cleaner production, environmental sustainability and organizational performance: an empirical study...
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Cleaner Production, Environmental Sustainability and Organizational Performance:An Empirical Study in the Brazilian Metal-Mechanic Industry
Eliana Andréa Severo, Professor Program of Business Administration Dr. Julio CesarFerro de Guimarães, Program of Business Administration Dr. Eric Charles HenriDorion, Professor Program of Business Administration Dr Cristine Hermann Nodari,Doctor in Administration Dr
PII: S0959-6526(14)00615-5
DOI: 10.1016/j.jclepro.2014.06.027
Reference: JCLP 4422
To appear in: Journal of Cleaner Production
Received Date: 21 December 2013
Revised Date: 5 June 2014
Accepted Date: 9 June 2014
Please cite this article as: Severo EA, Guimarães JCFd, Dorion ECH, Nodari CH, Cleaner Production,Environmental Sustainability and Organizational Performance: An Empirical Study in the Brazilian Metal-Mechanic Industry, Journal of Cleaner Production (2014), doi: 10.1016/j.jclepro.2014.06.027.
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Cleaner Production, Environmental Sustainability and Organizational Performance: An Empirical Study in the Brazilian Metal-Mechanic Industry
Eliana Andréa Severo, Dr. Professor Program of Business Administration, Programa de Pós-Graduação em Administração (PPGA), University Potiguar – UnP. Avenida Engenheiro Roberto Freire, 1684 – Capim Macio, Natal/RN, 59082-902, Brasil. Phone: 55.84.3215-1137, e-mail: [email protected]
Julio Cesar Ferro de Guimarães, Dr* Professor Program of Business Administration, Programa de Pós-Graduação em Administração (PPGA), University Potiguar – UnP. Avenida Engenheiro Roberto Freire, 1684 – Capim Macio, Natal/RN, 59082-902, Brasil. Phone: 55.84.3215-1137, e-mail: [email protected] *Corresponding author
Eric Charles Henri Dorion, Dr Professor Program of Business Administration, Programa de Pós-Graduação em Administração (PPGA), University of Caxias do Sul, UCS, Rua Francisco Getúlio Vargas, 1130 - CEP 95070-560 - Caxias do Sul - RS – Brasil, Phone: 55.54.3218-2011, e-mail: [email protected] Cristine Hermann Nodari, Dr Doctor in Administration, Programa de Pós-Graduação em Administração (PPGA), University of Caxias do Sul, UCS, Rua Francisco Getúlio Vargas, 1130 - CEP 95070-560 - Caxias do Sul - RS – Brasil, Phone: 55.54.3218-2011, e-mail: [email protected]
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Empirical Study in the Brazilian Metal-Mechanic Industry
ABSTRACT
As a result of globalization and industrial development, concerns about pollution and the environment encompass a global level, considering that any environmental degradation can undermine an entire local ecosystem and may generate negative impacts on different biomass. Accordingly, organizations can minimize their environmental impact, by making use of environmental practices such as methodologies on cleaner production. The Automotive Metal-Mechanic Cluster of Serra Gaúcha, Brazil, is known as an important industrial Pole in Brazil, due to its high concentration of spare parts, agricultural machinery and transport vehicles production companies. This Cluster is currently the second largest of its kind in Brazil. Therefore, this study aimed to analyze the relationship between the concepts of cleaner production, environmental sustainability and organizational performance in 298 companies of the Serra Gaúcha Cluster. A survey was realized and Structural Equation Modeling was implemented for data analysis. The results show that those Serra Gaúcha companies seek alternative processes to reduce costs and contribute to the company's image for their customers. It was also observed that Cleaner Production practices influence environmental sustainability, as well as organizational performance; showing that cleaner production methodologies contribute to increase production capacity and flexibility and improve aspects of health and safety. Finally, it is worth noting that companies in the Serra Gaúcha tend to become committed to environmental sustainability, to the welfare of their workers, to society and its environment; adapting to such reality either by coercive and normative pressures. Key-words: Cleaner production; Environmental sustainability; Organizational performance; Brazilian metal-mechanic industry; Structural Equation Modeling. 1. Introduction
As a result of intense global industrial development, environmental impacts have
evolved on a worldwide basis. In that perspective, any environmental degradation that
may occur in any specific location of the planet can harm the entire local ecosystem,
and its negative impact can also be felt in any other regions (Rosenbloom, 2001;
Hoffman, 2001).
