necessarily signal supply-wide sustainable practices. Accordingly, it is pertinent to comprehensively test the effect of these key antecedents on SSM and sustainability. Understanding such a necessity, this study first provides the much required empirical validation for these antecedents. And, in doing so, it also makes a significant contribution to an area that has received limited attention from supply management scholars (Bowen et al. 2001). Second, in contrast to most of the past studies, it recognizes the importance of internal resources and capabilities; and, following the resource-based and resource advantage views, it rightly argues that firms can pursue superior supply-related sustainable practices if they possess valuable, rare, inimitable and nonsubstitutable firm-specific resources/capabilities. Third, in light of the current "low" requirements of sustainability, researchers have long questioned the relative importance of sustainable supply chain practices due to their infinitesimal impact on end customers' purchasing decisions (Preuss 2005; Darnall et al. 2008). The manuscript addresses this question by (1) proposing SSM as a relational capability that is historically dependent and hard to imitate and (2) empirically validating the significant direct and mediating effects of SSM on sustainability performance. Finally, and most importantly, by considering firm-level as well as relational capabilities in conjunction, this study develops an integrative model that theoretically establishes and empirically tests (1) the relationship between firm-level and relational capabilities and (2) their combined effect on organizational sustainability.

The rest of the paper is structured as follows. The next section develops the theoretical rationale for the proposed hypotheses by drawing on related research. The following section explains the research methodology including data collection procedure, construct operationalization and measurement, hypothesis testing and results. The subsequent section presents discussion and implications of the study findings. The concluding section highlights some limitations of the study and offers suggestions for future research.


Sustainability as Competitive Advantage

Historically, businesses were considered entities that focused primarily on the creation of wealth for their shareholders through superior economic performance (Carroll 1999). But recent wisdom suggests that, while providing economic growth, businesses should also simultaneously preserve the natural environment and society (Carter and Rogers 2008). The underlying premise is that the triad: organization, environment and society, are not at odds, but are mutually dependent and should therefore be looked at through the lens of shared value. In other words, businesses cannot seek short-term profitability that could simultaneously endanger the environment or society (Porter and Kramer 2006). Rather, emphasis should be placed on competing for the future, whereby profitability and growth, as well as future sources of competitive advantage, are explored in a holistic fashion (Hamel and Prahalad 1994). Thus, sustainability, which is broader than economic prosperity, is essential for businesses to prosper in the current environmental landscape. More specifically, organizational sustainability, when approached from the notion of shared value, not only can help organizations to capitalize on markets of the future and gain first-mover advantage, but can also help them to establish better societal relationships and improve their social legitimacy as well as reputation (Hamel and Prahalad 1994; Porter and Kramer 2006). Therefore, organizational sustainability, lying at the intersection of economic, environmental and societal superiority, can ultimately lead to substantial and long-lasting competitive advantage (Hart 1995; Bansal 2005; Porter and Kramer 2006). This strategic importance of sustainability is also evident from the fact that Dow Jones and Company has created a specific index for over 300 companies that lead in sustainable development. And, the superior performance of this index further shows that companies with the best environmental practices consistently outperform the Dow Jones Industrial Average (Langenwalter 2007).

Supply Management and Sustainability

The dream of achieving genuine sustainability will not be realized unless this notion is ingrained along the entire supply chain (Preuss 2005). This is due to the well-known fact that over 50 percent of a product's value is often derived from materials and components bought from suppliers. Therefore, a company's total environmental impact is affected, not only by its operations, but also by its suppliers (Handfield, Sroufe and Walton 2004). Accordingly, SSM--the consideration of issues at the intersection of sustainability and supply management--is essential for a holistic adoption of sustainability (Tate, Ellram and Kirchoff 2010). Although practicing managers understand this, unfortunately most companies are yet to pay close attention to sustainability along the supply chain (Kanal 2009). Therefore, the strategic importance of this concept is only bound to grow considerably in the future.

Specifically, environmentally oriented components of supply management--supplier selection, environmental collaboration as well as supplier evaluation---could help firms to not only minimize the total environmental impact of their products and services, but could also aid in promoting synergy among the supply partners (Handfield et al 2004; Markley and Davis 2007). It can further help in creating innovative and emergent sustainable products and practices (Darnall et al. 2008). More importantly, given the general slowness in adopting sustainable supply practices, companies embracing sustainability along the supply chain can benefit from being a first mover in the market, and ultimately enhance brand image, corporate image and market share (Mahler 2007; Reuter, Foerstl, Hartmann and Blome 2010). In summary, by promoting sustainability, SSM is, and will be, an ongoing significant source of competitive advantage (Hart 1995; Porter and van der Linde 1995; Rao and Holt 2005; Pagell, Wu and Wasserman 2010). With this in mind, even though sustainability initiatives encompass the entire supply chain--suppliers and customers alike--this research specifically focuses on the supply side of the chain.

Model and Hypotheses

The hypothesized model linking the antecedent variables, SSM and sustainability is presented in Figure 1, Although past research has adopted the institutional and stakeholder theories to explain the relationships revolving around sustainability, given this study's focus on firm-specific and relational resources and/or capabilities, the model is grounded within the resource-based view, resource advantage theory and the relational view of strategic management. In spite of their differences, these theoretical perspectives cohesively assert that firm-specific and relationship-specific resources and/or capabilities can lead to long-lasting competitive advantage when they are valuable, rare, historically based, path dependent, tacit and socially complex (Barney 1991; Hunt and Morgan 1995). In addition, these theories also maintain that resources and/or capabilities are often synergistic in nature and can be more valuable when combined with others, both internal and external (Park, Chen and Gallagher 2002; Hunt and Davis 2008). In summary, the proposed model showcases the significance of these complementary theories at the intersection of sustainability and supply management, and recognizes that both firm-specific, as well as relational capabilities, are essential for achieving competitive advantage within the purview of the natural environment. The rest of this section briefly explains the theoretical constructs and their interrelationships.



Enviropreneurship. Enviropreneurship is defined as an entrepreneurial orientation that accommodates the needs of the environment and society while simultaneously satisfying the economic objectives of organizations (Menon and Menon 1997). This definition of enviropreneurship underlines the ability of organizations to tackle impending challenges, opportunities and obstacles through a high degree of innovation, risk propensity and proactiveness (Covin and Slevin 1991; Ireland et al. 2001). Because an entrepreneurial orientation cannot be easily acquired in factor markets, organizations need to invest a considerable amount of time and resources to cultivate such an organizational culture (Lee, Lee and Pennings 2001). Accordingly, it is deeply embedded within organizational routines and is tacitly dispersed among its members (Lumpkin and Dess 1996; Mosakowski 1998). Therefore, as maintained by the resource-based as well as resource advantage views, enviropreneurship is a valuable, intangible and socially complex capability that can provide the impetus to achieve supply-wide sustainability (Hunt and Morgan 1996).

