Antecedents of green manufacturing implementation by local MSMEs in Indonesia
-
DOIhttp://dx.doi.org/10.21511/ee.14(2).2023.08
-
Article InfoVolume 14 2023, Issue #2, pp. 103-113
- Cited by
- 293 Views
-
116 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
This study aims to investigate the adoption of green manufacturing in the micro, small, and medium enterprises in Indonesia using the integrated framework. The paper used purposive sampling to select 258 micro, small, and medium enterprises in Indonesia that adopt green production processes to determine the supporting and inhibiting factors experienced in green manufacturing. Structural equation modeling with SmartPLS 3.0 application is used for data processing. The results show that the internal factors (organizational capabilities, internal competencies development, relative advantage, and organizational resources) affect green manufacturing implementation. This indicates that micro, small, and medium enterprises in Indonesia tend to adopt green manufacturing when they have organizational capabilities, internal competencies development, relative advantage, and organizational resources that support this practice. External factors that influence green manufacturing practices are government support. Indonesian micro, small, and medium enterprises consider that government support in the form of subsidies or regulations related to green practices will make it easier to adopt green manufacturing.
Acknowledgment
This study is funded by the Ministry of Education, Culture, Research and Technology of the Republic of Indonesia (Kementerian Pendidikan, Kebudayaan, Riset dan Teknologi Republik Indonesia). The scheme of the grant is Fundamental Research entitled “Implementasi Green Manufacturing dan Dampaknya pada Kinerja UMKM Industri Kerajinan Lokal dalam Rangka Pengentasan Kemiskinan di Indonesia”).
- Keywords
-
JEL Classification (Paper profile tab)D29, L23, L26, Q01
-
References55
-
Tables3
-
Figures0
-
- Table 1. Descriptive statistics
- Table 2. Validity and reliability test
- Table 3. Hypotheses testing results
-
- Aboelmaged, M. (2018). The drivers of sustainable manufacturing practices in Egyptian SMEs and their impact on competitive capabilities: A PLS-SEM model. Journal of Cleaner Production, 175, 207-221.
- Aboelmaged, M. G. (2014). Linking operations performance to knowledge management capability: The mediating role of innovation performance. Production Planning & Control, 25(1), 44-58.
- Aboelmaged, M., & Hashem, G. (2019). Absorptive capacity and green innovation adoption in SMEs: The mediating effects of sustainable organisational capabilities. Journal of Cleaner Production, 220, 853-863.
- Adbaidainya, I. (2021). Evaluation of green manufacturing implementation on regulation, costs, and knowledge. Jurnal Ekonomi Dan Bisnis Airlangga, 31(1), 64-73.
- Adebambo, H. O., Ashari, H., & Nordin, N. (2014). Antecedents and outcome of sustainable environmental manufacturing practices. International Journal of Management and Sustainability, 3(3), 147-159.
- Afum, E., Agyabeng-Mensah, Y., Sun, Z., Frimpong, B., Kusi, L. Y., & Acquah, I. S. K. (2020a). Exploring the link between green manufacturing, operational competitiveness, firm reputation and sustainable performance dimensions: A mediated approach. Journal of Manufacturing Technology Management, 31(7), 1417-1438.
- Afum, E., Osei-Ahenkan, V. Y., Agyabeng-Mensah, Y., Amponsah Owusu, J., Kusi, L. Y., & Ankomah, J. (2020b). Green manufacturing practices and sustainable performance among Ghanaian manufacturing SMEs: The explanatory link of green supply chain integration. Management of Environmental Quality: An International Journal, 31(6), 1457-1475.
- Alayón, C., Säfsten, K., & Johansson, G. (2017). Conceptual sustainable production principles in practice: Do they reflect what companies do? Journal of Cleaner Production, 141, 693-701.
- Alshamaila, Y., Papagiannidis, S., & Li, F. (2013). Cloud Computing Adoption by SMEs in the North East of England: A Multi-Perspective Framework. Journal of Enterprise Information Management, 26(3), 250-275.
- Amaranti, R., Irianto, D., & Govindaraju, R. (2017). Green manufacturing: A literature review. IDEC 2017 National Conference. Surakarta, Indonesia. (In Indonesian).
- Angeles, R. (2012). Wal-mart’s sustainable packaging scorecard initiative through the lens of the technology-organization-environment (TOE) framework. International Journal of Sustainable Strategic Management (IJSSM), 3(4), 270-281.
- Angeles, R. (2014). Using the technology-organization-environment framework for analyzing Nike’s considered index green initiative, a decision support system driven system. Journal of Management and Sustainability, 4(1), 96-103.