Accordingly, the organizations can minimize their environmental impact by
making use of environmental practices, such as the cleaner production methodologies.
The Cleaner Production (CP) program was developed by the United Nations
Development Program, as a basic tool for the making of a prevention program, which
was implemented in various developing countries. Actually, the program is used by
more than twenty centers, located in various countries, which constitute the Cleaner
Production International Centers.
The concept of cleaner production refers to actions that allow a company to
qualify itself as an efficient user of raw materials and energy during a production
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and improve organizational performance.
In Brazil, the Brazilian Cleaner Production Center was created in 1999 and is
represented by the National Center for Clean Technologies, which is linked to the
National Service for Industrial Apprenticeship of Rio Grande do Sul (Cntl, 2013). The
National Center for Clean Technologies promotes sustainable development in national
companies, spreading the philosophy of eco-efficiency and systematic tool for the CP
program, to enhance competitiveness, innovation, social responsibility and
environmental organizations. In this sense, the methodology for implementation of CP
program follows five distinct stages (Cntl, 2013), namely: i) organizational strategy and
planning, ii) pre-assessment and diagnosis activities; iii) CP program evaluation
process, iv) technical, economic and environmental feasibility studies, and v)
implementation and monitoring actions.
The implementation of the CP program needs to be integrated within an
organization, which has a continuous and open system, and is being managed by an
effective leadership nucleus within an organization, through a dynamic communication
process between the employees and the customers (Tseng et al., 2007). As revealed by
Zwetsloot (1995), the CP programs do not guarantee continued environmental progress.
A cleaner production plan should therefore be integrated in an environmental
management scheme or through a systemic approach of integrated management
Boyle (1999) presents experiences of CP program in New Zealand companies,
identifying the methods that are required to adopt a cleaner production program within
small and medium manufacturing industries. For the author, a company can only set up
a CP program when it is convinced of its benefits as well as the positive changes that
will affect its production system. The CP program concept considers the environmental
variables at all levels of the organization, characterized by actions that are implemented
within a company, especially in the production process, in order to transform it into a
more efficient process (Severo et al., 2012).
A CP program stands to reduce systemic waste, emissions and inputs, as a way
to improve the conformity of products (Kliopova and Staniskis, 2006; Hicks and
Dietmar, 2007). In this scenario, the CP program refers to the actions that allow a
company to qualify in the efficient use of raw materials and energy in a production
process; as it acts pre-emptively to promote a holistic view of resources and production
on the economy and the environment. It can improve material utilization and reduce
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Kjaerheim, 2005; Nielsen, 2007; Shin et al., 2008; Bonilla et al., 2010). Moreover, it
requires the application of specific knowledge, investment in technology and changes in
attitude from the shareholders and the employees (Baas, 1995, 2007; Geiser, 2001).
The Automotive Metal-Mechanic Cluster (AMMC) of Serra Gaúcha (Fig. 1) is
seen as an important industrial Pole in Brazil due to its high concentration of companies
in the segments of parts, agricultural machinery and transportation vehicles. It
represents the second largest AMMC of Brazil, with a turnover of U.S. $ 20.5 billion in
2010; where most of its 2,588 companies are micro and small companies (95%),
generating about 62,775 jobs (Simecs, 2012). The AMMC involves 17 municipalities of
the Serra Gaúcha region, where the city of Caxias do Sul represents approximately 60%
of its Gross Value Added (GVA), hosting the largest number of companies. The region
of Caxias do Sul represents a high concentration of manufacturing activities, mainly
composed by the automotive manufacturing sector, such as buses, trucks, agricultural
machinery, and agricultural and road auto parts. In 2010, the city of Caxias do Sul had a
population of 435 564 inhabitants, with 31,016 companies in various related activities
(Ibge, 2011), making it one of the most entrepreneurial region in Latin America, with an
index of approximately 14 inhabitants per company.
