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Green initiatives for business sustainability and value creation


Green Initiatives for
Business Sustainability
and Value Creation
Arun Kumar Paul
Xavier University, India
Dipak Kumar Bhattacharyya
Xavier University, India
Sandip Anand
Xavier University, India

A volume in the Advances in Business Strategy
and Competitive Advantage (ABSCA) Book Series


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Library of Congress Cataloging-in-Publication Data
Names: Paul, Arun Kumar, 1964- editor. | Bhattacharyya, Dipak Kumar, editor.
| Anand, Sandip, 1976- editor.
Title: Green initiatives for business sustainability and value creation /
Arun Kumar Paul, Dipak Kumar Bhattacharyya, and Sandip Anand, editors.
Description: Hershey, PA : Business Science Reference, [2018] | Includes
bibliographical references and index.
Identifiers: LCCN 2017008220| ISBN 9781522526629 (h/c) | ISBN 9781522526636
(eISBN)
Subjects: LCSH: Management--Environmental aspects.
Classification: LCC HD30.255 .G738 2018 | DDC 658.4/083--dc23 LC record available at https://lccn.loc.gov/2017008220
This book is published in the IGI Global book series Advances in Business Strategy and Competitive Advantage (ABSCA)
(ISSN: 2327-3429; eISSN: 2327-3437)
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Advances in Business Strategy
and Competitive Advantage
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Universidad de Oviedo, Spain

ISSN:2327-3429
EISSN:2327-3437
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Business entities are constantly seeking new ways through which to gain advantage over their competitors
and strengthen their position within the business environment. With competition at an all-time high due


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created, implemented and re-designed to meet the demands of globalized competitive markets. With a
focus on local and global challenges, business opportunities and the needs of society, the ABSCA encourages scientific discourse on doing business and managing information technologies for the creation
of sustainable competitive advantage.

Coverage
• Innovation Strategy
• Co-operative Strategies
• International Business Strategy
• Outsourcing
• Business Models
• Cost Leadership Strategy
• Resource-Based Competition
• Value Creation
• Core Competencies
• Value Chain

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Titles in this Series

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Noor Hazlina Ahmad (Universiti Sains Malaysia, Malaysia) T. Ramayah (Universiti Sains Malaysia, Malaysia)
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Table of Contents

Preface................................................................................................................................................... xii
Chapter 1
Environmental Sustainability Practices for SMEs................................................................................... 1
Gurudas Nulkar, HRD, India
Chapter 2
Meaning of Green for 3PL Companies.................................................................................................. 21
Pervin Ersoy, Yaşar University, Turkey
Chapter 3
A Temporal Case Study of Green Business Initiatives of a Leading Firm in the Indian
Hydrocarbon Industry............................................................................................................................ 45
Kamalika Chakraborty, Indian Institute of Management Calcutta, India
Nishant K. Verma, Indian Institute of Management Bangalore, India
Chapter 4
Internationalization of Indian Pharmaceutical Industry: A Study on Export Performance Using
Structural Model.................................................................................................................................... 70
Srikant Panigrahy, Xavier Institute of Management Bhubaneswar, India
Prahlad Mishra Professor, Xavier Institute of Management Bhubaneswar, India
B. P. Patra, Xavier Institute of Management Bhubaneswar, India
Chapter 5
Sustainability Evaluation of Green Urban Logistics Systems: Literature Overview and Proposed
Framework........................................................................................................................................... 103
Jesus Gonzalez-Feliu, Ecole des Mines de Saint-Etienne, France
Chapter 6
A Case of Kumbh Mela at Allahabad: Learning for Urban Space Management and the BoP
Market.................................................................................................................................................. 135
Sandip Anand, Xavier University, India






Chapter 7
HR Mediated Reverse Innovation: A Study on Two MNCs in India................................................... 150
Dipak Kumar Bhattacharyya, Xavier University, India
Chapter 8
Explicating Green Biofuel Policy Across Indian States...................................................................... 164
Satyendra Nath Mishra, Xavier University, India
Chapter 9
Sustainable Value Enhancement in Closed Loop Supply Networks.................................................... 182
Arun Kumar Paul, Xavier University, India
Chapter 10
Enterprise Integrated Business Process Management and Business Intelligence Framework for
Business Process Sustainability........................................................................................................... 228
Gaurav Kabra, Xavier University, India
Vinit Ghosh, Indian Institute of Technology Guwahati, India
A. Ramesh, Indian Institute of Technology Roorkee, India
Chapter 11
Determinants of Sustainable Consumption Behaviour: Review and Conceptual Framework............. 239
Yatish Joshi, Independent Researcher, India
Zillur Rahman, Indian Institute of Technology Roorkee, India
Compilation of References................................................................................................................ 263
About the Contributors..................................................................................................................... 301
Index.................................................................................................................................................... 303


Detailed Table of Contents

Preface................................................................................................................................................... xii
Chapter 1
Environmental Sustainability Practices for SMEs................................................................................... 1
Gurudas Nulkar, HRD, India
The rate and scale of environmental degradation, through economic activities, has triggered widespread
awakening among businesses, governments and civil society. The world over, corporations have responded
by adopting sustainability practices and reporting. However, much of these happen within the premises of
the corporations. As larger organizations outsource their manufacturing and service operations to small
and medium enterprises (SMEs), they effectively shift their environmental burden on their vendors. In
most developing countries, poor regulations and weak enforcement of environment laws leave the SMEs
on their own, to improve their environmental practices. However, their limited resources and managerial
capabilities are often inadequate to undertake sustainability practices. This chapter presents the findings
of a research conducted among engineering SMEs in India. It proposes a lifecycle approach towards
environmental practices and discusses potential business benefits and value creation from this. The chapter
gives a roadmap for green business strategies, which SMEs can implement within their organization.
Chapter 2
Meaning of Green for 3PL Companies.................................................................................................. 21
Pervin Ersoy, Yaşar University, Turkey
In today’s competitive environment managing green, becoming environmentally friendly and sustainable
has become main topic for all industries and companies. Therefore, in this chapter it will be addressed
how green logistics solutions and practices can help companies to increase their performance with
specific practices, cases and results from Turkey’s 3PL service providers’ side. This chapter will discuss
why being green is important for 3PL companies and the benefits of being green from the business and
environment side with current data and real life examples. The main purpose of this chapter is to shed
light on green performance indicators and to identify benefits of being green for 3PL companies in Turkey.






