Shephard MUGWENHİ, Chengedzai MAFİNİ, Elizabeth CHİNOMONA

A FRAMEWORK FOR ENVIRONMENTAL AND OPERATIONAL PERFORMANCE IN THE CONSTRUCTION SUPPLY CHAIN IN SOUTH AFRICA

With the proliferation of small businesses in the South African construction industry as fuelled by the black economic empowerment initiative, competition has increased significantly. As a result, construction businesses, especially smaller ones, face the pressure to improve their performance, which increases their chances of survival and success in this highly competitive industry. This study proposes and tests a conceptual framework for improving environmental and business performance in the South African construction industry. Specifically, the study examined relationships existing between social responsibility, green purchasing, environmental and business performance using data collected from SMEs operating in the construction industry. A quantitative approach using the cross-sectional survey design was applied in which data were collected from a convenience sample consisting of 213 respondents drawn from SMEs based in Gauteng Province. A structural equation modelling approach using SMART PLS 3 software was applied to test the formulated hypotheses. In the results of the study, social responsibility emerged as a driver for green purchasing and environmental performance. The purchase of green products leads to improvements in environmental performance. In turn, environmental performance was positively linked to business performance. However, there were no direct relationships between business performance and two predictor constructs, namely social responsibility and green purchasing. The study confirms the importance of social responsibility and green purchasing as antecedents of environmental and business performance in the construction industry. The study also confirms the mediating role of environmental performance on the relationship between business performance, social responsibility and green purchasing. To overcome the prevailing competition and succeed in their dynamic industry, construction SMEs could identify and create specific interventions for improving these two individual predictor factors.

Keywords:

Social responsibility green purchasing environmental performance, business performance, SME,