Having discussed the strategic importance of enviropreneurship, the next logical step is to rationalize how an enviropreneurial orientation is instrumental in pursuing SSM. First, firms can easily meet the current mandated requirements of environmental performance through initiatives focused within their organizational boundary (Handheld et al. 2004). Second, even external certifying agencies such as the International Organizations for Standards do not require organizations to engage their suppliers in environmental initiatives (Krut and Gleckman 1998). Therefore, most firms would rather focus on their internal processes and meet the minimum requirements of sustainability, thereby providing a potential competitive advantage for those that are willing to go beyond such institutional norms. With a behavioral culture that is accustomed to innovative, risk-taking and proactive behavior, an enviropreneurial firm can readily recognize such an opportunity and pursue pioneering pollution prevention and product stewardship initiatives that could ultimately lead to sustainability leadership (Lumpkin and Dess 1996; Mosakowski 1998). And, given that such pioneering sustainability initiatives are novel, risky and require resource endowments that often cross organizational boundaries, an enviropreneurial orientation will enable firms to reach out to their supply partners so as to gain access to essential relational capabilities (Dyer and Singh 1998; Atuahene-Gima and Ko 2001). Accordingly, enviropreneurship can provide a strong foundation for identifying and exploiting external capabilities that are essential for meeting, as well as exceeding the superior goals of sustainability performance (e.g., Park et al. 2002). Thus,

H1: Enviropreneurship is positively related to SSM.

As illustrated by organization scholars, an enviropreneurial orientation exemplifies the innovative, risk-taking and proactive nature of a firm, thereby suggesting that it can provide the impetus to acquire necessary resources and capabilities that are essential to respond to the requirements of the three Ps of people, profit and the planet (Ireland et al. 2001; Lee et al. 2001). Such an orientation can also help firms to foster innovations and stewardship activities that will significantly differentiate them from their competition (Hart 1995). And, through such innovative and proactive initiatives that simultaneously accommodate the environment, society and economic needs of an organization, enviropreneurship could ultimately help firms to not only generate greater wealth, but also achieve long-lasting competitive advantage (Menon and Menon 1997). Additionally, because enviropreneurship is an embedded organizational culture which is hard to imitate, it can serve as a valuable, intangible and socially complex capability that can help firms maintain their sustainability as well as their competitive edge over a longer term (Hunt and Morgan 1996). Therefore,

H2: Enviropreneurship is positively related to sustainability performance.

Strategic Purchasing. Strategic purchasing is increasingly considered as a critical driving force in the strategic management of the supply function. When strategic in nature, purchasing is not a mere buying function that is concerned with cost-based priorities. Rather, it is ready to adopt a proactive stance, and is willing to take risks that will unequivocally support the strategic direction of the firm (Paulraj, Chen and Flynn 2006). Thus, a purchasing function that possesses well-developed, as well as strategically oriented sourcing skills, is a rare resource that can help in breakthroughs that are hard for competitors to imitate (Ramsay 2001). Additionally, such a strategic orientation of the purchasing function is not achieved overnight. Rather, given that it takes a long lime to develop and is path dependent, strategic purchasing is a strategic firm-specific resource.

As a strategic resource that is crucial in facilitating close interactions with a firm's supply base, strategic purchasing can help in identifying and developing trustworthy suppliers that can support the achievement of long-term sustainability goals {Hunt and Davis 2D08). It can further facilitate the strategic management and evaluation of the supplier base (Zsidisin and Siferd 2001). For example, a strategic sourcing function can (1) ensure that suppliers adopt sustainable innovations in their operations and (2) allocate resources as well as assist key suppliers in adopting socially friendly practices (Green, Morton and New 1998; Walton, Handfield and Melnyk 1998; Mahler 2007). And, by increasing investments in relationship-specific assets that can generate greater trust, dependability and cooperation among supply partners, strategic purchasing can contribute significantly to sustainable supply-side practices (Dyer and Singh 1998). Thus, following the guidelines of Bowen et al. (2001), strategic purchasing is forwarded as a strategic resource that will have a positive impact on SSM.

H3: Strategic purchasing is positively related to SSM.

Apart from facilitating supply-side environmentally and socially responsible activities, a strategic purchasing function can also provide the context within which enviropreneurial innovations can be developed (Freeman and Cavinato 1990). It can help identify, as well as leverage, key relational capabilities that are crucial in accomplishing supply-wide enviropreneurial initiatives. A nonstrategic purchasing function, on the other hand, can inhibit the development of supply-side capabilities and create conditions of distrust, which could ultimately be detrimental to the adoption of environmental initiatives along the supply side (Zhu and Geng 2001; Chen et al. 2004). Therefore, as a key boundary-spanning resource, strategic purchasing is advantageously positioned to facilitate the enviropreneurial aspirations of the firm (Zsidisin and Siferd 2001; Carter and Jennings 2004). Accordingly, through its ability to identify and exploit untapped relational capabilities, strategic purchasing could significantly moderate the relationship between enviropreneurship and SSM. The discussion forms the basis of the following hypothesis:

H4: Strategic purchasing positively moderates the relationship between enviropreneurship and SSM.

Sustainable Supply Management. SSM focuses mainly on the sustainability of the upstream operations. Therefore, in line with past research, SSM is defined to encompass (1) supplier selection, (2) environmental collaboration and (3) supplier evaluation (e.g., Zsidisin and Siferd 2001; Vachon and Klassen 2006; Darnall et al. 2008). Appropriate selection of suppliers is essential as it determines their ability in advancing the environmental ambitions of a firm (Walton et al. 1998; Min and Galle 2001; Zhu and Geng 2001). After selecting suitable suppliers, it is important to manage them using a strategic and collaborative mindset. Broadly termed as environmental collaboration, this approach helps firms to develop and/or support the environmental prowess of the supply partner (Handfield, Walton, Seeger and Melnyk 1997; Klassen and Vachon 2003). It also signifies the firms' willingness to devote financial and resource commitments to address their environmental goals. In addition to appropriate selection and management of the supply function, supplier evaluation closes the loop by ensuring that the initiatives are in compliance with the ambitions of the firm. Supplier evaluation also involves the benchmarking of supply processes against evolving regulatory, and more importantly, voluntary codes of practice (Green, Morton and New 1998; Min and Galle 2001; Vachon and Klassen 2006). Thus, SSM is envisioned as a higher-order concept that simultaneously considers the entire process--selection, collaborative management and evaluation--of the supply function.