Chapter 3
A Temporal Case Study of Green Business Initiatives of a Leading Firm in the Indian
Hydrocarbon Industry............................................................................................................................ 45
Kamalika Chakraborty, Indian Institute of Management Calcutta, India
Nishant K. Verma, Indian Institute of Management Bangalore, India
The effective functioning of modern business in the current day and age is incomplete without taking
into consideration its extended impact on society and environment. In this respect companies need to
continuously revisit and analyse their green initiatives to keep them relevant and contribute positively to
the global cause. This book chapter provides a capable framework for organizations to conduct temporal
analysis of their green initiatives and enable them to reflect on their current positions and strategize their
future course of actions. Further, we analyse the green initiatives of the Indian Hydrocarbon Industry
leader: Indian Oil Corporation Limited (IOCL) and trace its green journey across defined time periods
thereby depicting the use of the developed framework in addressing the gap of temporal analysis in the
literature.
Chapter 4
Internationalization of Indian Pharmaceutical Industry: A Study on Export Performance Using
Structural Model.................................................................................................................................... 70
Srikant Panigrahy, Xavier Institute of Management Bhubaneswar, India
Prahlad Mishra Professor, Xavier Institute of Management Bhubaneswar, India
B. P. Patra, Xavier Institute of Management Bhubaneswar, India
Focusing on internationalization process of firms of developing countries, the present study attempts to
identify the important determinants/ variables which affect the Indian pharma firms’ export performance.
A causal model was built using contingency theory perspective by including important external variables,
internal variables, export strategy and export performance affecting Indian pharma firms and was tested
using Structural Equation Modeling (SEM) method. The finding of this study support the conceptual model
build using contingency framework and contributes both to export performance researchers for building
further the theory and Indian pharma industry to focus on important determinants for export success.
Chapter 5
Sustainability Evaluation of Green Urban Logistics Systems: Literature Overview and Proposed
Framework........................................................................................................................................... 103
Jesus Gonzalez-Feliu, Ecole des Mines de Saint-Etienne, France
This paper aims to propose a systemic vision of literature on sustainable urban logistics assessment and
evaluation. Although non-extensive, this overview pretends lack of unification in the subject of assessing
and evaluating the impacts of green urban logistics systems, and, through the proposal of a general
assessment and evaluation framework, the steps done and being in course towards standards on this field.
First, an overview of the research in urban logistics is provided, after what the main visions of sustainable
development and their derived issues for urban logistics assessment and evaluation are presented. Then,
a framework to assess and evaluate green urban logistics systems via scenario comparison is proposed.
This framework aims to propose a methodological framework to use and combine existing methods to
assess scenarios, and not a “black-box” model of software ready to use. This is done to make synergies




between existing methods, and to show that, although they remain at an initial stage, steps on the way
of defining standards are made. After that, the main applicability and application issues of the proposed
methodological framework are addressed, showing those principles of standard from the literature.
Finally, and to conclude, future developments on urban logistics research are proposed.
Chapter 6
A Case of Kumbh Mela at Allahabad: Learning for Urban Space Management and the BoP
Market.................................................................................................................................................. 135
Sandip Anand, Xavier University, India
Management of mega events like Kumbh Mela, rests on the involvement of communities and local
authorities who have rich learning heritage with them. Using Kumbh Mela as a case, this chapter
highlights the role of various factors which are important for urban pace management. Understanding
of the market at Kumbh Mela offers insights related to the BoP market. The chapter has following key
inquiries: a) What kind of space was the Magh/Kumbh Mela? What kind of economic activities happened?
b) What was the value system? c) What were the things being communicated? What were the things
being remembered by them? This chapter uses exploratory research methodologies. Towards the end of
the chapter, findings and its implications have been discussed.
Chapter 7
HR Mediated Reverse Innovation: A Study on Two MNCs in India................................................... 150
Dipak Kumar Bhattacharyya, Xavier University, India
This book chapter at the outset explains the concept of reverse innovation, through literature review and
review of the practices in different organizations. The chapter then examines the reverse innovation initiatives
for business sustainability and value creation of two multinationals in India; one in manufacturing and
the other one is in processing (chemical). The chapter then assesses how these two organizations could
achieve success, and to what extent such success can be attributed to their sustainable human resource
management (HRM) practices. Through critical review of HRM practices, the study documents the best
HRM practices, and concludes how multinationals in developing countries can emulate such practices
for achieving results in reverse innovation for business sustainability and value creation.
Chapter 8
Explicating Green Biofuel Policy Across Indian States...................................................................... 164
Satyendra Nath Mishra, Xavier University, India
In 2003 Government of India envisioned Biofuel Policy to generate [un]skilled employment opportunities,
address environmental issues, alternative for petroleum fuel and utilization of wasteland in rural areas.
The biofuel programme took varied shape across India with focus on social, economic and political
priorities of implementing states having varying focus like decentralized development, priority for local
use of resources, allocation of wasteland and generating local employment. It was observed that existing
policy guidelines, land allocation processes and fund allocation channels were not able to address the
challenges came with the emergence of different institutional arrangements across different states of
India. The mismatch to address the specific challenges for emerging institutions created fissure between
state and its citizens, and potential withdrawal of private players.