PDF

___

Abdi, A.M. & Ali Y.S.A. (2013). Innovation and business performance in telecommunication industry in Sub-Saharan African context: case of Somalia. Asian journal of Management Sciences & Education, 2(4), 53-67.
Adams, C. A. (2014). Sustainability and the Company of the Future, in Reinventing the Company in the Digital Age, Open mind. BBVA, 411-430.
Al-Ansari, Y., Pervan, S. & Xu, J. (2013). Innovation and business performance of SMEs: the case of Dubai. Education, Business, and Society: Contemporary Middle Eastern Issues, 6(3), 162-180.
Anderson, J.C. &Gerbing, D.W. (1998). Structural Equation Modeling in Practice: A Review and Recommended Two-Step Approach. Psychological Bulletin, 103(3), 411-423.
Balasubramanian, S. (2012). A hierarchical framework of barriers to green supply chain management in the construction sector. Journal of Sustainable Development, 5(10), 15-27.
Battaglia, M., Testa, F., Bianchi, L., Iraldo F. & Frey, M. (2014). corporate social responsibility and competitiveness within SMEs of the fashion industry: Evidence from Italy and France. Sustainability, 6, 872-893.
Bhool, R. & Narwal, M.S. (2013). An analysis of drivers affecting the implementation of green supply chain management for the Indian manufacturing industries. International Journal of Research in Engineering and Technology, 2(11), 242-254.
Butkovic, L.L., Kauric, A.G. & Mikulic, J. (2016). Supply chain management in the construction industry – a literature review: Paper presented at the nternational OFEL Conference on Governance, Management and Entrepreneurship, April 2016.
Chazireni, B. (2017). An investigation into corporate social responsibility on sustainable growth of wholesale and retail SMEs: A case study of Ethekwini Municipal Region. DUT. https://ir.dut.ac.za/bitstream/10321/2583/1/CHAZIRENI_B_2017.pdf [Accessed 21/06/2028]
Check, J. & Schutt R. K. (2012). Survey research. In: J. Check, R. K. Schutt., editors. Research methods in education. Thousand Oaks, CA: Sage Publications, 159–185.
Chell, E., Spence, L. J., Perrini, F. & Harris, J. D. (2014). Social entrepreneurship and business ethics: does social equal ethical? Journal of business ethics, 45(3):1- 7.
Chien, M.K., & Shih, L.H. (2007). An empirical study of the implementation of green supply chain management practices in the electrical and electronic industry and their relation to organizational performances. International Journal of Environmental Sciencies Technology, 4(3), 383-394.
Chinomona, R., Lin, J., Wang, M., & Cheng, J. (2010). Soft power and desirable relationship outcomes in Zimbabwe distribution channels. African Journal of Business, 11(2), 20-55.
Choongo, P. (2017). A longitudinal study of the impact of corporate social responsibility on firm performance in SMEs in Zambia. Sustainability, 9, 1-19.
Chun, S., Hwang, H.J. & Byun, Y. (2015). Green supply chain management in the construction industry: case of Korean construction companies. Procedia - Social and Behavioral Science, 186 507-512.
Cochran, P.L. (2007). The evolution of corporate social responsibility. Business Horizon, 50, 449-454.
Coltman, T., Devinney, T.M. & Midgley, D.F. (2011). Customer relationship management and firm performance. Journal of Information Technology, 26(3), 205–219.
Construction Industry Development Board. (2017). Construction monitor: supply and demand. Q1. 2017. http://www.cidb.org.za/publications/Documents/Construction%20Monitor%20- %20April%202017.pdf. Accessed 26/06/2018.
Crampton, N. (2016). Swot analysis of the construction sector in South Africa. https://bizconnect.standardbank.co.za/sector-news/construction/swot-analysis-ofthe-construction-sector-in-south-africa.aspx. Accessed 21/06/2018].
Crampton, N. (2018). Swot analysis of the construction sector in South Africa. https://bizconnect.standardbank.co.za/sector-news/construction/swot-analysis-ofthe construction-sector-in-south-africa.aspx . Accessed 22/06/2018.
Cullinan, C.P., Mahoney, L.S. & Roush, P. (2016). Corporate social responsibility and shareholder support for corporate governance changes. Social Responsibility Journal, 12(4), 687-705.
Darwish, T.K. & Singh, S. (2013). Does strategic human resource involvement and development enhance organizational performance? International Journal of Manpower, 34(6), 674–692.
De Bruyn, C. (2018). The challenges and opportunities facing South Africa’s space sector. [Online]. Available: http://www.engineeringnews.co.za/article/thechallenges-and-opportunities-facing-south-africas-space-sector-2018-03-22 [Accessed 22/06/2018].
Dlamini, S. (2008). Relationship of construction sector to economic growth. [Online]. http://www.sitsabo.co.za/docs/misc/cib_paper2012.pdf> [Accessed 21/06/2018].
Didiza, T. (2010). Construction sector will build growth. [Online]. Available: https://www.iol.co.za/business-report/economy/construction-sector-will-buildgrowth-didiza-716572 [Accessed: 2106/2018].
El Saadany, A.M.A., Jaber, M.Y. & Bonney, M. (2011). Environmental performance measures for supply chains. Management Research Review, 34(11), 1202-1221.
Epoh, L.R. & Mafini, C. (2018). Green supply chain management in small and medium enterprises: Further empirical thoughts from South Africa. Journal of Transport and Supply Chain Management, 12(0), a393. https://doi.org/10.4102/ jtscm.v12i0.393.
Etikan, I., Musa, S.A. & Alkassim, R.S. (2016). Comparison of convenience sampling and purposive sampling. American Journal of Theoretical and Applied Statistics, 5(1), 1-4.