Appropriate selection of suppliers can help firms to identify and exploit relational capabilities so as to address current, as well as evolving, environmental challenges. The subsequent collaboration among supply partners can facilitate the formation of interfirm interaction routines that can enable the exchange of idiosyncratic assets, knowledge, resources and capabilities. These interaction routines are more likely to improve the total environmental impact of their existing products and reduce waste along the supply side (e.g., Handfield et al. 1997; Geffen and Rothenberg 2000; Klassen and Vachon 2003). Additionally, as posited by the resource advantage theory, collaborative management of complex supplier relationships can further help to design new socially superior products, as well as modify existing processes for better operational efficiencies (Darnall et al 2008; Wittmann, Hunt and Arnett 2009; Lao, Hong and Rao 2010; Pagell et al. 2010). SSM is thus an assortment of tacit relational capabilities which are socially created and not easily tradable in strategic factor markets (Reuter et al. 2010). Hence, following the resource advantage and relational views, SSM paves the way for environmentally sound supply-wide operations that can ultimately confer durable competitive advantages to the firm. Therefore,

H5: SSM is positively related to sustainability performance.

In addition to its direct impact on sustainability performance, SSM is also proposed as a mediator of the links between the antecedents (enviropreneurship and strategic purchasing) and sustainability performance. Sustainability initiatives aspiring for pollution prevention and, more importantly product stewardship, involve unique resource combinations that require relational competencies that cross organizational boundaries (Mart 1995; Atuahene-Gima and Ko 2001). Accordingly, the relational view can provide a robust theoretical framework for explaining the mediating effect of SSM. As per this view of strategic management, relational competencies developed through interfirm collaboration, enable firms to acquire or access rent-yielding resources and capabilities that can help advance the challenging, as well as entrepreneurial, aspirations of sustainability (Paulraj, Lado and Chen 2008). Consequently SSM can enable the synergetic combination of resources and capabilities between partners, and the formation of idiosyncratic exchange routines that can facilitate information and knowledge. It can also synergistically leverage interfirm resources/capabilities and help create complementary endowments that are more valuable, rare and difficult to imitate (Dyer and Singh 1998). Thus, SSM can serve as a critical mediating factor that better transmits the ambitions of enviropreneurship and strategic purchasing onto performance. This reasoning leads to the following hypothesis:

H6: SSM mediates the relationships between the antecedents (enviropreneurship and strategic purchasing) and sustainability performance.


Data Collection

Given that the survey instrument included both firm-specific as well as supply-side relationship-specific (dyadic) factors, individuals occupying strategic positions within the purchasing function were considered to be the most suitable to answer the questions posed in the survey. More specifically, responses were primarily sought from key respondents, including vice presidents or directors of purchasing, supply chain management and materials management. The target sample frame consisted of 2,500 members of the Institute for Supply Management (ISM) who worked in U.S. firms covered under multiple SIC codes (refer to Table 1 for the list of industries represented). Indicators representing most of the theoretical factors were captured using a 7-point Likert scale with end points of strongly disagree and strongly agree. On the other hand, indicators measuring buyer performance were operational-ized to assess the change in performance in the past 2-3 years. Accordingly, these indicators were captured using a 7-point Likert scale with end points of not at all and significant

 SIC Codes

 Sample Response
SIC Code Description Count Percent Count Percent

20 Food and kindred spirits 172 11.7 15 10.3

23 Apparel and other finished 17 1.2 1 0.7
 products made from fabrics
 and related materials

25 Office and household 21 1.4 1 0.7
 furniture and fixtures

28 Drugs, soaps, perfumes, 179 12.2 17 11.7
 cosmetics, etc.

29 Petroleum and coal products 25 1.7 2 1.4

35 Industrial machinery and 104 7.1 11 7.6

36 Household appliances, 249 17.0 24 16.6
 household audio and video

37 Transportation equipment 112 7.7 11 7.6

39 Miscellaneous manufacturing 587 40.0 63 43.4

Total 1466 145

Before data collection, the instrument was pretested using five supply chain management researchers and six senior purchasing executives affiliated with the ISM. These experts were asked to review the questionnaire for structure, readability, ambiguity and completeness (Dill-man 2000). Based on the suggestions made by them, minor changes were made to the final survey instrument. (3) Data were collected in two stages using bom mail and web survey techniques so as to (1) reduce the cost of data collection, (2) reduce any bias of using a single survey methodology, and (3) improve the quality of data beyond what is obtainable using a single survey methodology (Dillman 2000). During the first stage of data collection, a modified version of Dillman's total design method was adopted to collect data through a mail survey (Dillman 2000). The survey, along with a cover letter and postage-paid return envelope, was sent to 1,000 respondents randomly selected from the 2,500 member list. Two weeks after the initial mailing reminder postcards were sent. A second wave of mailing was sent to nonrespondents 5 weeks after the initial mailing. The mail survey resulted in a usable sample size of 102, with an effective response rate of 10.9 percent. (4) The second stage of data collection involving a web-based survey methodology was conducted 6 months later owing to investigator availability. Given that the e-mail addresses for the ISM members were not available, a consent form, along with a cover letter explaining the research project, was mailed to 466 potential participants selected randomly from the remaining list of 1,500 members. The web survey resulted in a usable sample size of 43, with an effective response rate of 12.18 percent. (5) The final usable sample, including both the mail and web survey, was 145 (6) with an effective response rate of 11.25 percent. Although this response rate is not as high, the sample size was considered to be sufficient for studying the research hypotheses (Hair, Anderson, Tatham and Black 1998). Moreover, given that senior purchasing executives are inundated with multiple requests to participate in supply chain surveys, this response rate is comparable to many recent studies within the fields of operations and supply chain management (e.g., Schoenherr and Mabert 2008; Braunscheidel and Suresh 2009; Wouters, Anderson, Narus and Wynstra 2009).

Nonresponse bias was assessed by comparing the responses of early and late waves of returned surveys (Armstrong and Overton 1977). The final sample was split into two groups based on the dates the responses were received. The early-wave group consisted of 74 responses, while the late-wave group consisted of 71 responses. This analysis included 25 randomly selected variables in addition to four demographic variables. T-tests performed on the two groups yielded no statistically significant differences (at p<0.01). The responses were also split as mail (102 responses) and web (43 responses) surveys; early (51 responses) and late respondents (51 responses) within the mail survey; and early (23 responses) and late respondents (20 responses) within the web survey. T-tests performed on the two groups within each of these cases yielded no statistically significant differences as well (at p<0.01). in addition, 250 companies were randomly selected from the list that did not respond, and information on number of employees and annual sales volume was collected (Chen and Paulraj 2004). To obtain the population mean value, the information on these 250 companies was combined with the 145 responding firms. The sample and the population means of demographic variables were compared for any significant differences. The r-tests performed yielded no statistically significant differences (at p<0.01) between the sample and population. Finally, a chi-square test was performed to determine whether the representation of SIC codes was different among respondents and nonrespondents. The entire sample of 1,466 firms was included in this test. The results for the Pearson chi-square test ([x.sup.2] =1.86; p=0.99) and the likelihood ratio test ([x.sup.2]=2.05; p=0.98) suggest that there is no significant difference among the two groups (Schoenherr and Mabert 2008; Braunscheidel and Suresh 2009). These results collectively suggest that nonresponse may not be a serious problem.


