Green Supply Chain Impact on Kenyan Sugar Firms
Green Supply Chain Impact on Kenyan Sugar Firms
Original Research
Abstract
Organizations are facing increasing pressure to consider the environmental
impact of their industrial operations, particularly in high-polluting industries.
Supply chain management is now being utilized more frequently to address the
environmental pollution challenges that arise due to industrial development.
Despite the implementation of environmental management policies, sugar
companies in Western Kenya are still encountering disputes with local
communities due to pollution caused by their production processes. Experts
suggest that the incorporation of Green Supply Chain Management (GSCM)
strategies may be effective in reducing the environmental impact of
manufacturing processes. However, the effectiveness of these strategies had not
been examined through empirical research. As a result, this study aimed to
investigate the impact of GSCM practices on the environmental performance of
Western Kenya's sugar manufacturing firms. A survey was conducted using an
explanatory design, with 127 respondents drawn from various departments
within the organizations. The reliability of the survey instruments was evaluated
using Cronbach's alpha coefficient. The findings revealed that R2 for GSCM
practices was 0.684 (p=0.00) and statistically significant, indicating that GSCM
practices account for 68.4% of the variance in environmental performance. The
study concluded that manufacturing companies should adopt GSCM as a critical
strategy for sustainable initiatives, which can contribute to a company's
competitive advantage and overall profitability.
1
Corresponding author’s Email: andolo3000@gmail.com
Introduction
The rapid advancement of the industry has resulted in significant environmental issues,
such as the discharge of greenhouse gases, hazardous pollutants, and accidental chemical
spills (Peng and Lin, 2008). In response to increasing worldwide environmental
apprehensions, the concept of Green Supply Chain Management (GSCM) has arisen.
GSCM refers to the incorporation of environmentally friendly practices into all aspects
of supply chain management. This encompasses product design, material selection,
manufacturing processes, delivery to customers, and proper disposal. According to
Bowersox and Closs (1996), the supply chain encompasses all processes involved in the
alteration and transportation of commodities or provisions from their raw material stage
to their final destination with the customers, both within and outside the organization.
Srivastava (2007) further highlights that GSCM involves considering environmental
factors throughout the entire supply chain process, from product design to customer
delivery.
The manufacturing industry has significant impacts on society, the environment, and
the economy, creating opportunities for individuals to contribute to sustainability efforts.
With a highly competitive market, businesses are seeking ways to decrease supply chain
expenses and have turned to green supply chain management as a means to achieve this
objective. GSCM has been identified as a vital management strategy to help companies
attain sustainability in their manufacturing processes by reducing environmental impact
and increasing efficiency, (De Giovanni, 2012).
Green supply chain management (GSCM) covers all aspects of supply chain
management that are required to comply with environmental regulations (Zhu & Sarkis,
2007). They assert that GSCM can be divided into intra-organizational and inter-
organizational environmental practices. It is important for a company to be aware of the
practices of other members in the supply chain and meet the expectations of stakeholders
(Ashby, Leat, & Hudson-Smith, 2007), as a company is a part of the supply chain. The
concepts and practices of environmental and social responsibility are increasingly
important and are considered a significant aspect of business requirements today (Ashby
et al., 2012).
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Reverse logistics refers to the process of returning materials and products from their
point of consumption to their original source with the aim of recovering or creating value
or disposing of them safely, all while minimizing the negative environmental impact of a
company's products. The term "reverse logistics" was coined by experts such as Carter &
Ellram (1998) and Srivastava & Srivastava (2006). Alnoor, Eneizan, Makhamreh &
Rahoma (2018) stated that businesses utilize reverse logistics for various reasons,
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Environmental concerns are gaining importance in the sugar industry due to various
factors such as pressure from environmentalists and local communities, increased
regulation, and market demands (Solomon, 2005). The sugar industry, along with other
intensive agricultural sectors, faces several environmental challenges. Murty, Kumar, and
Paul (2006) highlighted the need for sustainable production in the sugar industry,
emphasizing the importance of enhancing production systems to optimize water and
nutrient usage, conserve soils, and control weeds, pests, and diseases with minimal
pesticide impact.
