Impact of Green Supply Chain Management on Competitive Advantage of Business Organizations in Sri Lanka

Impact of Green Supply Chain Management on Competitive Advantage of Business Organizations in Sri Lanka

A. R. Sadurdeen (Uva Wellassa University of Sri Lanka, Sri Lanka) and Jayaranjani Sutha (Uva Wellassa University of Sri Lanka, Sri Lanka)
DOI: 10.4018/978-1-5225-7299-2.ch004

Abstract

Organizations adopt many strategies to gain competitive advantage. An important strategy is adopting green practices. Cost-benefit and customer value enhancement are two other strategies. By combining all of these elements, organizations can acquire a superior competitive advantage. There are contradictory findings on applying the cost-benefit element to green supply chain management (GSCM) and no clear theory on how to combine these elements to gain a competitive advantage. The primary objective of this study is to identify the impact of GSCM on competitive advantage of business organizations in Sri Lanka. Sample technique used was convenience sampling method. Data was collected from 30 organizations that were following green practices in Sri Lanka. The data were analyzed using descriptive analysis, correlation coefficient, and simple regression model. The results show that there is a strong positive relationship between GSCM and competitive advantage, and rather than applying just one element to gain a competitive advantage, it was considered more effective to apply both cost-benefit and customer value enhancement simultaneously.
Chapter Preview
Top

Background

According to Martin Christopher (2011), to gain a competitive advantage the organization should have value advantage and cost advantage.

Figure 1.

Gaining competitive advantage

978-1-5225-7299-2.ch004.f01
Source: Logistic and supply chain management, 4th edition by Martin Christopher

Further, as per Porter’s theory, an organization’s competitive advantage hinges on its capability to be a low-cost producer in its industry or to be unique in its industry in those features that are popularly valued by consumers (Porter, 1991). Most executives agree that cost and value will determine the strength of a firm’s competitive advantage (D’ Souza & Williams, 2000).

The important competitive capabilities have been identified as price or cost, quality, supply chain management, and time (Vokurka et al., 2002). Supply chain management (SCM) plays an important role in helping firms to gain competitive advantage (Mentzer et al., 2001). SCM starts with the purchase of raw materials, and applied consistently to the many production activities that change raw materials into the finished product and until it is finally delivered to consumers through a distribution system (Lee & Billington, 1995). The actual competition will not be among business organizations but among supply chains. An organization’s competitive advantage is dependent on its overall production system and that includes decisions it makes about activities in its value chain (Haytko & Kent, 2007; Porter, 1990).

Complete Chapter List

Search this Book:
Reset