Most of the theoretical constructs in this study were adopted from past research. The construct of enviropreneurship is adopted from the Menguc and Ozanne (2005) study and included items that measure an organization's inclination to adopt bold, proactive and innovative environmental initiatives. Strategic purchasing is adopted from the Chen and Paulraj (2004) study. Following past research, SSM is conceptualized as a second-order factor including supplier selection, environmental collaboration and supplier evaluation (Zhu, Sarkis and Lai 2008). Supplier selection includes items that tap the extent to which the firm selects their potential suppliers based on their environmental competence and environmental performance (Min and Galle 2001; Zhu and Geng 2001; Zhu and Sarkis 2004). Environmental collaboration includes indicators that measure the extent to which firms (1) cooperate with their suppliers to develop environmental strategies and (2) provide suppliers with materials, equipment, specifications, as well as services to support their environmental goals (Zhu and Sarkis 2004). Supplier evaluation includes items that capture the extent to which firms regularly monitor suppliers' (1) internal operations, (2) environmentally friendly goods and (3) environmental performance (Zhu and Sarkis 2004).

Following the guidelines of past research on sustainable supply chain management, performance is operationalized as a second-order factor covering the economic, environmental and social dimensions of sustainability (Carter and Rogers 2008). Economic performance is measured by indicators tapping the dimensions of (1) cost, (2) return on investments and (3) earnings per share (Zhu and Sarkis 2004; Menguc and Ozanne 2005). Environmental performance is measured by indicators covering improvements along dimensions such as (1) air emission, (2) waste, (3) consumption of hazardous materials, (4) environmental accidents and (5) energy savings (Zhu and Sarkis 2004). Finally, social performance is measured using newly developed indicators covering improvements along dimensions including (1) social welfare and betterment, (2) community health and safety, (3) risks to the general public and (4) occupational health and safety of employees (Bansal 2005).

Given the significant impact of firm size on performance, sustainability was specifically controlled by including the number of employees and annual sales volume as measures of firm size (Paulraj et al. 2008). Both these variables were operationalized using ordinal scales. Therefore, they were included as dummy variables. The number of employees was included as a dummy variable with firms having [less than or equal to] 500 employees coded as 0 and firms having >500 coded as 1. Annual sales volume was coded as 0 for firms with annual sales volume <US$100 million and as 1 for firms with annual sales volume [greater than or equal to]US$100 million. The cutoff values were adopted from past research (Paulraj et al. 2008).

Common Method Variance (CMV)

Given that a single respondent was used to collect data on both predictor as well as outcome variables, design and methodological approaches were taken to ensure that CMV was not an issue. At the outset, the survey instrument was designed to eliminate the effect of CMV. The predictor and the outcome variables were designed to use different scale endpoints to diminish any methodological biases caused by commonalities. Verbal labels were also provided for the midpoints of the theoretical constructs to eliminate any acquiescence bias (Tourangeau, Rips and Rasinski 2000; Podsakoff, MacKenzie, Lee and Podsakoff 2003). In addition to these procedures, the potential for CMV was also assessed methodologically using the Harmon's confirmatory factor analysis (CFA) approach (Olson, Slater and Hult 2005). According to this test, common method bias is an issue if a single latent factor accounts for all indicators. On the other hand, a worse fit for the single-factor model suggests that CMV does not pose a serious threat. Indicators for all eight theoretical constructs (as given in Appendices A and B) were included in this analysis. The fit for the single-factor model ([x.sup.2]=6958.28, df=860; RMSEA=0.22) was considerably worse than the eight-factor model ([x.sup.2]= 1572.76, df=828; RMSEA=0.08), suggesting that CMV is a nonissue.

Instrument Development

Before evaluating the authenticity of the measurement instrument, the indicators were tested for normality. As an initial step, the univariate skewness and kurtosis statistics of the variables were assessed. Past research suggests that the absolute value of univariate skewness and kurtosis should be < 2 and 7, respectively (Curran, West and Finch 1996). The maximum absolute values of skewness and kurtosis of the indicators were found to be 1.46 and 1.84, respectively, suggesting that they follow the assumptions of univariate normality. Additionally, multivariate normality was also assessed using the Mardia's coefficient, which was found to be 1.11. This value falls well within the recommended value of--1.96 to 1.96, suggesting that the variables satisfy the requirements of multivariate normality (Mardia 1970). Construct validity was established using CFA (refer to Appendices A and B for the results). Two different measurement models were evaluated due to sample size restrictions (Chen and Paulraj 2004). This approach was chosen because a single measurement model would have clearly exceeded the five-to-one ratio of sample size to parameter estimates that was recommended by Bentler and Cho (1988). Following the guidelines provided by Campbell and Fiske (1959), the membership of indicators within the different measurement models was driven by the theoretical as well as measurement (scale endpoints) similarities between the indicators. One of the measurement models included the sustainability performance factors and the other model included all the remaining factors. This approach has been used in several previous studies to overcome the limitations of low sample size (Moorman 1995; Chen and Paulraj 2004; Song, Dyer and Thieme 2006). The model fit indices for the CFA models show that the model fits the data well, and hence establishes unidimensionality. The standardized coefficients, [R.sup.2] values further suggest that all indicators are significantly related to their underlying theoretical constructs, and thus establish construct validity (Paulraj et al. 2008). During these analyses, two indicators were deleted due to poor psychometric properties.

Discriminant validity was established by comparing the squared correlation between two latent constructs to their respective average variance extracted (AVE) estimates (Fornell and Larcker 1981). According to this test, discriminant validity exists if the squared correlation between each pair of constructs is less than the AVE for each individual construct. Comparing the correlation coefficients given in Table 2 with the AVE values given in Appendices A and B, none of the squared correlations was found to be higher than the AVE for each individual construct. Reliability was assessed using (1) internal consistency method via Cronbach's [alpha] (Nunnally and Bernstein 1994), and (2) composite reliability (Bagozzi and Yi 1988). All constructs had a Cronbach's [alpha] as well as CR > 0.70 (see Appendices A and B). This result establishes the reliability of all constructs. In addition, the AVE values for all constructs, except economic performance, exceeded the threshold value of 0.50. Taken together, the results from the instrument development process show that the theoretical, constructs exhibit good psychometric properties.