The sugar industry faces numerous sustainability challenges due to its negative
environmental impacts like land use change, soil degradation, high water consumption,
atmospheric pollution from burning bagasse and trash, and loss of biodiversity from
monocultures (Duarte, Gaudreau, Gibson & Malheiros, 2013). According to Eustice et al.
(2011), cane burning reduces organic carbon in the soil, while green cane harvesting
improves it. They propose that to overcome these challenges, an environmental
management plan is necessary to control fertilizer use optimization, tillage techniques,
soil acidity and compaction, and avoid soil erosion. This plan should also promote the
ethical use of chemicals and conserve water and energy. Moreover, sugarcane production
has been associated with several significant socioeconomic risks, including rising
inequalities in rural areas, poor wages, and worker exploitation (Leal et al., 2013).
The production and processing of sugarcane has been linked to harmful effects on the
environment and society, including the destruction of natural habitats, excessive water
usage, heavy reliance on pesticides, and pollution of air and water (Sugar task force,
2020). Additionally, this industry affects the livelihoods of a significant portion of
Kenya's population, with about 25% depending on it and contributing to 15% of the
agricultural GDP. Despite these concerns, there have been no efforts made by Kenyan
sugar companies to demonstrate their sustainability practices and environmental impact.
Therefore, the purpose of this study is to evaluate the impact of GSCM techniques on the
environmental performance of sugar enterprises located in western Kenya.
The NEMA report of 2015 revealed that, despite the implementation of solutions such
as wastewater treatment, environmental contamination caused by sugar mills in Western
Kenya remains on the rise. Non-governmental organizations like the World Bank have
been promoting cleaner production methods to tackle this issue. An example of such
intervention is the LVEMP II project, which began in 2009 and is being undertaken by
the Kenya National Cleaner Manufacturing Center. This project permits firms to adopt
cleaner production practices voluntarily, thereby reducing pollution and enhancing their
competitiveness. However, the environmental performance of sugar companies in
Western Kenya continues to deteriorate, according to KSBs report of 2011.
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that the factory treated the effluents from sugar milling activities in six ponds before
releasing them into the river. However, the river was still heavily polluted, and the
pollution levels were higher than the permitted levels set by NEMA and WHO. The study
suggested that despite using recycling as a reverse logistics activity, the sugar factory
could not manage water pollution. Therefore, to enhance environmental performance,
sugar companies should adopt cleaner production methods, and all supply chain
participants must be involved both upstream and downstream. Similarly, Marabu
conducted a study in 2011 that revealed the presence of waste generation in sugar
production at Mumias Sugar Company. The study pointed out the high levels of chemical
emissions in the river Nzoia, excessive water consumption, and limited use of molasses.
The study suggested implementing green procurement, which involves disclosing the
environmental impact of all manufacturing inputs.
The preceding information highlights two key points: firstly, sugar companies are an
integral part of Kenya's economy; and secondly, these companies still contribute to
environmental pollution despite implementing cleaner production methods, which
requires a specific approach to address stakeholder concerns. While there is no empirical
evidence yet, it is believed that strict adherence to green supply chain management
(GSCM) principles can provide a long-term solution to these issues. GSCM involves
managing raw materials, components, and processes efficiently to reduce environmental
impact from suppliers to customers. Therefore, by adhering to green standards and
involving all supply chain participants, sugar companies can improve their environmental
performance. The impact of GSCM strategies on the environment performance of sugar
companies needs further exploration.
Environmental Performance
In this study, the measures of environmental performance were derived from Epstein
& Wisner's (2001) classification of such measures. These measures included categories
such as financial, internal process, customer, and learning and growth. Among the
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specific categories identified in the study were energy consumption, the establishment of
an eco-friendly image and reputation, financial savings resulting from environmental
efforts, and the generation of hazardous materials.
Conceptual Framework
Independent variable Dependent variable
As Zhu and Sarkis (2004) point out in the figure above, the independent variable, green
supply chain management, is expected to predict the dependent variable, environmental
performance. This relationship is projected to be moderated by Supply Chain Integration.
The constructs of green supply chain management are green manufacturing, green
procurement, green distribution, and reverse logistics (Ninlawan et al 2010), while supply
chain integration is measured by assessing the level of cooperation, coordination and
collaboration among supply chain partners.