Chapter 9
Sustainable Value Enhancement in Closed Loop Supply Networks.................................................... 182
Arun Kumar Paul, Xavier University, India
Closed-loop supply chains (CLSC) deal with integrating product returns into the total supply chain over
the lifecycle of the product, thereby recovering a maximum amount of value. In this chapter, the CLSC is
studied through quantitative models at three levels. The study at the first level analyses a generic closed
loop strategic framework under various scenarios, capturing the implementation maturity of CLSC. In
the second level, a quantitative model for multi stage integrated forward and reverse logistics network is
analyzed. Finally in the third level of study, a microscopic view is taken in which a joint economic order
quantity (EOQ) and economic production quantity (EPQ) model is studied to optimize value by using
proper mix of newly purchased components /products with recycled components /products. The final
control parameters may be utilized by policy makers, CLSC network designers or practicing managers
for effective decision making and coordination.
Chapter 10
Enterprise Integrated Business Process Management and Business Intelligence Framework for
Business Process Sustainability........................................................................................................... 228
Gaurav Kabra, Xavier University, India
Vinit Ghosh, Indian Institute of Technology Guwahati, India
A. Ramesh, Indian Institute of Technology Roorkee, India
In the modern business scenario, organizations are vesting high efforts in managing process sustainability
as part of their operations management practices. The global environmental concerns for the welfare of
the society have facilitated this change. Research studies have reported Information and Communication
Technology (ICT) as one of the prerequisites in developing and maintaining efficient business processes.
The process sustainability related initiatives and various processes related regulatory compliances have
created the need for sophisticated IT tools like BPM (Business Process Management) and BI (Business
Intelligence) in organizations. Thus with the advancement of ICT, a strong desire to enhance the business
process performance through BPM and BI applications is felt across organizations. However, there is
scant research available on leveraging the advantages of these applications in sustainability development.
Therefore, this paper aims to present a conceptual architecture framework using an integrated BPM and
BI solution to develop an orientation among practitioners and academicians towards the inclusion of ICT
in attaining a sustainable, energy efficient business operations or processes. The framework is based on
the literature pertaining to the role of BPM and BI in process sustainability as well as from the inputs
of practitioners involved in the field of BPM and BI.
Chapter 11
Determinants of Sustainable Consumption Behaviour: Review and Conceptual Framework............. 239
Yatish Joshi, Independent Researcher, India
Zillur Rahman, Indian Institute of Technology Roorkee, India
This study reviewed 82 empirical articles on sustainable consumption published during 1997 to 2014.
The review explored different factors affecting sustainable consumption decision-making. The factors
were categorized as personal, behavioural and socio-cultural. A taxonomic synopsis of the findings is




presented in an extensive table. The paper identifies various prevalent motives, facilitators and barriers
affecting sustainable consumption decision-making and provides possible explanations for inconsistencies
observed in consumers’ sustainable consumption behaviour. A conceptual framework is proposed
that considers various motives, attitudes and barriers and explains how they are related to sustainable
consumption behaviour.
Compilation of References................................................................................................................ 263
About the Contributors..................................................................................................................... 301
Index.................................................................................................................................................... 303


xii

Preface

The notion of “green business” emerged at the end of the 20th century in the wake of the ever increasing
public concern about the sustainability of economic development. It was accentuated by the growing
awareness of environmental issues such as the rapid depletion of natural resources, most of which were
not easily renewable, and the deterioration of environmental quality. While the origins of the modern
“green movements” can be traced down to the middle of the 1960s, it took almost 20 years for business
to adapt to the “greening” trends and adopt them into its ideology and practice, coining the term “green
business” for that purpose. However, even today, the constituent of the green business concept is rather
ambiguous as demonstrated by the variety of its definitions that could be found in different sources.
Furthermore, green business practices are still far from being universally embraced and applied by
business entities around the world, with perceptible differences of business penetration by the “green”
ideas in various countries. This is due to several reasons, one of them being the fact that the “greening
of business” is still largely perceived as an extra burden (in terms of cost increase or revenue loss or
difficulty in implementation), and the other reason being related to the national specifics in terms of
cultural, political, and economic differences and sensitivities
Several developments have contributed towards increased emphasis on the issue of being green or
sustainability. Today companies are increasingly incorporating green practices and are finding themselves
to be strategically disadvantaged if they are unable to align sustainability objectives with the long term
business objectives. In many countries sustainability reporting has become mandatory. The consequence
of advances in the sectors of energy, environment management etc. have brought the importance of
companies realize their objectives of managing people, planet, and profits. In the business model of
the past, sustainability was limited to corporate social responsibility. However, now it is very critical to
have sustainable business orientation. The concomitant changes are found in the incorporation of green
business practices related to production, marketing supply chain, HR etc. In fact bringing sustainability
to the core of all functions has become basic in business. This has changed the way business schools
and other scientific institutions deliver the education.
Though the concept of sustainable development has received growing recognition, but it is a new
idea for many business executives. For most, the concept remains abstract and theoretical. Protecting
an organization’s capital base is a well-accepted business principle. Yet organizations do not generally
recognize the possibility of extending this notion to the world’s natural and human resources. If sustainable development is to achieve its potential, it must be integrated into the planning and measurement
systems of business enterprises. And for that to happen, the concept must be articulated in terms that
are familiar to business leaders.




Preface

One of many definitions that are given for being green or sustainable is “For the business enterprise,
sustainable development means adopting business strategies and activities that meet the needs of the
enterprise and its stakeholders today while protecting, sustaining and enhancing the human and natural
resources that will be needed in the future.”
This definition captures the spirit of the concept as originally proposed by the World Commission
on Environment and Development, and recognizes that economic development must meet the needs of a
business enterprise and its stakeholders. The latter include shareholders, lenders, customers, employees,
suppliers and communities who are affected by the organization’s activities. It also highlights business’s
dependence on human and natural resources, in addition to physical and financial capital. It emphasizes
that economic activity must not irreparably degrade or destroy these natural and human resources.
It has become a cliché that environmental problems are substantial, and that economic growth contributes to them. A common response is stricter environmental regulation, which often inhibits growth.
The result can be a trade-off between a healthy environment on the one hand and healthy growth on the
other. As a consequence, opportunities for business may be constrained.
However, there are some forms of development that are both environmentally and socially sustainable.
They lead not to a trade-off but to an improved environment, together with development that does not
draw down our environmental capital. This is what sustainable development is all about - a revolutionary
change in the way we approach these issues.
Businesses and societies can find approaches that will move towards all three goals - environmental
protection, social wellbeing and economic development - at the same time. Sustainable development
is good business in itself. It creates opportunities for suppliers of ‘green consumers’, developers of environmentally safer materials and processes, firms that invest in eco-efficiency, and those that engage
themselves in social well-being. These enterprises will generally have a competitive advantage. They
will earn their local community’s goodwill and see their efforts reflected in the bottom line (IISD, 1992).
Green centrality raises several new questions which were hitherto unasked. The most important among
such questions is the question of meeting dual objectives i.e. financial and sustainability objectives.
Quest for answer to these question leads to fundamental questions such as what is the new meaning of
firms in the new context. Will there be any change in the roles played by these firms in the current millennium? Sustainability objectives are related to survival of humanity and other species on this earth.
Deep ecological concern informs us that survival of human beings and other species depends on the
stability of the climate of the earth. Further, stability of the climate depends on economic functions. It
depends on how do we produce, how do we consume, how do we operate and govern the flow of man,
material and machine?
The ecological sensitivity needs to be inculcated in the functioning and governance of firms on one
hand, and on the other hand in the consumption pattern of the society. A movement towards sustainable
consumption is required. A precursor to such movement is the way we think and organize ourselves. This
calls for change in HR orientation. Any change in HR orientation will require change in strategy and be
also dependent on strategic choices. Therefore, newer set of strategic choices related to green practices,
need to be made. In the given context, this book deals with such questions which are very critical from
the perspective of research on Strategic Green Business Practices.
Green business with sustainable practices has strategic intent to minimize any adverse impact on
the global or local environment, community, society, or economy. Such businesses strive to attain the
triple bottom line objectives – making economic profit, keeping in mind the concerns for environment
and society.
xiii