Construct Correlations

Factors Mean Standard ENV SP SS SE EC

Enviropreneurship 4.343 1.409 1.00

Strategic 5.516 1.225 0.26 1.00
purchasing (SP)

Supplier selection 3.907 1.401 0.66 0.37 1.00

Supplier 3.359 1.640 0.48 0.22 0.68 1.00
evaluation (SE)

Environmental 4.097 1.436 0.57 0.34 0.71 0.73 1.00

Economic 4.653 1.166 0.44 0.27 0.40 0.41 0.35
performance (ECP)

Environmental 4.918 1.328 0.54 0.35 0.51 0.44 0.54
performance (ENP)

Social performance 4.939 1.208 0.59 0.41 0.55 0.43 0.52



purchasing (SP)

Supplier selection

evaluation (SE)


Economic 1.00
performance (ECP)

Environmental 0.55 1.00
performance (ENP)

Social performance 0.63 0.67 1.00

Finally, to methodologically validate the support provided by past literature, the Marsh and Hocevar's (1985) target coefficient (t)-statistic was used to test whether the second-order conceptualization of SSM and sustainability performance were better in comparison to their respective first-order models. The target coefficient value is measured as a ratio of the chi-square value of the first-order factor model to that of the second-order factor model. According to this test, the appropriateness of the second-order model is stronger as the t-statistic approaches 1. The target coefficient value for SSM and sustainability were 0.98 and 0.96, respectively, suggesting that the second-order representation accounts for higher variance among the respective first-order factors. Additionally, all second-order factor loadings were significant, thereby providing a strong justification for the second-order representation of SSM and sustainability performance.

Hypothesis Testing

The hypothesized full structural model was tested using LISREL. In the case of second-order factors, the summated scores of first-order factors were used as indicators. The summary statistics and the correlation matrix for the theoretical constructs are presented in Table 2. The model parameters were estimated using the method of maximum likelihood. The value for the fit indices as given in Table 3 shows that the model (Model 1) fits the data very well. The hypothesized relationships were tested using their associated t-statistics (Hair et al. 1998). This model (Model 1) included all hypotheses except for the moderation effect of strategic purchasing and the mediation effect of SSM. As illustrated later in this section, these two effects were tested using additional models. The results for the hypothesized model are presented in Table 3. In light of the low sample size, the model was also tested for its statistical power. First, the RMSEA value was found to be 0.057 with a 90 percent confidence interval of 0.041-0.073, suggesting adequate model fit. Additionally, with df of 156 and sample size of 145, the statistical power using the test of close fit was found to be 0.95, suggesting that there is a very low likelihood that an inappropriately conceptualized model will not be rejected (MacCallum, Browne and Sugawara 1996).

Results of Structural Equation Modeling-Based Mediation Analysis

 Model 1 (a) Model 2 (b) Model 3 (c) Model 4 (d)

Structural paths

Enviropreneurship 0.69 ** 0.72 ** 0.69 ** -
[right arrow]
Sustainable supply

Strategic 0.22 ** 0.24 ** 0.20 ** -
purchasing [right
arrow] Sustainable
supply management

Sustainable supply 0.47 ** 0.76 ** 0.32 ** 0.32 *
management [right

Enviropreneurship 0.33 ** - 0.38 ** 0.38 **
[right arrow]

Strategic - - 0.24 ** 0.24 **
purchasing [right

Model fit

[X.sup.2] 255.85 262.63 244.55 243.84

df 156.00 157.00 155.00 153.00

AGFI 0.81 0.81 0.82 0.80

CFI 0.96 0.95 0.96 0.92

NFI 0.90 0.90 0.90 0.89

NNFI 0.95 0.94 0.95 0.92

RMSEA 0.06 0.06 0.05 0.07

PNFI 0.74 0.74 0.74 0.73

AIC 334.62 343.03 331.01 337.99

CAIC 552.73 553.80 549.73 561.30

Variance explained

Sustainability 0.59 0.62 0.63 0.62

(a) Hypothesized model.

(b) Full mediation model.

(c) Partial mediation model.

(d) Direct model.

** t-values significant at p [less than or equal to] 0.01.

* t-values significant at p [less than or equal to] 0.05.

The hypotheses linking the antecedents to SSM (H1 and H3) were statistically significant and in the expected direction. Specifically, (he paths leading to SSM from: (1) enviropreneurship (b=0.69; t=6.75; p < 0.01); and (2) strategic purchasing (b=0.22; t=3.15; p < 0.01) were statistically significant. H2 positively links enviropreneurship with performance. The parameter estimate for this path was significant and in the expected direction (b=0.33; t=2.84; p < 0.01). Similarly, the estimate for the path related to 115 linking SSM and performance was also significant and in the expected direction (b=0.47; t=3.67; p < 0.01). Out of the two control variables, only the number of employees was found to be significantly related to performance (b=0.16; t=2.17; p<0.05).

Mediation Analysis

The mediating effect of SSM was tested using the structural equation modeling approach suggested by James, Mulaik and Brett (2006). The hypothesized model (Model 1) was compared with two additional models to test for the mediation effect of SSM. The first model was a full mediation model (Model 2) that included paths from the antecedents (enviropreneurship and strategic purchasing) to SSM and from SSM to performance (refer to Figure 2). All paths were positive and statistically significant. The results for Model 2 empirically document that SSM may mediate the links between the predictor variables and performance. A partial mediation model (Model 3) was also analyzed to closely examine the extent to which SSM partially or fully mediates the relationship between the antecedents and performance (Paulraj et al. 2008). In addition to the paths in the hypothesized model (Model 1), this partial mediation model also adds direct paths from strategic purchasing to performance suggesting that SSM partially mediates the relationship between both the antecedent variables and performance (refer to Figure 3). The results of these models are presented in Table 3.


As shown in Table 3, the model fit statistics generally suggest that the partial mediation model (Model 3) fits the data relatively well. In addition to these model fit indices, AIC and CMC clearly indicate that Model 3 is better man Model 1 which is better than Model 2. All the hypothesized relationships in the three models were significant at the p < 0.01 level providing support for the efficacy of these models. In addition, the path significance in Model 3 was checked to specifically test the mediating role of SSM. The direct link between enviropreneurship and performance was found to be significant (b=0.38; t=3.41; p< 0.01), indicating that the effect of enviropreneurship on performance is partially mediated by SSM. Similarly, as indicated in Table 3, the direct link between strategic purchasing and performance was also found to be significant (b=0.24; t=3.26; p < 0.01), indicating that the effect of strategic purchasing on performance is also partially mediated by SSM. In addition to the above models, a direct model (Model 4) was also evaluated to further establish the key mediating role of SSM (refer to Figure 4). In this, enviropreneurship, strategic purchasing and SSM were directly related to performance. In comparison to the other three models, this direct model performed worse across most fit indices, AIC and CAIC values. Additionally, only two of the three paths were found to be significant at p<0.01. Taken together, these results provide adequate support to H6, suggesting that SSM mediates the relationship between the antecedents and performance.