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Literature Review
This review explores the underlying theories and guiding concepts of the study. The
theory that will guide the research is developed, concepts and variables are defined, and
variable dimensions are provided.
Stakeholder Theory
In this study, the term "stakeholder" refers to an individual or group that is affected by
the financial operations of a firm, as defined by Freeman (2010). Stakeholder theory is
one of the most significant theoretical philosophies in environmental management.
(Buysse & Verbeke, 2003). Focus has shifted from developing and analyzing the
justification for strategic decisions in green supply chains to the systematic coordination
of targets by businesses with their stakeholders, including internal business operations,
external stakeholders, and suppliers and customers. (e.g., public organizations).
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The study reviewed literature on the relationship between green supply chain
management and environmental performance to enable identification of gaps to be
addressed by policy and in the industry of sugar manufacturing in Kenya.
Li, Xue & Zhao (2021) conducted a global review on the practices of green supply
chain management (GSCM) and analyzed their effects on environmental performance.
Their study involved a literature review of GSCM and bibliometric analysis of
publications, where they observed a significant growth in the literature on GSCM over
the course of the last two decades. The review highlighted the various aspects of GSCM
such as green purchasing, green logistics, and green innovation. The bibliometric analysis
suggested that research on GSCM is widely spread across different disciplines and calls
for a multidisciplinary approach to address the issue of green supply chain management.
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organizational culture and EMPs (green manufacturing and green procurement) had a
significant impact on environmental performance. It was also observed that EMPs had a
positive effect on green organizational culture, thus providing evidence that EMPs and
environmental performance could be mediated by green corporate culture.
In another study, Jaaffar and Kaman (2020) looked at environmental performance and
GSCM techniques. The study focused on employee behavior in the Malaysian chemical
industry. Using a theoretical framework of GSCM practices, an empirical study of GSCM
practices and environmental sustainability was conducted. The results showed that
employees' perceptions of environmental sustainability in terms of green purchasing
practices had no significant relationship with product-related green design, packaging-
related ecological design, or reverse logistics.
The study by García Alcaraz, et al. (2022) aimed to examine how green supply chain
management (GSCM) practices affect the environmental performance of manufacturing
companies in Mexico. Specifically, the research focused on the maquiladora industry and
analyzed the relationship between GSCM practices, environmental impact (EI) and
environmental cost savings (ECS). The results showed that the implementation of an
environmental management system (EMS) had a significant effect on reducing EI (β =
0.442) and achieving ECS (β = 0.227). However, the use of eco-design (ED) did not have
a direct effect on EI (β = 0.019) or ECS (β = 0.006), which may be attributed to the
maquiladora industry's foreign ownership and focus on production rather than product
design.
Tran, Phan, Ha and Hoang (2020) conducted an assessment of the influence of supply
chain quality integration on green supply chain management, environmental
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performance, and financial performance. The research analyzed data from 568
Vietnamese tourism businesses. Based on the findings, it was observed that supply chain
quality integration had a constructive impact on green supply chain management and
financial performance. Moreover, green supply chain management had a favorable impact
on environment performance and financial performance. In addition, green supply chain
management entirely played the role of mediator in the relationship between supply chain
quality integration and financial performance. However, the size and institutional
pressure did not play any moderating role in the relationship between green supply chain
management and financial performance, and environment performance.
However, several other studies yielded varied outcomes, rendering it difficult to arrive
at any definite conclusions. Notably, Fianko, Amoah, and Dzogbewu (2021) established
that green design did not have a considerable positive connection with environmental
performance. Le (2020) studied the relationship between GSCM techniques and long-
term performance in Vietnamese manufacturing companies that produced building
materials. As per the analysis, green procurement had a constructive impact on economic
and social performance, but it had no effect on environmental performance. Conversely,
green design and manufacturing had positive and noteworthy benefits across three
outcomes categories. Furthermore, the findings indicated a positive and notable
correlation between sustainable distribution and environmental sustainability. Moreover,
there has not been any analogous research carried out in sugar manufacturing firms in
Kenya. Despite the fact that it plays a significant part in the discharge of industrial waste
into the river basins of Lake Victoria, which has led to a major environmental
management problem in the country. The actual effect of GSCM practices on the
environmental performance of sugar firms in Western Kenya remains uncertain.