Preface

The boundaries and relationships enclosed by Supply Chain Management including Reverse Logistics and Closed Loop Supply Chain, to facilitate sustainable business can be viewed as an integrating
function with primary responsibility to link major business functions and business processes within,
and across inter-related companies into a cohesive and high-performing business model. This includes
logistics management activities (forward or backward movement of goods and/or services), as well as
manufacturing operations to drive coordination of processes and activities with and across marketing,
sales, product design, finance, and information technology.
Primary objective of this book is to explore and collate possible contexts and constructs of closed
loop supply chain management which contributes to developing and deploying strategic approaches for
green business models. As a corollary, the other objectives are reviewing organizational practices to
evolve relevant theoretical frameworks of closed loop supply chains which can reinforce organizational
capabilities for achieving superior green performance. The book also elaborates upon challenges faced
by the organizations in the process of sustaining green business models, suggestive approaches to overcome such challenges, building long-term organizational capabilities through co-creation, innovation
and adaptation of strategic green business practices. Additionally the book explores the importance of
cross-functional collaborations for effective closed loop supply management.

ORGANIZATION OF THE BOOK
The book is organized into eleven chapters. A brief description of each of the chapters follows:
Chapter 1, titled ‘Green Business Strategies for SMEs’, identifies the existing challenges in the management of SMEs in the new millennium. The author’s research with SMEs shows that green business
practices offer distinctive business benefits for SMEs. Large corporations increasingly demand environmental management systems from their suppliers since greening their supply chains contributes directly
in their own sustainability efforts. Similarly, environmental management certifications are integral part
of vendor qualification criteria for many companies. Moreover, in many developed economies, bankers and financial lending institutions require environmental risk assessment from their loan applicants.
Similarly, many insurers charge higher premium from SMEs who are exposed to environmental risks.
In the European Union, extended producer responsibility (EPR) requires corporations to be responsible
for their products, no matter where they are produced. This has prompted large companies to disqualify
SME suppliers who do not meet the environmental standards. On the other hand, SMEs in consumer businesses have witnessed growth in green consumerism not just in developed economies but also countries
like India. To serve this market, SMEs must go beyond green manufacturing. This requires technical
and managerial skills, but will extend the first mover advantages to those early in the game. These are
just some of the obvious business benefits accrued through green practices.
The objective of this chapter is to help SMEs understand the benefits of green business practices
and offer them a simple framework for greening their businesses. The chapter is draws upon the results
of a three-year study undertaken by the author with engineering SMEs in India. The research examined
green business practices of over 70 SMEs from the product lifecycle perspective. Additionally, in depth
interviews with large corporations, who have SMEs in their supply chains, helped gain deep insights
into environmental practices. The study has been published in international journals and has received a
positive response from policy makers, industry associations and SMEs themselves. This chapter builds
on the findings and discussions in the research and intends to help SMEs realize how green business
xiv


Preface

strategies can result in competitive advantage for them. Consequently, this would help transform what
are today cost burdens into strategic investments for tomorrow. The central argument of the chapter is
that businesses must recognize the value arising out of the firm’s environmental impact and strategically
position itself to gain competitive advantages. The chapter sets the scene for discussions presented by
various authors. In particular the chapter identifies the green orientation of SMEs and the related problems.
Chapter 2 titled ‘Meaning of Green for 3PL Companies’ discusses the meaning of green. Generated
meanings are used for further conceptualization. This chapter addresses how green logistics solutions
and practices can help companies to increase their performance with specific practices, cases and results
from Turkey’s 3PL service providers’ side. In this chapter it is also discussed as to why being green is
important for 3PL companies, benefits of being green from the business and environment side with current data and real life examples. The main purpose of this chapter is to shed light on green performance
indicators and identifying benefits of being greening for 3PL companies in Turkey.
Chapter 3 titled ‘A Temporal Case Study of Green Business Practices of a Leading Firm in the Indian
Hydrocarbon Industry: Green Journey of Indian Oil Corporation Limited’ presents insights related to
green business practices using case of a company. On the basis of generated insights, authors provide
recommendation for large oil companies. The motivation behind this book chapter was to develop a
conceptual framework of green initiative by a firm. The second objective of the book chapter was to
analyze the leading firm Indian Oil Corporation limited (IOCL), in the Indian hydrocarbon industry (an
under-researched field) in the purview of the developed framework. In doing so the authors address the
absence of temporal analysis of green initiatives in the extant literature. The authors specifically analyze
the green initiatives of IOCL across three time periods- pre-2000, 2000-2007 and 2007-2015. Based on
the analysis of the initiatives taken during this period alongwith the changes in the regulatory environment in the Indian Hydrocarbon Industry, the authors find that Indian oil was following a fit approach in
the early pre-2000 era by complying to the necessary regulations. However, due to changes in practices
in the business practices in the hydrocarbon industry post 2000 era, the organization redefined itself to
adopt efficient practices across its core value chain which were internally driven and pro-environment
and hence showed signs of stretch. This move was consolidated further in the 2007-2015 phase when
the intensity of such initiatives increased further. Being responsible and ethical market leaders, coupled
with increasing presence in the global market and being an integral player in the global hydrocarbon
industry, they stretched themselves and adopted sustainability initiatives in non-core areas as well thereby
making pro-environment operations an integral part of their corporate identity. The case study on IOCL
therefore serves as example to other firms to reflect their current positions and strategize their future
course of action with the help of the suggested framework. By addressing the stated objectives the authors
contribute to a greater understanding of practitioners in their greening actions.
Chapter 4, ‘Internationalization of Indian Pharmaceutical Industry: A Study on Export Performance
Using Structural Modeling’, covers issues important for the sustainability of pharmaceutical or pharma
industry. Authors deal with the issues which are primarily important from the perspective of internationalization. Focusing on internationalization process of firms of developing countries, the present
study attempts to identify the important determinants/ variables which affect the Indian pharmaceutical
firms’ export performance. A causal model was built using contingency theory perspective by including important external variables, internal variables, export strategy and export performance affecting
Indian pharma firms and was tested using Structural Equation Modeling (SEM) method. The finding
of this study support the conceptual model build using contingency framework and contributes both to