- Baah, C., & Jin, Z. (2019). Sustainable supply chain management and organizational performance: The intermediary role of competitive advantage. Journal of Management and Sustainability, 9(1), 119-131.
- Baah, C., Jin, Z., & Tang, L. (2020). Organizational and regulatory stakeholder pressures friends or foes to green logistics practices and financial performance: Investigating corporate reputation as a missing link. Journal of Cleaner Production, 247, 119125.
- Baah, C., Opoku-Agyeman, D., Acquah, I. S. K., Agyabeng-Mensah, Y., Afum, E., Faibil, D., & Abdoulaye, F. A. M. (2021). Examining the correlations between stakeholder pressures, green production practices, firm reputation, environmental and financial performance: Evidence from manufacturing SMEs. Sustainable Production and Consumption, 27, 100-114.
- Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 19-120.
- Basana, S. R., Siagian, H., Ubud, S., & Tarigan, Z. J. H. (2022). The effect of top management commitment on improving operational performance through green purchasing and green production. Uncertain Supply Chain Management, 10(4), 1479-1492.
- Belhadi, A., Kamble, S. S., Zkik, K., Cherrafi, A., & Touriki, F. E. (2020). The integrated effect of big data analytics, lean six sigma and green manufacturing on the environmental performance of manufacturing companies: The case of North Africa. Journal of Cleaner Production, 252, 119903.
- Belhadi, A., Zkik, K., Cherrafi, A., Yusof, S. M., & El fezazi, S. (2019). Understanding big data analytics for manufacturing processes: Insights from literature review and multiple case studies. Computers & Industrial Engineering, 137, 106099.
- Bhatia, M. S., & Jakhar, S. K. (2021). The effect of environmental regulations, top management commitment, and organizational learning on green product innovation: Evidence from automobile industry. Business Strategy and the Environment, 30(8), 3907-3918.
- Boone, L. E., & Kurtz, D. L. (2000). Introduction to business. Jakarta: Erlangga.
- Burki, U., Ersoy, P., & Najam, U. (2019). Top management, green innovations, and the mediating effect of customer cooperation in green supply chains. Sustainability, 11(4), 1031.
- Chen, T. (2017). Competitive and sustainable manufacturing in the age of globalization. Sustainability, 9(1), 26.
- DePietro, R., Wiarda, E., & Fleischer, M. (1990). The context for change: Organization, technology and environment. In L. G. Tornatzky & M. Fleischer (Eds.), The Processes of Technological Innovation (pp. 151-175). Lexington, MA: Lexington Books.
- Dornfeld, D. A. (2014). Moving towards green and sustainable manufacturing. International Journal of Precision Engineering and Manufacturing-Green Technology, 1(1), 63-66.
- Govindan, K., Kaliyan, M., Kannan, D., & Haq, A. N. (2014). Barriers analysis for green supply chain management implementation in Indian industries using analytic hierarchy process. International Journal of Production Economics, 147, 555-568.
- Ha, N. M., Nguyen, P. A., & Phung, N. B. H. (2022). Technological factors affecting green innovation: Evidence from the manufacturing sector in Vietnam. Ho Chi Minh City Open University Journal of Science: Economics and Business Administration, 12(1), 3-19.
- Hart, S. L. (1995). A natural-resource-based view of the firm. The Academy of Management Review, 20(4), 986-1014.
- Helfat, C. E., & Peteraf, M. A. (2003). The dynamic resource-based view: Capability lifecycles. Strategic Management Journal, 24(10), 997-1010.
- Hwang, B.-N., Huang, C.-Y., & Wu, C.-H. (2016). TOE approach to establish a green supply chain adoption decision model in the semiconductor industry. Sustainability, 8(2), 168.
- Indarti, N., & Langenberg, M. (2004). Factors affecting business success among SMEs: Empirical evidence from Indonesia. Proceedings of the Second Bi-Annual European Summer University (pp. 1-15). University of Twente, Enschede, The Netherlands.
- Kearns, G. S., & Sabherwal, R. (2006). Strategic alignment between business and information technology: A knowledge-based view of behaviors, outcome, and consequences. Journal of Management Information Systems, 23(3), 129-162.
- Kor, Y. Y., & Mahoney, J. T. (2004). Edith Penrose’s (1959) contributions to the resource based view of strategic management. Journal of Management Studies, 41(1), 183-191.
- Kousar, S., Sabri, P. S. U., Zafar, M., & Akhtar, A. (2017). Technological factors and adoption of green innovation: moderating role of government intervention: a case of SMEs in Pakistan. Pakistan Journal of Commerce and Social Sciences (PJCSS), 11(3), 833-861.