Methodology
Research Design
The study was anchored on the positivist research philosophy. The main objective of
positivist research is to produce causal or explanatory relationships that, in turn, enable
prediction and management of the phenomenon under consideration. (Mir, &
Greenwood,2021). The current study fits this paradigm because it seeks to establish the
relationships that exist between GSCM practices, SCI and environmental performance of
firms. According to Park, Konge & Artino, (2020), isolating and limiting the impact of
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all factors so that only the important variables of interest are investigated is a key
objective in positivist experimentation.
Area of Study
The research was carried out in Western Kenya, where the majority of sugar mills are
located. Chemelil Sugar Company, West Kenya Sugar Company, Nzoia Sugar Company,
Sony Sugar Company, Kibos Sugar and Allied Industries, Butali Sugar Mills Limited,
Sukari Company, and Busia Sugar Company all participated in the study. The sugar mills
evaluated were those that are currently milling and have an environmental management
program in place. There were eight sugar companies surveyed.
Reliability Test
A pilot study was done with twenty (20) employees, accounting for 10% of the total
responders. A pilot research sample should be 10% of the sample expected for the bigger
parent study, according to Johanson & Brooks (2010). Connelly (2008), who also
suggested a 10% sample size for the study, agrees. These people were not a part of the
study and were left out of the final analysis. The questionnaires were examined for
validity and reliability, allowing any necessary adjustments to be made prior to the start
of the study.
The degree to which an experiment, test, or any measuring process provides the same
results in multiple trials is referred to as reliability. The goal of reliability is to determine
the consistency and accuracy of replies. The optimum motivation is to double-check the
instrument's stability by giving it to survey respondents twice. When working with top
executives, like in this study, this is more difficult (Sekaran, 2016). Cronbach's Alpha
was utilized to determine the instrument's reliability in this investigation (Cronbach,
1951). According to Ercan, et al, (2007), a study is considered appropriate if the
dependability coefficient is more than 0.7. Each of the independent, and dependent
variables were tested for reliability. The results are displayed in the table below:
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Because all Cronbach's alpha coefficients were over 0.70, the data collecting tool
provided a highly satisfactory score, as shown in table 1. Alpha coefficients greater than
0.70, according to Ercan et al., (2007), imply that the acquired data have a relatively high
level of internal consistency and can be extrapolated to reflect the opinions of respondents
in the target group. To determine if the instrument had any flaws, the data was cross-
checked. As a consequence of the pilot study's findings, the majority of queries were clear
and relevant.
Data Analysis
A blend of descriptive and inferential statistics was used to analyze the data.
Frequencies and percentages were used in descriptive analysis. When applicable, the
study used measures of central tendency like mean, mode, and median, as well as
measures of dispersion like range and standard deviation. The extent to which sugar firms
adopt supply chains that are environmentally friendly as well as their level of
environmental performance, was assessed using descriptive analysis of source data. To
measure the link between environmentally friendly supply chain management techniques
and performance, as well as test the hypotheses, inferential statistics were used. With
environmental performance as the dependent variable, GSCM practices as the
independent, multiple linear regression was used. Individual significance was determined
using the t-test. The null hypothesis was rejected in both situations above if the p-value <
0.05; otherwise, the null hypothesis was not rejected.
Regression Models
Where:
X1= Green Manufacturing,
X2=Green procurement
X3=Reverse Logistics
X4=Green Distribution
=Error Term
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Normality Testing
Normality was determined using skewness and kurtosis. The distribution was
considered normal if the skewness and kurtosis values were within the range of -2.0 to
2.0 (George, & Mallery, 2010). According to Table 4, the skewness and kurtosis values
for each variable were within the acceptable range. The normality assumptions were
therefore satisfied.
Std.
N Mean Skewness Kurtosis
Deviation
Std. Std.