Moderation Analysis

The moderating effect of strategic purchasing was tested using the deviation score approach in LISREL (Algina and Moulder 2001). Because enviropreneurship and strategic purchasing have five and seven indicators, respectively, the cross products of these two sets of indicators would result in 35 interaction terms (in addition to the 18 indicators that were used in Model 1). Given such a large number of indicators (53) and a moderate sample size (145), a partial disaggregated structural modeling approach was adopted to test H4 (Menor and Roth 2008). A partial disaggregation model was considered the most appropriate due to its ability to produce similar results as the total disaggregation (full structural) model, while simultaneously helping in addressing large sample requirements, reducing random errors and partially accounting for measurement errors (Bagozzi and Heatherton 1994; Hall, Snell and Singer-Foust 1999). In a partial disaggregation model, indicators within a construct are randomly combined into composites so that there are two or three combined indicators instead of several single-item indicators (Gibbons and Hocevar 1998). The indicators within enviropreneurship and strategic purchasing were randomly combined into three composite indicators and were centered before computing the nine cross-product terms.

Two partial disaggregation models were evaluated. The first partial disaggregation model included all the relationships tested in Model 1. Although not required, this model was assessed just to compare it with the total model (i.e., Model 1). The fit indices, path loadings and path significances of this model were similar to Model 1, thereby authenticating the use of a partial disaggregation model in testing H4. The second partial disaggregation model extended the first by including an additional latent construct representing the nine cross-product indicators. Analysis of the second interaction model showed a poor model fit (e.g., NFI=0.88; NNFI=0.89; RMSEA=0.11). Additionally, the path from the latent interaction construct to SSM was insignificant (b=0.01; t=0.10; NS). Therefore, H4 was not supported, suggesting that strategic purchasing does not moderate the relationship between enviropreneurship and SSM.


Extant research within strategic management has highlighted the key role that firm-specific and relation-specific capabilities can play in achieving sustained competitive advantage (e.g., Hart 1995; Dyer and Singh 1998). Therefore, it is time to extend research in SSM by looking beyond external pressures as antecedents. With this belief in mind, the current study adopts the resource-based, resource advantage and relational views to empirically validate the importance of firm-specific and relational capabilities in promoting sustainability. By considering firm-level as well as relational capabilities in conjunction, and simultaneously studying direct, mediation and moderation effects among them, this study also documents the combined effect of these capabilities in achieving organizational sustainability. In summary, by increasing our understanding of emerging models of SSM, this study makes a significant contribution to the current literature.

The first hypothesis (H1) suggested that enviropreneurship can increase the adoption of SSM, which is vital to access relational capabilities helpful in responding to the requirements of sustainability. The strong support for this hypothesis suggests that enviropreneurship can help firms to acquire, as well as develop, new capabilities that can disrupt existing sustainability norms; and leverage them innovatively to better preserve the environment as well as society (Atuahene-Gima and Ko 2001; Ireland et al. 2001). The support for H2 further suggests that enviropreneurship is a socially complex combination of tacit skills and knowledge that can help firms to achieve competitive advantage through superior sustainability performance. This overwhelming empirical support for enviropreneurship suggests that top management within firms that aspire to lead in the race toward sustainability must embrace an entrepreneurial orientation toward the environment. Additionally, given the significance of human capital in generating a wealth of knowledge, employees at all levels must be empowered to approach sustainability initiatives through dreaming, exploring, creating, pioneering and inventing. If so, the key tenets of enviropreneurship--innovation, risk propensity and proactiveness--can provide the impetus to break away from mandated norms, and help firms to develop product, process and supply-wide innovations. And, more importantly, such a forward-focused directive will enable firms to significantly involve supply-side partners in collaborative sustainability initiatives that can significantly differentiate them from their competition.

Supply management scholars purport that a strategically oriented purchasing function can help to identify, as well as exploit, untapped competencies and knowledge available in the supply chain (e.g., Chen et al. 2004; Monczka and Markham 2007). The result for H3 extends this notion by suggesting that a strategic purchasing function is also in a unique position to (1) assess the appropriateness of supplier capabilities in meeting the environmental requirements and (2) allocate resources to assist suppliers in adopting environmentally friendly practices (Bowen et al. 2001; Cousins, Lamming and Bowen 2004). The significant impact of strategic purchasing clearly suggests that top management should strongly consider elevating the stature of their purchasing function. This will help the purchasing function to focus more on long-term goals and understand the strategic capabilities of suppliers. As a result, this key boundary-spanning resource could serve as a conduit to gain access to supply-related capabilities through the practice of behavioral repertoires built around trust and cooperation. Such behavioral repertoires can consequently enable firms to collaborate with their suppliers in designing green products and processes, eliminating waste and lowering unnecessary costs.

In addition to its direct effects, strategic purchasing was also hypothesized to be able to identify, as well as leverage, key supply-side capabilities essential for enviropreneurial aspirations. Surprisingly, significant support was not found for this moderating role of strategic purchasing (H4). On the one hand, this result reaffirms past observations suggesting that the strategic level of purchasing within firms need not be indicative of their motivation to undertake entrepreneurial supply-wide practices (Bowen et al. 2001). On the other hand, it clearly suggests that enviropreneurship is a disequilibriating force that need not pay much attention to the resources available at a firm's disposal {Ireland et al. 2001). And, given that it envelops "the exploitation of profitable opportunities" (Shane and Venkataraman 2000, p. 217), enviropreneurship can rather enable firms to see beyond the confines of their resources and identify opportunities that could lead to significant competitive advantage (Keogh and Polonsky 1998). Thus, managers need to realize that even though it can enable cross-organizational capabilities; just the existence of a strategic purchasing function alone cannot help in achieving the lofty goals of sustainability. Rather, their first plan of action should be to inspire an enviropreneurial orientation within their organization. Once such an orientation is nurtured, they can then count on strategic purchasing to augment enviropreneurship by enabling interfirm interactions, thereby resulting in better sustainability performance.

The finding of a significant link between SSM and sustainability performance (H5) provides empirical support for the notion that SSM is a relational capability that can enable firms to (1) gain access to resources, (2) learn new capabilities and (3) combine these relation-specific resources and capabilities in unique and collaborative ways, thereby realizing competitive advantage over competing firms that are unable to do so. The hypothesized model also suggests that SSM mediates the links between the antecedents--enviropreneurship and strategic purchasing--and sustainability performance (H6). Based on an in-depth mediation analysis, SSM was found to partially mediate the relationship between enviropreneurship and sustainability performance. At the basic level, this result signifies the important role that SSM can play in achieving the enviropreneurial aspirations of the focal firm. More specifically, given that emergent pollution prevention and product stewardship strategies enabled by enviropreneurial orientation may rely more heavily on capabilities that cross organizational boundaries, supply partners can play an invaluable role in influencing the sustainable innovations of firms (Dyer and Singh 1998; Min and Galle 2001; Zsidisin and Siferd 2001). Therefore, managers must realize the importance of initiating sustainable practices earlier along their supply chain. In addition to significantly reducing the total environmental impact, such an approach can also enable them to gain access to resources, ideas, technologies and human capital, as well as relational capabilities that can support their aspirations to innovate, grow and, more importantly, attain organizational sustainability. The relational capabilities gained through such a collaborative arrangement will ultimately enable them to combine cross-organizational complementary resources in unique ways and realize sustainable advantage over their competing firms (Hunt and Davis 2008; Lao et al. 2010; Pagell et al. 2010).