- Kusuma, M. W., & Wardhani, S. L. (2022). Study of PKLMalioboro Relocation Policy on Tourists’ Buying Interest to Increase Local Income in the Special Region of Yogyakarta during the Covid-19 Pandemic Era. Telaah Bisnis Journal, 23(2), 99-107.
- Leonidou, L. C., Christodoulides, P., Kyrgidou, L. P., & Palihawadana, D. (2017). Internal drivers and performance consequences of small firm green business strategy: The moderating role of external forces. Journal of Business Ethics, 140(3), 585-606.
- Li, Y., Ye, F., Dai, J., Zhao, X., & Sheu, C. (2019). The adoption of green practices by Chinese firms: Assessing the determinants and effects of top management championship. International Journal of Operations and Production Management, 39(4), 550-572.
- Loasby, B. J. (2006). Microfoundations of capabilities. DRUID Summer Conference 2006 on Knowledge, Innovation and Competitiveness: Dynamics of Firms, Networks, Regions and Institutions. Copenhagen, Denmark.
- Marín-Vinuesa, L. M., Scarpellini, S., Portillo-Tarragona, P., & Moneva, J. M. (2018). The Impact of Eco-Innovation on Performance Through the Measurement of Financial Resources and Green Patents. Organization & Environment, 33(2), 285-310.
- Ministry of Industry of Republic Indonesia. (2021). Implementing Green Industry, Energy Saving Manufacturing Sector Up to IDR 3.2 Trillion.
- Mittal, V. K., & Sangwan, K. S. (2014). Prioritizing barriers to green manufacturing: environmental, social and economic perspectives. Procedia CIRP, 17, 559-564.
- Noerirawan, M. R., & Muid, A. (2012). The influence of internal and external company factors on company value (Empirical study on manufacturing companies listed on the Indonesian stock exchange for the period 2007–2010). Diponegoro Journal of Accounting, 1(1), 582-593. (In Indonesian).
- Nunnally, J. C. (1978). Pshycometric Theory. New York: McGraw-Hill.
- Oxborrow, L., & Brindley, C. (2013). Adoption of ‘eco-advantage’ by SMEs: emerging opportunities and constraints. European Journal of Innovation Management, 16(3), 355-375.
- Qu, X., Khan, A., Yahya, S., Zafar, A. U., & Shahzad, M. (2022). Green core competencies to prompt green absorptive capacity and bolster green innovation: the moderating role of organization’s green culture. Journal of Environmental Planning and Management, 65(3), 536-561.
- Runyan, R. C., Huddleston, P., & Swinney, J. L. (2007). A resource based view of the small firm: Using a qualitative approach to uncover small firm resources. Qualitative Market Research, 10(4), 390-402.
- Saputra, R. H., & Nasution, O. B. (2022). The influence of individual attitudes, subjective norms, and perceived behavioral control on travel intentions. Journal of Business Management Focus, 12(2), 218-227.
- Setyaningsih, I., Ciptono, W. S., Indarti, N., & Kemal, N. I. V. (2019a). Green manufacturing’s adoption framework for small and medium enterprises in Indonesia. Proceedings of the International Conference on Industrial Engineering and Operations Management (pp. 585-595). Bangkok, Thailand.
- Setyaningsih, I., Indarti, N., & Ciptono, W. S. (2019b). Green manufacturing’s adoption by Indonesian SMEs: A conceptual model. IEEE International Conference on Industrial Engineering and Engineering Management (pp. 336-340). Bangkok, Thailand.
- Shashi, Centobelli, P., Cerchione, R., & Singh, R. (2019). The impact of leanness and innovativeness on environmental and financial performance: Insights from Indian SMEs. International Journal of Production Economics, 212, 111-124.
- Szymaniec-Mlicka, K. (2014). Resource-based view in strategic management of public organizations – a review of the literature. Management, 18(2), 19-30.
- Tseng, M. L., Wang, R., Chiu, A. S., Geng, Y., & Lin, Y. H. (2013). Improving performance of green innovation practices under uncertainty. Journal of Cleaner Production, 40, 71-82.
- Ullah, R., Ahmad, H., Rizwan, S., & Khattak, M. S. (2022). Financial resource and green business strategy: The mediating role of competitive business strategy. Journal of Sustainable Finance & Investment.
- Wang, X., & Chan, H. K. (2013). A hierarchical fuzzy TOPSIS approach to assess improvement areas when implementing green supply chain initiatives. International Journal of Production Research, 51(10), 3117-3130.
- Yong, J. Y., Yusliza, M. Y., Ramayah, T., & Seles, B. M. R. P. (2022). Testing the stakeholder pressure, relative advantage, top management commitment and green human resource management linkage. Corporate Social Responsibility and Environmental Management Journal, 29(5), 1283-1299.