Statistic Statistic Statistic Statistic Statistic
Error Error
Green
127 3.0958 1.01564 -.096 .215 -.849 .427
manufacturing
Green
127 3.1549 .88321 -.077 .215 -.570 .427
procurement
Reverse
127 3.1798 .94202 -.197 .215 -.688 .427
logistics
Green
127 3.4646 .85104 -.273 .215 -.563 .427
distribution
Environmental
127 3.4252 .87532 -.278 .215 -.640 .427
performance
The uniformity of variance was determined through Levene's test for similarity in
variances. The p-value for Levene's test should be greater than 0.05 in order to satisfy the
requirement of uniformity of variance, according to Glass (1966) and Ho (2013). The
homogeneity of variance assumption is violated if the p-value < 0.05. The idea of
homogeneity of variance makes sure that each independent group's distribution of
outcomes is comparable to or equal to another. If independent groups are not similar to
one another in this way, it might lead to false findings. According to the p-values found
for Levene's test, the homogeneity of variance has not been violated, so the proportions
of the outcome measures in each independent group are similar and comparable.
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N Correlation Sig.
Pair 1 GM & Environmental Performance 127 .468 .000
Pair 2 GP & Environmental Performance 127 .516 .000
Pair 3 RL & Environmental Performance 127 .480 .000
Pair 4 GD & Environmental Performance 127 .293 .001
The table above shows that, at a significance level of p<0.05, there was a positive and
significant correlation between all indicators of green supply chain management
strategies and environmental performance.
Assessing how green supply chain management practices impacted the environmental
performance of sugar companies in Western Kenya was the study's main objective.
Reverse logistics, green distribution, green manufacturing, and green procurement were
taken into account in the research as a function of the GSCM practices by sugar
companies. The average score of all items for each instance was used to compute the
construct scores, which were then used to create a multiple regression model.
The study went on to determine whether GSCM constructs had an effect on the
environmental performance of the surveyed sugar firms in western Kenya after testing
the assumptions of multiple regression and ensuring that the measures of GSCM practices
were reliable and could be validly used to measure what they were intended to measure.
The findings were summarized as shown below:
Table 5. Effect of GSCM practices on EP of sugar firms in Western Kenya
Unstandardized Standardized Collinearity
Model Coefficients Coefficients t Sig. Statistics
B Std. Error Beta Tolerance VIF
(Constant) .804 .034 23.555 .000
Z score (GM) .296 .034 .440 8.627 .000 .995 1.005
1 Z score (GP) .296 .035 .439 8.522 .000 .973 1.028
Z score (RL) .258 .035 .383 7.453 .000 .978 1.022
Z score (GD) .155 .035 .231 4.503 .000 .987 1.013
a. Dependent Variable: Performance
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The results show that green manufacturing (GM), green procurement (GP), Reverse
logistics (RL) and green distribution (GD) had beta standardized coefficients and p values
of β = 0.440, p< .05; β= 0.439, p< .05 and β = 0.383, p< .05 and β = 0.231, p< .05
respectively. These means all the beta coefficients, β, which are the degrees to which the
independent variables each explain the dependent variable, are positive and significant.
The standardized β coefficient of green manufacturing shows that a unit standard
deviation of GM causes 0.440 standard deviations in environmental performance of the
firms while a unit standard deviation of green procurement, reverse logistics and green
distribution causes 0.439, 0.383 and 0.231 standard deviations in environmental
performance of the sugar firms.
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R2 is 0.684 and is significant. Similarly, the adjusted R2 is 0.674 and also significant.
The shrinkage in this case is 0.01 (0.684-0.674) which is below the level of 0.5
recommended by Field (2013). This indicates that the model is valid, has good
predictability, and predicts variance of performance at 68.4 percent, insinuating that green
manufacturing (GM), green procurement (GP) reverse logistics (RL) and green
distribution (GD) all together explain 68.4 percent of the sugar firms’ environmental
performance. The analytic model that may be developed from this cause-and-effect
situation is as follows:
Sugar firms’ EP = 0.804+ 0.296GM+0.296GP+0.258RL+0.155GD
EP = Environmental performance
GM = Green manufacturing
GP = Green procurement
RL = Reverse logistics
GD = Green distribution
A hypothesis testing was carried out on the constructs of green supply chain
management using Friedman’s two-way analysis of variance at a significance level of
0.05. This test was used because the data was ordinal (Likert scale). The test can also be
used to determine if there are statistically significant differences for comparisons of
multiple groups. The results in the table below were obtained. The null hypothesis was
rejected.