Finally, the superiority of the partial mediation model (Model 3) further suggests that strategic purchasing could also impact sustainability performance directly. Although not explicitly hypothesized, this result follows the resource advantage theory in sending a strong and positive message regarding the superiority of the purchasing function. But the transformation from a buying function into a strategic purchasing function is complicated and involves a complete realignment of the function in terms of its strategic focus. Accordingly, top management should diligently recognize the strategic nature of the purchasing function by measuring purchasing performance in terms of its contributions to the firm's success, and by training purchasing professionals in cross-functional areas and elements of the competitive strategy (Paulraj et al. 2006). Through such a strategic stature, the purchasing function can facilitate the integration of supply partners in design and development initiatives that can help in generating and sustaining competitive advantage (Hunt and Davis 2008). Through its proactive and innovative management of the supply side, the purchasing function can eventually influence the focal firm's environmental behavior as well. That is, sustainable supply initiatives driven by a strategic purchasing function could also be taken seriously by other internal functions, thereby leading to a company-wide adoption of sustainable practices (Cousins et al. 2004). Thus, strategic purchasing can serve as a strategic resource that can directly stimulate internal sustainability initiatives as well (Bowen et al. 2001; Chen et al. 2004).


Recognizing the importance of evaluating strategic resources and capabilities, this study has sought to advance research in SSM by considering a model relating enviropreneurship, strategic purchasing, SSM and sustainability performance. From a practical viewpoint, the study shows that, in addition to external stakeholder pressures, firm-specific capabilities can also have a significant influence on the environmental, social and economic performance of firms. Furthermore, SSM is showcased as a socially complex relational capability that can function as a crucial mediator of the relationship between firm-specific resources/capabilities and organizational sustainability. This finding clearly extends past research by suggesting firms pay greater attention to supply-wide capabilities that can play a dominant role in their innovative, as well as emergent, sustainability initiatives. Accordingly, firms must not only develop unique internal resources/capabilities, but they must consequently leverage them to (1) identify strategic partners, (2) manage them collaboratively and (3) further evaluate them to meet future sustainability goals and requirements. If so, firms will be able to capitalize on markets of the future, establish better societal relationships and, more importantly, improve their social stature and reputation (Shrivastava 1995; Porter and Kramer 2006).

At this juncture, the limitations of the study are provided with the ambition of discussing opportunities for further research. First, this study is parsimonious in nature and includes only two strategic antecedents. Thus, in the future, researchers should include other factors within the domain of strategic resources and capabilities. In addition to environmental proclivity and top management sensitivity, researchers should also include internal (firm-level) sustainability competency to understand its broader importance in promoting SSM. Additionally, future research could also study the impact of relational antecedents (e.g., long-term relationship orientation, interorganizational communication and supplier involvement) on SSM and sustainability. Second, this research conceptualized SSM to measure the environmental aspects of supply management. Future research should expand this operationalization by including social aspects such as philanthropy, diversity and human rights (Carter and Jennings 2004). In addition, future research should also try to link a three-dimensional operationalization (environmental, social and economic) of SSM to a similar three-dimensional operationalization of sustainability performance. Another limitation of this research relates to the sample population. Although the final sample covered a wide range of industries in terms of SIC codes, the population was drawn only from the ISM membership. Future research should increase the scope of generalizability by replicating this study using a mixed population of respondents from multiple domestic and international sources. Finally, this study focused on the dyadic relationship as the unit of analysis. Future research should adopt a broader unit of analysis including triads as well as networks, and examine sustainable practices from the supplier as well as customer viewpoints. In spite of these limitations, this study makes a compelling case for considering the importance of various firm-specific resources and capabilities in leveraging relational capabilities for gains across the economic, environmental and social pillars of organizational sustainability.

* The author would like to thank the University of North Florida and the Institute for Supply Management (ISM) for their financial and/or administrative support of this research.

(1) Given its entrepreneurial nature, an enviropreneurial orientation can be considered a fundamental behavior of firms that will enable them to not just look at the minimum requirements, but rather to exploit wide-ranging opportunities presented by supply-wide sustainability initiatives (Ireland, Hitt, Camp and Sexton 2001). And, as Schumpeter (1939) points out, enviropreneurship is a "process of creative destruction" that can address broader sustainability concerns through a "disequilibriating force" that constantly challenges the status quo. Accordingly, enviropreneurship can serve as a much stronger force that clearly signals the presence of environmental proclivity and top management sensitivity within firms. And, given its very nature, it can help firms to reach out to their suppliers and develop relational capabilities that can eventually lead to a broader sustainability performance.

(2) Other terms such as performance, sustainability performance, and sustainability are also used in the manuscript. All these outcome-related terms refer to organizational sustainability. And, as organizational sustainability can be achieved only at the intersection of economic, environmental, and societal considerations, it is measured along these three dimensions (Carter and Rogers 2008).

(3) The survey instrument was four pages long and included many other factors that are not part of this manuscript. The expert comments were largely favorable and applauded the richness of the survey instrument. Two experts suggested minor changes. But, given that these changes were not related to indicators included in this study, they are not explicitly mentioned in the manuscript.

(4) Out of the 1,000 surveys mailed, 38 were returned due to address discrepancies. Additionally, 26 declined to participate in the survey due to various reasons including company policy, in appropriateness of the survey topic, etc. From the remaining 936 participants, 114 responses were received resulting in a response rate of 12.2%. After discarding 12 incomplete responses, the usable sample size was 102.

(5) Out of the 466 consent forms mailed, 47 were returned as they were not deliverable. Out of the remaining 419, 125 returned the consent form resulting in a potential sample size of 30%. But 66 out of these 125 participants declined to participate in the survey due to various reasons including company policy, etc. Taking this into account, the final list, including those who did not return the consent form, was 353 (419-66). initial emails were sent to the 59 participants who consented to participate in this study. Multiple reminder emails were sent to these respondents over the next five weeks. A total of 44 responses were received resulting in a response rate of 12.46% (44/353). After discarding one incomplete response, the usable sample size was 43 (a response rate of 12.18%). But if the sample was restricted to those who consented to participate in the web survey, the effective response rate is approximately 73%.