xv


Preface

export performance researchers for building further the theory and Indian pharma industry to focus on
important determinants for export success.
Chapter 5, titled ‘A Unified Framework for Sustainable Urban Logistics Evaluation’ reviews various
approaches involved in evaluation of sustainable urban logistics. The authors present a holistic framework
which may be used for such evaluation and may provide inputs towards the formulation of strategic green
business practices. This chapter discusses a systemic vision of literature on sustainable urban goods
transport scenario assessment. It aims also to propose a unified set of guidelines for scenario assessment
and analysis in the field of sustainable urban goods transport planning, and in an extended vision of urban
goods transport flows. First, a recall on stakeholders and their main objectives and stakes in made. Then,
their visions of sustainability as well as a synthesis of key performance indicators are proposed to address the sustainability of urban goods transport. To estimate those indicators it is necessary to simulate
the urban goods transport flows. We propose then an overview on urban goods transport modelling, for
all three categories of flows: inter-establishment, end-consumers and urban management movements.
Finally, a unified framework for scenario assessment is presented, focusing on the different types of
scenarios and analyses that can be carried out. This chapter shows that although there is a plethora of
methods, they follow similar methodological paths. For that reason, instead of inciting competition, it
is more suitable to find synergies between approaches to improve scenario assessment and analysis and
give decision makers more suitable support and assistance.
Chapter 6, titled ‘A Case of Kumbh Mela at Allahabad: Learning for Urban Space Management and
the Bottom of the Pyramid (BoP) Market’ address the issues important for urban space management and
sustainability. Increasing importance of urban space management, environmental issues, and search for
new markets have given new impetus to the understanding of various Indian events where large gathering
of citizens happen at one single place. These consumers also act as consumer-citizens. It seems that on
one hand Indian value system has been able to maintain many traditional events for long. On the other
hand, global forces further trigger this as these spaces provide them with opportunities for management
of sustainable cities, event management, retailing, and consumer research for the bottom of the pyramid
market. This chapter highlights that such events are part of meta organizational spaces (a space beyond
the boundaries of organization) wherein both conventional and unconventional spaces come together.
The chapter highlights that main drivers for these events are various communities and local authorities
who have rich learning heritage with them. Core which bind communities, local authorities, and local
executives of corporations together revolves around the faith and solace which Kumbh/maagh mela
offers. Nothing can be more luxurious than myth for ultimate experience, hope for salvation and deep
rootedness in one’s history. This chapter also highlights the role of various factors which have contributed
to the growth of research in the area of urban pace management. Many come to the megacity of Magh
Mela from different parts of India. In this manner the study of Kumbh Mela also highlights the process
and outcomes of urbanization. In this case urbanization is temporary as this is Pop-up city. Urbanization
creates newer market, particularly when it dominated by low income class. Understanding of this market
offers insights towards understanding of the BoP market.
Chapter 7 titled ‘HR Mediated Reverse Innovation: A Study on Two MNCs in India’ analyses the
construct of reverse innovation, with particular reference to India. This book chapter at the outset explains
the concept of reverse innovation, through literature review and review of the practices in different organizations. The chapter then examines the reverse innovation initiatives for business sustainability and
value creation of two multinationals in India; one in manufacturing and the other one is in processing
(chemical). The chapter then assesses how these two organizations could achieve success, and to what
xvi


Preface

extent such success can be attributed to their sustainable human resource management (HRM) practices.
Through critical review of HRM practices, the study documents the best HRM practices, and concludes
how multinationals in developing countries can emulate such practices for achieving results in reverse
innovation for business sustainability and value creation.
Chapter 8 titled ‘Explicating Green—Biofuel—Policy Across India States’ describes the biofuel policy
implications in India on sustainability and employment generation opportunities. In an effort to generate
[un]skilled employment opportunities, addressing environmental issues and utilization of wasteland in
rural areas, Government of India (GoI) envisioned to provide facilitative policy environment for biofuel
based energy options. The biodiesel programme took varied shape across different states with focus on
social, economic and political priorities of State’s with varying focus like decentralized development,
priority for local use of resources, allocation of wasteland and generating local employment. Since 2003,
states of India adopted different approach for the programme implementation like controlled intervention
by the state only, intervention by the market mechanism, and mixed way of intervention (state with support from market players, development organization, local institutions etc.). The programme activities
included biofuel crop plantation; maintenance; production and distribution of [by]products; and priority
for use. In this dynamic environment it is imperative to explore in detail how the biodiesel programme
was formulated for implementation at state level. This would expand the understanding of facilitative
and inhibitive variables of programme design for policy implementable. The next section of this chapter
deals with four such policy variables, viz., 1) policy environment, 2) land allocation issue, 3) fund allocation, and 4) institutional arrangements, associated with the implementation of the programme across
ten states. The last section on discussion attempted to understand the dynamics of the four variable and
its potential implication for programme outcomes.
Chapter 9 titled ‘Sustainable Value Enhancement in Closed Loop Supply Networks’ the construct of
sustainable value enhancement and links the same with the closed supply networks in the supply chain.
The resources, which are useful to us in this world, are limited and getting depleted at an increasingly
faster rate. The changing materialistic needs and shrinking capacity to dispose wastes are posing serious
challenges to humanity. Indiscriminate exploitation of resources without much thought on conservation,
reuse and regeneration is posing a serious threat to civilization. In such a scenario, proper recovery and
disposal of used parts, products and material is of paramount importance in supporting a growing population with an increasing level of consumption. This chapter, at the first level analyses a generic closed
loop strategic framework under various scenarios, capturing the implementation maturity of CLSC in
any given business organization. In the second level of study, an integrated forward and reverse logistics network is investigated, and a capacitated multi-stage logistics network design is projected. In the
third level of model study in this chapter, a microscopic view is taken in which a joint economic order
quantity (EOQ) and economic production quantity (EPQ) situation is studied to optimize value by using
proper mix of newly purchased components /products with recycled components /products. The three
hierarchical models are integrated through selected model parameters and chosen decision variables. The
solution methodology is discussed with pertinent control parameters that emanate out of the analysis.
The control parameters may be utilized by CLSC network designers or practicing managers for effective
decision making and coordination by capturing the major relevant aspects of CLSC behavior.
Chapter 10 titled ‘Enterprise Integrated Business Process Management and Business Intelligence
Framework for Business Process Sustainability’ discusses concepts of optimized and sustainable performance in the context of integrated business processes. Research studies have reported Information and
Communication Technology (ICT) as one of the prerequisites in developing and maintaining efficient
xvii