The findings that GSCM practices were positive and significant predictors of
environmental performance of sugar firms are in line with those of Khaksar, et al (2016),
who conducted an investigation into how strategies of GSCM affect environmental
performance Iran’s the cement industry and discovered that there was a positive and
significant correlation. Al-Sheyadi, Muyldermans, and Kauppi (2019) also found a strong
positive correlation between environmental impacts and collective GSCM competency.
According to Afum et al. (2020), green organizational culture, green manufacturing, and
green procurement were also important indicators of environmental performance. Zhu
and Sarkis (2004) found that GSCM practices have a positive and significant impact on
environmental and operational performance in their investigation into the associations
between operational processes and performance among early implementers of
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In addition, Geng, Mansouri, and Aktas (2017) concur that GSCM approaches enhance
performance in four areas: social, operational, environmental, and economic.
Jermsittiparsert et al (2019) confirmed that environmental performance is significantly
and positively linked to GSCM strategies. In a similar vein, Korir (2014) discovered by
applying GSCM techniques, Nairobi's automobile industry improved its environmental
performance. Finally, Laari, Töyli, and Ojala (2018) discovered that Finnish logistics
service providers' financial and environmental performance were positively correlated
with GSCM practices, but not with financial performance. They also found out that these
outcomes were influenced by a competitive strategy and sustainable supply chain
management. Despite the fact that this study's findings are in line with those of previous
ones, there is no doubt that none of the four GSCM practices that were used in the current
study—green manufacturing, green procurement, green reverse logistics, and green
distribution were examined in the earlier ones.
The study's findings also indicate some Contradictions. Green procurement has an
impact on economic and social performance but has no impact on environmental
performance, according to Le, (2020), whereas Younis, et al., (2016) established that
green purchasing and reverse logistics have no significant impact on environmental
performance of firms in the UAE manufacturing industry. This can be explained by the
fact that the research was conducted in a variety of settings. Another contradiction was
by Eltayeb, Zailani, and Ramayah (2011) who found that green purchasing had no
significant impact on the environmental performance of ISO-14001 certified enterprises
in Malaysia. This means that green procurement may not always lead to improved
environmental performance, and in certain situations, it may not even predict
environmental performance at all, or possibly have a negative impact.
Another reason for the contraction could be the sampling method utilized in these
investigations. Earlier research employed single constructs of a variable on the sample,
however, the current study used census and was robust in constructs for each variable. A
study by Jaaffar and Kaman (2020) found that reverse logistics was not significantly
correlated with the environmental performance of Malaysian chemical-related industries.
This could be due to the fact that Malaysian companies are more focused on eco-design,
which reduces the need for recycling materials by designing products in such a way that
their environmental consequences are considered before final production.
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Study's Recommendations
The study recommends that Kenyan sugar firms keep employing environmentally
conscious practices throughout their operations, from the procurement of raw materials
through the process of development of products up until they are delivered to the final
consumer. This would guarantee that manufacturing enterprises' negative environmental
effects, such as the acceleration of global warming brought on by greenhouse gas
emissions, are kept to a minimum. Additionally, sugar firms have to continue to work
toward regional and global environmental recognition like ISO 14001, which will help
them compete in both domestic and foreign markets. In the current or any other
manufacturing context, future study should focus on moderation or mediation in the
interaction between GSCM, lean management, and firm environmental performance. This
will help to clarify the theories that underpin this research, particularly the stakeholder
theory. Corporate policy should also be aligned with initiatives that address global
warming and foster environmental sustainability.
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Numerous shortcomings in this study were found during the research process. First,
the study's use of selective sampling may have omitted participants whose viewpoints
would have considerably benefited in the formulation of theories and the testing of
hypotheses. However, the acquired data was examined and cleaned beforehand to
analysis, taking into account non-responses and outlier responses, in order to increase the
accuracy and validity of the results.
Second, the study concentrated on sugar producer firms in western Kenya since it
would have been expensive to cover the whole country. However, the results are
transferable to other production sectors. Lastly, the instrument for gathering data
comprised structured questions only that were administered purposively to respondents
by research assistants who were experts in the area. This may have left out important
opinions of other employees in the firms. Nevertheless, the sampling method used is
assumed to representative enough to make valid generalizations according to Creswell
(2013).
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Al-Sheyadi, A., Muyldermans, L., & Kauppi, K. (2019). The complementarity of green
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