Faure, M. & Svatikova, K. (2012). Criminal or administrative law to protect the environment? Evidence from Western Europe. Journal of Environmental Law, 24(2), 253-286.
Fornell, C. & Larcker, D.F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39-50.
Fredrik, O. (2000). Supply Chain Management in the Construction Industry. Doctoral thesis. Lund University, Sweeden. https://lup.lub.lu.se/search/ws/files/6117610/1593289.pdf. [Accessed 21/06/2018].
Geldenhuys, J. (2009). Corporate social responsibility in small business and medium enterprises inSouth Africa. In Aras, G., Crowther, D. and Vettori, S. (Eds), Corporate Social Responsibility in SMEs. Research Series: Issues in Corporate Behavior and Sustainability, Social Responsibility Research Network, Leicester.
Gigaba, M. (2014). Construction sector faces many challenges. South African News Agency. [Online]. Available: http://www.sanews.gov.za/southafrica/construction-sector-faces-many-challenges-gigaba [Accessed 22/06/2018]
Green Jr., K. W., Zelbst, P. J., Meacham, J., & Bhadauria, V. S. (2012). Green supply chain management practices: Impact on performance. Supply Chain Management: An International Journal, 17 (3), 1-44.
Henseler, J., Ringle, C.M. & Sarstedt, M. (2014). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115-135.
Hoyle, R.H. (1995). The structural equation modeling approach: Basic concepts and fundamental issues. In Structural equation modeling: Concepts, issues, and applications, R.H. Hoyle (editor). Thousand Oaks, CA: Sage Publications, Inc., pp. 1-15.
Ismail, M. (2009). Corporate social responsibility and its role in community development: an international perspective. The Journal of International Social Research, 2(9), 199-209.
Jayant, A & Azhar, M. (2014). Analysis of the barriers to implementing green supply chain management (GSCM) practices: an interpretive structural modeling (ISM) approach. Procedia Engineering, 97(1), 2157-2166.
Joshia, Y, Rahman, Z. (2015). Factors affecting green purchase behaviour and future research directions. International Strategic Management Review, 3, 128– 143.
Kanchanapibul, M., Lacka, E., Wang, X. & Chan, H. K. (2014). An empirical investigation of green purchase behavior among the young generation. Journal of Cleaner Production, 66, 528-536.
Kaufmann, H.R., Panni, M.F.A.K. & Orphanidou, Y. (2012). Factors affecting consumers’ green purchasing behavior: An integrated conceptual framework. Amfiteatru Economic, 14(31), 50–69.
Khan, R.A., Liew M.S. & Ghazali, Z.B. (2015). Malaysian Construction Sector and Malaysia Vision 2020: Developed Nation Status. Procedia - Social and Behavioral Sciences, 109, 507-513.
Khiewnavawongsa, S. & Schmidt, E.K. (2013). Barriers to green supply chain implementation in the electronics industry. Bangkok: IEEE. (2013 IEEE International Conference on Industrial Engineering and Engineering Management.)
Ladzani, M.W. & Seeletse, S.M. (2012). Business social responsibility: how are SMEs doing in Gauteng, South Africa? Social Responsibility Journal, 8(1), 87-99.
Lönngren, H., Rosenkranz, C. & Kolbe, H. (2010). Aggregated construction supply chains: success factors in implementation of strategic partnerships. Supply Chain Management: An International Journal, 15(5), 404-411.
Loury-Okoumba, W.V. & Mafini, C. & Loury-Okoumba, W.V. (2018). Extending green supply chain management activities to manufacturing small and medium enterprises in a developing economy. South African Journal of Economic and Management Sciences, 21(1),1-12.
Mafini, C. & Muposhi, A. (2017). The impact of green supply chain management in small to medium enterprises: Cross-sectional evidence. Journal of Transport and Supply Chain Management, 11(0), 1-11.
Magaya, C. & Nhavira, J.D.G. (2016). Corporate social responsibility and sustainable development in Zimbabwe: A study of listed firms in the construction industry. Journal of Strategic Studies: A Journal of the Southern Bureau of Strategic Studies Trust, 7(1), 42-59.
Majozi, T. & Veldhuizen, P. (2015). The Chemicals Industry in South Africa. American Institute of Engineers (AICHE), 46-51.
Mandl, I. (2009). The Interaction between Local Employment Development and Corporate Social Responsibility, Austrian Institute for SME Research, Elise Crunel, Vienna, January 2009.
Mathu, K. & Tlare, M.T. (2017). The impact of IT adoption in SMEs supply chains: A case of Gauteng and Free State provinces of South Africa. South African Journal of Business Management, 48(3), 63-71.
McAlister, D.T. (2005). Business and society: a strategic approach to social responsibility, Houghton Mifflin, Boston, MA.
Mishra, S. & Mohanty, P. (2014). Corporate governance as a value driver for firm performance: evidence from India. Corporate Governance, 14(2), 265-280.
Mofekeng, N.E.M., Giampiccoli, A. & Jugmohan, S.N. (2018). Black economic empowerment led transformation within the South African accommodation industry: The case of Clarens. African Journal of Hospitality, Tourism and Leisure, 7(1), 1-16.
Motsetse, M.J. (2015). The role of government in developing sustainable SMEs in the construction sector in the Free State province’, Masters dissertation, Business School, University of the Free State, Bloemfontein, South Africa.
Muduli, A. (2015). High-performance work system, HRD climate and organizational performance: an empirical study. European Journal of Training and Development, 39(3), 239-257.
Muniz, B., Peon, J. & Ordas, C. (2009). Relationship between occupation safety management and firm performance. Safety Science, 47(7), 980-991.