Preface

business processes. The process sustainability related initiatives and various processes related regulatory
compliances have created the need for sophisticated IT tools like BPM (Business Process Management)
and BI (Business Intelligence) in organizations. Thus with the advancement of ICT, a strong desire to
enhance the business process performance through BPM and BI applications is felt across organizations.
However, there is scant research available on leveraging the advantages of these applications in sustainability development. Therefore, this chapter aims to present a conceptual architecture framework using
an integrated BPM and BI solution to develop an orientation among practitioners and academicians
towards the inclusion of ICT in attaining a sustainable, energy efficient business operations or processes.
The framework is based on the literature pertaining to the role of BPM and BI in process sustainability
as well as from the inputs of practitioners involved in the field of BPM and BI.
Chapter 11 titled ‘Determinants of Sustainable Consumption Behaviour: Review and Conceptual
Framework’ deals with the issue of sustainable consumption. The chapter addresses factors which lead
consumers towards sustainable consumption. In this chapter, a study reviewed 82 empirical articles on
sustainable consumption published during 1997 to 2014. The review explored different factors affecting
sustainable consumption decision-making. The factors were categorized as personal, behavioural and sociocultural. A taxonomic synopsis of the findings is presented in an extensive table. The chapter identifies
various prevalent motives, facilitators and barriers affecting sustainable consumption decision-making
and provides possible explanations for inconsistencies observed in consumers’ sustainable consumption
behaviour. A conceptual framework is proposed that considers various motives, attitudes and barriers
and explains how they are related to sustainable consumption behaviour.

REFERENCES
International Institute for Sustainable Development (IISD). (1992). Business Strategy for Sustainable
Development: Leadership and Accountability for the 90s. DIANE Publishing Company.

ADDITIONAL READING
Čekanavičius, L., Bazytė, R., & Dičmonaitė, A. (2014). Green business: Challenges and practices.
EKONOMIKA, 93(1), 74–88.
Cosimato, S., & Troisi, O. (2015). Green supply chain management practices and tools for logistics competitiveness and sustainability: The DHL case study. The TQM Journal, 27(2), 256–276. doi:10.1108/
TQM-01-2015-0007
Garzella, S., & Fiorentino, R. (2014). An integrated framework to support the process of green management adoption. Business Process Management Journal, 20(1), 68–89. doi:10.1108/BPMJ-01-2013-0002
Global Responsibility Report. (2016). Walmart. Available at http://corporate.walmart.com/2016grr
Green, K. W., Zelbst, P. F., Meacham, J., & Bhadauria, V. S. (2012). Green supply chain management
practices: Impact on performance, Supply Chain Management –. International Journal (Toronto, Ont.),
17(3), 290–305.
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Kim, S., Lee, K., & Fairhurst, A. (2017). The review of green research in hospitality, 20002014: Current
trends and future research directions. International Journal of Contemporary Hospitality Management,
29(1), 226–247. doi:10.1108/IJCHM-11-2014-0562
Kumar, P. (2014). Greening retail: An Indian experience. International Journal of Retail & Distribution
Management, 42(7), 613–625. doi:10.1108/IJRDM-02-2013-0042
Laosirihongthong, T., Adebanjo, D., & Tan, K. C. (2013, August 23). (.).Green supply chain management
practices and performance. Industrial Management & Data Systems, 113(8), 1088–1109. doi:10.1108/
IMDS-04-2013-0164
Martinez, F. (2014). Corporate strategy and the environment: Towards a four dimensional compatibility
model for fostering green management decisions. Corporate Governance, 14(5), 607–636. doi:10.1108/
CG-02-2014-0030
Olson, E. G. (2008). Creating an enterprise level green strategy. The Journal of Business Strategy, 29(2),
22–30. doi:10.1108/02756660810858125
Prasad, S., Khanduja, D., & Sharma, S. K. (2016, April 04). (.), An empirical study on applicability of
lean and green practices in the foundry industry. Journal of Manufacturing Technology Management,
27(3), 408–426. doi:10.1108/JMTM-08-2015-0058
Singh, A., & Trivedi, A. (2016). Sustainable green supply chain management: Trends and current practices. Competitiveness Review, 26(3), 265–288. doi:10.1108/CR-05-2015-0034
Smith, E. E., & Rootman, C. (2013). Assessing perceptions regarding the sustainability of contemporary
organizations. Business Management Dynamics, 3(1), 1–16.
Sustainability Report. (2015). Johnson & Johnson. Available at www.jnj.com/sites/default/files/pdf/
cs/2015-JNJ-Citizenship-Sustainability-Report.pdf
Walker, M. & Mercado, H. (2013). The Resource-worthiness of environmental responsibility: a resourcebased perspective. Corporate Social Responsibility and Environmental Management, 22, 208–221. DOI:
10.1002/csr.1339
Younis, H., Sundaerkani, B., & Vel, P. (2016). The impact of implementing green supply chain management practices on corporate performance. Competitiveness Review, 26(3), 216–245. doi:10.1108/
CR-04-2015-0024
Zaharia, C., & Zaharia, I. (2012). Green values concerning the social responsibility of companies, Economics. Management & Financial Markets, 7(2), 161–166.

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1

Chapter 1

Environmental Sustainability
Practices for SMEs
Gurudas Nulkar
HRD, India

ABSTRACT
The rate and scale of environmental degradation, through economic activities, has triggered widespread awakening among businesses, governments and civil society. The world over, corporations have
responded by adopting sustainability practices and reporting. However, much of these happen within
the premises of the corporations. As larger organizations outsource their manufacturing and service
operations to small and medium enterprises (SMEs), they effectively shift their environmental burden
on their vendors. In most developing countries, poor regulations and weak enforcement of environment
laws leave the SMEs on their own, to improve their environmental practices. However, their limited
resources and managerial capabilities are often inadequate to undertake sustainability practices. This
chapter presents the findings of a research conducted among engineering SMEs in India. It proposes a
lifecycle approach towards environmental practices and discusses potential business benefits and value
creation from this. The chapter gives a roadmap for green business strategies, which SMEs can implement within their organization.