(6) The final sample included 34 presidents/vice presidents (23.4%), 71 directors (49%), 31 purchasing managers (21.4%), and 9 others (6.2%). The respondents worked primarily for medium to large firms with nearly 35% working for firms employing more than 1,000 employees. Nearly 73% of the firms had a gross income of greater than $100 million, in general, the respondents were evenly distributed with respect to the annual sales volume. The distribution of respondents across different SIC codes is presented in Table 1. Approximately 37 respondents had over 10 years of experience in SSM initiatives. In addition, on average, the respondents had 5.8 years of experience in green initiatives, suggesting that the respondents had the required knowledge and experience to answer the questions posed in the study.


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Antony Paulraj (D.B.A., Cleveland State University) is an associate professor in the Coggin College of Business at the University of North Florida in Jacksonville, Florida. His research interests focus on sustainable supply chain strategies, supply chain management, strategic supply management, collaborative relationships, interorganizational systems and supply integration. Dr. Paulraj's papers have appeared, or are forthcoming, in a variety of academic publications including Business Strategy and the Environment, the International Journal of Operations and Production Management, the International Journal of Production Research, and the Journal of Operations Management.

Measurement Instrument for Antecedents and Sustainable Supply

Indicator (Cronbach's [alpha]; Standard t-Value * [R.sup.2]
Composite Reliability; Average Coefficient
Variance Extracted)

Enviropreneurship ([alpha]=0.94;
CR=0.95; AVE=0.79)

Our organization has a cultural 0.88 - 0.77
emphasis on innovation and R&D in
environmentally friendly

Our organization has a high rate 0.90 15.96 0.81
of environmentally friendly
product introductions

We have a bold, innovative, 0.94 17.52 0.88
environmentally friendly product
development approach

Our organization has a proactive 0.90 15.93 0.81
posture to the environmental

Our organization is one of the 0.82 13.31 0.68
first to introduce new
environmentally friendly
technologies and products

Strategic purchasing
([alpha]=0.94; CR=0.93;

Purchasing is included in the 0.80 - 0.64
firm's strategic planning

The purchasing function has a 0.79 19.26 0.63
good knowledge of the firm's
strategic goals

Purchasing performance is 0.75 9.92 0.56
measured in terms of its
contributions to the firm's

Purchasing professionals' 0.77 10.23 0.59
development focuses on elements
of the competitive strategy

Purchasing is considered to be a 0.92 13.09 0.84
vital part of our corporate

The chief purchasing officer has 0.81 10.90 0.66
high visibility within top

Top management emphasizes the 0.87 12.06 0.75
purchasing function's strategic

The purchasing function has a
formally written long-range plan

Supplier selection ([alpha]=0.96;
CR=0.96; AVE=0.83)

We select suppliers based on 0.93 - 0.87
their environmental competence

Suppliers are selected based on 0.92 20.73 0.86
their ability to support our
environmental objectives

We select suppliers based on 0.86 16.77 0.74
their technical and eco-design

We select suppliers based on 0.94 22.16 0.89
their environmental performance

We select suppliers based on 0.89 18.57 0.80
their ability to develop
environmentally friendly goods

Environmental collaboration
([alpha]=0.95; CR=0.95;

We cooperate with our suppliers 0.85 - 0.73
to achieve environmental

We provide our suppliers with 0.88 14.00 0.78
design specification that include
environmental requirements for
purchased items

We encourage our suppliers to 0.82 12.55 0.67
develop new source reduction

We cooperate with our suppliers 0.88 14.12 0.77
to improve their waste reduction

We work with our suppliers for 0.91 15.31 0.83
cleaner production

We collaborate with our suppliers 0.94 16.30 0.89
to provide materials, equipment,
parts and/or services that
support our environmental goals

Supplier evaluation
([alpha]=0.94; CR=0.94;

We conduct regular environmental 0.87 - 0.75
audits into our suppliers'
internal operations

We periodically evaluate our 0.97 17.90 0.94
suppliers' environmentally
friendly practices

We make site visits to suppliers' 0.91 15.88 0.82
premises to help them improve
their eco-performance

We encourage our suppliers to get
their ISO 14000 certification(a)

Model fit indices: Normed [X.sup.2] = 1.40 ([less than or equal to]
2.0); normed fit index=0.91 ([greater than or equal to] 0.90);
nonnormed fit index=0.96 ([greater than or equal to] 0.90);
comparative fit index=0.97 ([greater than or equal to] 0.90); adjusted
goodness of fit index=0.81 ([greater than or equal to] 0.80); root
mean square error of approximation=0.05 ([less than or equal to]
0.08); root mean square residual=0.05 ([less than or equal to] 0.08).

(a) Items dropped during instrument development process.

* All t-values are significant at p [less than] 0.01 level.


Measurement Instrument for Sustainability Performance

Indicator (Cronbach's [alpha]; Standard t-Value * [R.sup.2]
Composite Reliability; Average Coefficient
Variance Extracted)

Economic performance
([alpha]=0.84;CR=0.81; AVE=0.47)

Decrease in cost of materials 0.62 - 0.38

Decrease in cost of energy 0.68 6.23 0.46

Decrease in fee for waste 0.61 5.68 0.37

Improvement in return on 0.75 6.55 0.56

Improvement in earnings per share 0.73 6.44 0.53

Environmental performance
([alpha]=0.92; CR=0.92; AVE=0.69)

Reduction in air emission 0.87 - 0.76

Reduction in waste (water and/or 0.86 15.73 0.75

Decrease in consumption of 0.75 10.81 0.56
hazardous/harmful/toxic materials

Decrease in frequency for 0.80 12.03 0.65
environmental accidents

Increase in energy saved due to 0.85 13.49 0.73
conservation and efficiency

Social performance ([alpha]=0.92;
CR=0.91; AVE=0.68)

Improvement in overall stakeholder 0.77 - 0.60
welfare or betterment

Improvement in community health 0.76 13.51 0.58
and safety

Reduction in environmental impacts 0.94 10.53 0.89
and risks to general public

Improvement in occupational health 0.78 9.90 0.61
and safety of employees

Improved awareness and protection 0.84 10.72 0.71
of the claims and rights of people
in community served

Model fit indices: normed [x.sup.2]=1.56 ([less than or equal to] 2.0);
normed fit index=0.93 ([greater than or equal to] 0.90); nonnormed fit
index=0.96 ([greater than or equal to] 0.90); comparative fit
index=0.97 ([greater than or equal to] 0.90); adjusted goodness of fit
index=0.83 ([greater than or equal to] 0.80); root mean square error
of approximation=0.06 ([less than or equal to] 0.08); root mean square
residual=0.07 ([less than or equal to] 0.08).

(a) Items dropped during instrument development process.


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Author:Paulraj, Antony
Publication:Journal of Supply Chain Management
Article Type:Report
Date:Jan 1, 2011
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