Journal of Risk & Control

Institutional Pressures, Green Supply Chain Management Practices, and Sustainable Performance in Indonesian Manufacturing Companies

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• Abstract

   

  The empirical research studies institutional pressures that induce differentiated green supply chain management (GSCM) practices and their effect on performance outcomes in Indonesian manufacturing companies. Building on institutional theory and resource dependence theory, it explores coercive, normative, and mimetic institutional pressures and the different impacts from these pressures on internal (internal environmental management and eco-design) vs. external (green purchasing, customer cooperation, and investment recovery) GSCM practices. The Partial Least Squares Structural Equation Modeling method was employed to analyze data from 287 medium and large manufacturing companies across five major Indonesian industrial clusters. The findings indicate that coercive pressures drive both internal and external practices, that normative pressures have a significant impact only on internal practices, and that mimetic pressures predominantly drive external practices. The finding suggests that internal practices are imperative stepping stones to external collaboration and that environmental performance has significant consequences for economic performance. Through our results, we contribute to filling an important research gap in Indonesia’s manufacturing economy and draw on empirical knowledge to provide strategic implications for managers who are pursuing GSCM transformation.

   

  JEL classification numbers: Q56, M11, M14.

  Keywords: Green supply chain management, Institutional pressures, Economic performance, Environmental performance, Manufacturing companies.