1. INTRODUCTION: WHY SMEs?
In our lifetime, we have witnessed some of the worst natural calamities. Warnings of polar ice melt,
tsunamis, hurricanes and snowstorms are increasingly frequent. Death and destruction from such causes
are steadily on the rise. Are these the vagaries of the planet or is this a response to human activities?
This question has been extensively debated in the last few years, but has ended up creating more questions than answers. Should the environment be prioritized over industrial growth? Does the planet come
ahead of people? Is technology leading to faster depletion of natural resources? Many such uncomfortable
questions are now challenging the very structure of free markets.
However, the argument that unbridled consumption on a planet with finite resources, will inevitably
lead to collapse, is gaining momentum. History offers ample proof of civilizations collapsing because
DOI: 10.4018/978-1-5225-2662-9.ch001

Copyright © 2018, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.



Environmental Sustainability Practices for SMEs

they had overlooked resource overuse (Diamond, 2000). Over the last decade, many corporations have
come to terms with this prognosis and have taken up the path of sustainability. Many global corporations
now have sophisticated sustainability programs indicating a level of acceptance to the environmental
imperative. However, even as the awareness grows within society and governments, small enterprises
seem to be spared. Their small size is effective in warding off attention and on the other hand their sheer
number poses an enforcement challenge for authorities. Although their scale of operations renders a
proportionately small environmental impact, it is estimated that their collective impact may be as much,
if not more, as that of large industry. Moreover, many SMEs are part of global supply chains of large
corporations and undertake manufacturing activities for them. As key suppliers to the large corporations,
a significant portion of their environmental burden is thus transferred to the SMEs. They contribute
significantly to a nation’s economy and its GDP and from a precautionary principle then, it is imperative
that SMEs be encouraged to improve their environmental performance within their own operations. The
potential benefit from this is far too large to be neglected.
SMEs generally adopt reactive strategies which focus on compliance rather than sustainability (Hobbs,
2000). Recent studies show that the firm size is one of the major determinants of a firm’s green strategy
– environmental actions undertaken are inversely proportional to the company size (Bianchi & Noci,
1996). In the 2011 survey on Sustainability and Innovation, the MIT Sloan Business School too had similar findings (MIT Sloan Sustainability Dashboard). SMEs generally follow business instincts to reduce
resource use and waste and are keen to save costs through efficient resource usage. But those practices
which need investments or inflict costs are not popular among them. Employing clean technologies and
life-cycle analysis often does not find favor among small firms. When faced with the prospect of no
business gains, SMEs tend to disregard environmental improvement as a non-priority expense (Esty &
Winston, 2009). In most developing countries, the potential contribution of SMEs to a cleaner environment may not have been realized yet. Taking the case of India, current policy and legal frameworks do
little to encourage or support SMEs in this direction. As the adoption of sustainable practices by SMEs is
critical for national environmental goals, they must be encouraged to go beyond the usual eco-efficiency
practices. While the magnitude of impact on the environment of an individual SME will depend on the
technologies employed, packaging used, energy consumption patterns and distribution and supply chain
usage, there is no doubt on the necessity of them improving their environmental performance.
The author’s research with SMEs shows that green business practices offer distinctive business
benefits for SMEs. Large corporations increasingly demand environmental management systems from
their suppliers since greening their supply chains contributes directly in their own sustainability efforts.
Similarly, environmental management certifications are integral part of vendor qualification criteria for
many companies. Moreover, in many developed economies, bankers and financial lending institutions
require environmental risk assessment from their loan applicants. Similarly, many insurers charge higher
premium from SMEs who are exposed to environmental risks. In the European Union, extended producer
responsibility (EPR) requires corporations to be responsible for their products, no matter where they are
produced. This has prompted large companies to disqualify SME suppliers who do not meet the environmental standards. On the other hand, SMEs in consumer businesses have witnessed growth in green
consumerism not just in developed economies but also countries like India. To serve this market, SMEs
must go beyond green manufacturing. This requires technical and managerial skills, but will extend the
first mover advantages to those early in the game. These are just some of the obvious business benefits
accrued through green practices.

2



Environmental Sustainability Practices for SMEs

The objective of this chapter is to help SMEs understand the benefits of green business practices
and offer them a simple framework for greening their businesses. The chapter is draws upon the results
of a three-year study undertaken by the author with engineering SMEs in India. The research examined
green business practices of over 70 SMEs from the product lifecycle perspective. Additionally, in depth
interviews with large corporations, who have SMEs in their supply chains, helped gain deep insights
into environmental practices. The study has been published in international journals and has received a
positive response from policy makers, industry associations and SMEs themselves. This chapter builds
on the findings and discussions in the research and intends to help SMEs realize how green business
strategies can result in competitive advantage for them. Consequently, this would help transform what
are today cost burdens into strategic investments for tomorrow. The central argument of the chapter is
that businesses must recognize the value arising out of the firm’s environmental impact and strategically
position itself to gain competitive advantages.

2. COMPETITIVE OPPORTUNITIES POSSIBLE WITH
GREEN BUSINESS PRACTICES FOR SMES
The ability of SMEs to create, access and commercialize new knowledge in their own markets is fundamental to their sustained competitiveness. The formation of strategy and its implementation are at the
core a competitive business. Competitiveness is a comparative concept of the ability and performance
of a firm to sell and supply goods and or services in each market. In almost all literature on strategy, the
leading hypothesis is that sustained superior performance of firms arises from sustained competitive
advantages (Powell, 2001). Competitive advantage implies that firms can satisfy customer needs more
effectively than their competitors. This can be achieved through lower costs or differentiated advantages
which customers value and are willing to pay for. Both these situations were evident in the author’s
research on SMEs adopting green business practices. Thus, green strategies can potentially lead to the
traditional generic outcomes of business strategy - cost leadership and differentiation. Responses in the
research showed the presence of both forms of benefits in firms which practiced environmental management. It is important to note that these benefits were a result of green practices and could not have
been achieved by other means. Porter and Linde (1995) have argued that the most competitive firms
are not the ones with cheapest inputs or largest scales, but ones which have the capacity to innovate
more. They discuss several examples where environmental regulation has caused firms to innovate for
solutions thereby creating a cost advantage. Firms which proactively pursue green strategies stand to
benefit in many ways than just profits. A green competitive advantage is the potential for environmental
performance to improve long term profitability.