Narbaiza, L., Ibañez, A. Aragón C. & Iturrioz, C. (2009). A proposal for measuring social responsibility activities in SMEs. In: Aras G, Crowther, D and Vettori S (eds). Corporate social responsibility in SMEs. Research series: Issues in corporate behavior and sustainability. Social Responsibility Networks, UK.
Narver, J.C. & Slater, S.F. (1990). The effect of market orientation on business profitability. Journal of Marketing, 54(1), 20-35.
Nguegan-Nguegan, C.A. & Mafini, C. (2017). Supply chain management problems in the food processing industry: Implications for business performance. Acta Commercii, 17(1), 1-15.
Ninlawan, C., Seksan, P., Tossapol, K. & Pilada, W. (2010). The Implementation of Green Supply Chain Management Practices in Electronics Industry. Proceedings of the MultiConference of Engineers and Computer Scientist, 3, IMECS 2010, March 17-19, 2010, Hong Kong.
Ntsika Enterprise Promotion Agency. (2002). State and Small Business Development in South Africa Annual Rev. [Online] Available: http://www.ntsika.org.za [Accessed: 22/06/2018].
Nunnally, J. & Bernstein, I.H. (1994). Psychometric Theory. New York: McGraw Hill, 3rd ed.
Ofori, G. (2015). Nature of the Construction Industry, Its Needs, and Its Development: A Review of Four Decades of Research. Journal of Construction in Developing Countries, 20(2), 115–135.
Okanga, B. (2016). A safety culture development model for the SMEs in the building and construction industry. Journal of Emerging Trends in Economics and Management Sciences (JETEMS), 7(3), 106-115.
Olughor, R.J. (2015). Effect of Innovation on the Performance of SMEs Organizations in Nigeria. Management, 5(3): 90-95.
Othman, A.A.E. & Mia, B. (2008). Corporate social responsibility for solving the housing problem for the poor in South Africa. Journal of Engineering, Design, and Technology, 6(3), 237-257.
Peart, R. (2001). External factors influencing the environmental performance of South African firms. South African Journal of Science, 97, 2-8.
Perotto, E., Canziani, R., Marchesi, R. & Butelli, P. (2008). Environmental performance, indicators and measurement uncertainty in EMS context: A case study. Journal of Cleaner Production, 16(4), 4112-4124.
Pillay, P. & Mafini, C. (2017). Supply chain bottlenecks in the South African construction industry: Qualitative insights. Journal of Transport and Supply Chain Management 11(0), 1-12.
Pooe, D., Mafini, C. & Loury-Okoumba, V.W. (2015). The influence of information sharing, supplier trust and supplier synergy on supplier performance: The case of small and medium enterprises. Journal of Transport and Supply Chain Management, 9(1), 1-11.
Ramakrishnan, P., Haron, H. & Goh, Y. (2015). Factors influencing green purchasing adoption for Small and Medium Enterprises (SMEs) in Malaysia. International Journal of Business and Society, 16(1), 39-56.
Ramayah, T., Lee, J.W.C. & Mohamad, O. (2010). Green product purchase intention: Some insights from a developing country. Resources, Conservation and Recycling, 54(12), 1419-1427.
Rust, F.C., Botha, C., Van Wyk, L., Steyn, W., Du Plessis, C. & Landman, K. (2013). South African construction industry technology foresight study: Summary report of a desktop study, CSIR Technical Report, CSIR, Pretoria.
Rylkova, Z. (2015). Measurement of business performance in relation to competitors. Economics and Management Volume, 7(2), 13-19.
Sayed, Z. & Sunjka. B.P. (2016). Investigating and evaluating the influence of Supply Chain Structure on Supply Chain Risk. South African Journal of Industrial Engineering, 27(3), 122-135.
Schaefer, A. & Crane, A. (2005). Addressing sustainability and consumption. Journal of Macromarketing, 25; 76-92.
Schermerhorn, J.R., Hunt, J.G. & Osborn, R.N. (2005). Organizational behaviour. 9th ed., Hoboken, NJ: Wiley.
Srivastav, P. & Gaur, M.K. (2015). Barriers to implementing green supply chain management in the small-scale industry using interpretive structural modeling technique – a north Indian perspective. Journal of Advances in Engineering and Technology, 2(2), 6-13.
Statistics South Africa. (2016). Statistics South Africa on community Survey 2016 results. [Online]. Available: https://www.gov.za/speeches/community-survey2016-results-1-jul-2016-0000 [Accessed: 21 August 2018].
Tavakol, M. & Dennik, R. (2011). Making sense of Cronbach's alpha. International Journal of Medical Education, 2, 53–55.
Turker, D. (2008). Measuring corporate social responsibility: a scale development study. Journal of Business Ethics, 85:411–427.
Wozniak, A. (2011). The missing subject found in the subject who does the thinking: Kierkegaard, the Ethical and the subjectivity of the critical theorists. Business Ethics: A European Review, 20(3) 304-315.
Joshi, Y. & Rahman, Z. (2016). Predictors of young consumer’s green purchase behaviour. Management of Environmental Quality: An International Journal, 27(4), 452-472.
Yen, Y. X. & Yen, S. Y. (2012). Top management's role in adopting green purchasing standards in high-tech industrial firms. Journal of Business Research, 65(7), 951-959.
Yildiz, S. & Karakas, A. (2012). Defining methods and criteria for measuring business performance: a comparative research between the literature in Turkey and foreign. Procedia - Social and Behavioral Sciences, 58, 1091-1102.
Zhi., H.L. (2014). A comparison of convenience sampling and purposive sampling. PubMed, 61(3), 105-111.
Zhu, Q., Sarkis, J. & Lai, K.H. (2008). Confirmation of a measurement model for green supply chain management practices implementation. International Journal of Production Economics, 111(2), 261-273.