The purpose of this paper is to investigate the impact of institutional drivers and buyer dependency on green supply chain management (GSCM) practices and performance of suppliers.
The authors draw on institutional theory and resource dependence theory to construct a conceptual model than links institutional drivers, GSCM practices, buyer dependency and performance outcomes. The authors test the hypotheses using partial least squares structural equation modeling applied to a sample of suppliers in the Australian manufacturing sector.
The results confirm that suppliers develop GSCM practices of green sourcing and eco-design to enhance their performance in response to both coercive forces and voluntary behaviors of their institutional environment. However, buyer dependence of suppliers explains important paradoxes in their uptake of GSCM practices. For example, while the institutional drivers encourage greater adoption of green sourcing by suppliers, increase in buyer dependence in turn reduces the positive performance outcome of green sourcing.
The authors establish that understanding and assessment of the role of buyer dependency is critical for managers in charge of GSCM practices of their company. This enables practitioners to proactively manage paradoxes resulting from institutional drivers and buyer dependency through an informed decision on the type of GSCM practice to be adopted for effectuating performance improvement.
The authors provide empirical evidence on paradoxes that curtail performance associated with the uptake of GSCM practices by suppliers moving beyond institutional environment by considering the role of buyer dependency.