2.1 Benefits of Going Green
Based on research conducted in other countries and the author’s own research with SMEs in India, it
was found that SMEs enjoy several benefits from environmental management. These benefits vary with
the extent of practices, nevertheless, they offer compelling reasons for small firms to undertake green
business practices. The list of benefits arising from green practices is shown in Table 1.
Unique combinations of benefits were experienced by many SMEs. These covered the generic strategic
positions which lead to competitive advantages for firms. Such advantages are gained because of an in3



Environmental Sustainability Practices for SMEs

Table 1. Business benefits of green practices
Business Benefits of Green Practices

Generic Advantage

Savings from reduced consumption of materials and resources

Lower Cost advantage

Savings from use of increased recycled content

Lower Cost advantage

Improved productivity of resources

Lower Cost advantage

Financial incentives from lending institutions

Lower Cost advantage

Lower premium from insurers

Lower Cost advantage

Lowering environmental risks in business

Lower Cost advantage

Improvement in quality of products

Differentiation advantage

Advantage with some current customers

Differentiation advantage

Advantage in acquiring new customers

Differentiation advantage

Export opportunities due to environmental management

Differentiation advantage

Improved image with customers

Differentiation advantage

Attracting better employees

Differentiation advantage

Better morale of employees

Differentiation advantage

novative and resourceful organization and are difficult to observe by competitors. The collective learning
of the organization is hard to observe and imitate, effectively turning it into a competitive advantage.
Our research shows that the benefits of lower costs are commonly observed in SMEs. These are a result
of reduced usage of resources, lower waste, increased recycled content and lower environmental risks.
Most of these benefits are realized in the short-run and are easiest to undertake, without much disruption
in daily operations. As this is important for SME operations, the research showed cost saving benefits
to be the most common within SMEs.
However, as each firm practices resource productivity, there is a limited scope for a competitive advantage from low costs. On the other hand, differentiated products or a differentiated firm image can be
harder to imitate and is sought after through competitive strategy. However, the benefits of differentiation
from green practices, were less evident in this research, than those of cost saving. At the current levels
of green performance, cost benefits seem to be more than differentiation benefits.

2.2 Perils of Not Going Green
As a part of supply chains of global corporations, SMEs are obligated to meet the qualification criteria
set by their customers. Increasingly, large corporations are demanding environmental management
practices and in some cases certifications from their vendors. On the other hand, some companies value
green performance but do not make it mandatory. In both the cases SMEs who have overlooked going
green stand to lose. Many large corporations that the author interviewed during the research indicated a
preference for green performance. Some companies set environmental standards which suppliers must
meet, some demand environmental reporting while many are planning green qualification for their vendors in the near future. For example, companies like Walmart are keen to source from India but require
a high degree of environmental management from their vendors. Those SMEs that already are on the
job stand to gain a competitive advantage straight away.

4



Environmental Sustainability Practices for SMEs

The benefit of lower environmental risk is perhaps least understood among SMEs. Firms may find it
challenging to invest in mitigating risks which cannot be quantified in many cases. While in developed
economies firms would invest in compliance and in some cases beyond compliance, only to reduce
environmental threats; this was not evident in India. SMEs may fall in either one of these situations:
(i) environmental risks are not perceived at all due to poor environmental awareness (ii) environmental
risks are not considered significant. ‘Won’t happen with me’ is not a mitigation of environmental risks,
as statistics from other countries shows.
Several studies conclude that SMEs lag in environmental practices when compared to large firms
(Studer, Welford, & Hills, 2008). Most are agreed that SMEs are motivated more by compliance and
cost saving than gaining a competitive advantage (Rowe & Hollingsworth, 1996) (Worthington & Patton, 2005). However, SMEs must realize the business case for going green and move in to gain early
mover advantages.

3. BEYOND MANUFACTURING: GREENING THE PRODUCT LIFE CYCLE
Lean manufacturing, Six Sigma and a host of other such techniques help firms to improve resource utilization and reduce waste. These practices that help save costs are prevalent in SMEs already. However, these
low hanging fruits are observable and imitable by competitors, and firms operating at high efficiencies
hardly enjoy its benefits, since most competitors would do the same. Moreover, for the environment,
these are generally located towards the end of the pipe. Most of these practices fall within the scope of
manufacturing, are tangible, measurable, and offer something “to act on.”
On the other hand, greening the other stages of the product life cycle is not always obvious and requires
a certain degree of environmental awareness and knowledge. Moreover, as green practices in these stages
may not lead to cost reductions, they are likely to be overlooked by SMEs. SMEs can gain significant
benefits by greening not just the manufacturing stage, but the other parts of the life cycle. Designing for
the environment and manufacturing with cleaner technologies has more beneficial impacts than endof-pipe greening. Sourcing from suppliers who practice environmental management, distributing with
green supply chains, designing the product for low resource use in its lifetime and finally designing the
product for safe discard and making it suitable for reuse or recycle, are all ways in which the SME can
stand to gain. The author’s research examined the green practices of SMEs in all the generic stages of a
product life cycle- planning, design, sourcing, manufacturing, and sales.
The research employed a conceptual framework developed based on the literature review and in-depth
interviews (Figure 1). The framework proposes that the level of green performance of a firm depends of
the green practices across the generic product life cycle and that the business benefits accrued are a result
of the level of green performance that the firm practices. The research supported this proposition and
showed firms with green practices in stages other than manufacturing enjoyed several benefits shown in
table 1. On the other hand, firms which practiced green behavior mainly in the manufacturing benefited
from cost savings, which is a necessary, but not a sufficient condition to enjoy a competitive advantage.
Figure 1 shows the generic stages in a product life cycle. This conceptual framework makes a proposition that the benefits a firm can expect from greening are related to the level of green performance it
undertakes. This level is decided by the scope of green practices that the firm employs in the generic
product life cycle. The author’s research supported this proposition. The benefits are indeed correlated
to the activities within the product life cycle. Firms which employ green practices in all the stages would
5


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