Given the importance of the AMMC of Serra Gaúcha, for the Brazilian industrial
productivity and its economy, this study aims to analyze the relationship between a
cleaner production strategy, environmental sustainability and organizational
performance in 298 companies of the AMMC of Serra Gaúcha; which constitutes a
representative sample of the industry of the region of Caxias do Sul. In that context, it
was used for data analysis technique Structural Equation Modeling (SEM).
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Fig. 1.The map of the State of Rio Grande do Sul (RS) - Brazil
2. Research hypothesis
2.1 Cleaner production and environmental sustainability
For Burritt et al. (2009), companies do not exploit the full potential of CP
programs to reduce environmental impacts. It is noteworthy that the environmental
impacts compromise the availability of natural resources that may become scarce for
industrial production, and consequently environmental sustainability is being
undermined.
Fresner (1998), Geiser (2001), Baas (2007) and Severo et al. (2012) all consider
that CP program strategies generate a better use of inputs, reduce consumption of
natural resources such as water and energy, and is being positively related to
environmental sustainability.
A CP program is also associated to the reduction of environmental impacts
throughout the life cycle of a product (Dunn and Bush, 2001), contributing to achieve
environmental improvements in process and product development, as well as greater
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hypothesis of this research exposes the following:
H1: Cleaner production is positively related to environmental sustainability;
2.2 Cleaner production and organizational performance
Many companies are not only being confronted with the need to improve their
environmental performance, but also to improve performance in quality, health, safety
(working conditions), market opportunities, cost reduction and competitiveness
(Zwetsloot, 1995; Kliopova and Staniskis, 2006; Burritt, Herzig and Tadeo, 2009).
For Zeng et al. (2010) different types of efforts linked to a CP program may
have different implications for business performance; for example, the adoption of a
ISO 14001 environmental management system requires less immediate financial inputs
but may have a longer impact on a firm's daily reforms and operation. The authors
conducted a study on 125 Chinese industries that emphasizes on the overall positive
impact of cleaner production on business performance. Consequently, it can be
considered that a CP program is positively related to the reduction of inputs used in a
production reform scheme, to increase productivity and consequently to increase
competitiveness and organizational improvement (Getzner, 2002; Kjaerheim, 2005;
Severo et al., 2012). Therefore, ecological investments are perceived as an opportunity
to generate new business and new market niches (Kolk andMauser, 2002), generating
the following hypothesis as:
H2: Cleaner production is positively related to improved organizational performance;
2.3 Environmental sustainability and organizational performance
A review of the literature introduces an interesting spectrum of researches on
environmental sustainability and organizational performance from different parts of the
world. However, no real consensus has been reached yet (Halkos and Evangelinos,
2002; Kassinis andSoteriou, 2003; Zhang et al., 2008; López-Gamero et al., 2009;
Molina-Azorín et al., 2009; Lin, Tan and Gen, 2012). A study conducted by Zhang et al.
(2008) in 89 Chinese companies, which evaluates the performance of corporate
environmental management, points out that companies prefer to pay an emission fee and
fine, rather than to promote the performance of environmental management.
For Kassinis and Soteriou (2003), environmental practices are positively related
to organizational performance, as it can be measured by satisfaction and loyalty.
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practices and performance in Spanish hospitality companies. For the authors, companies
that have a strong commitment to environmental practices have higher levels of
performance as well as environmental practices.
Lin et al. (2012) analyzed 208 companies in Vietnam, and stressed that
environmental sustainability is positively associated with organizational performance.
Since, it can be understood that the implementation of environmental practices is
positively related to the reduction of production costs and consequently improving a
company's image, which contributes to organizational performance (Halkos and
Evangelinos, 2002). Consequently, a third hypothesis emerges as:
H3: Environmental sustainability is positively related to organizational performance.
Based on these assumptions, Figure 2 presents a theoretical model composing
the three research hypotheses.
Fig. 2.Proposed model of hypothesis.
3. Method
The present study implemented a descriptive survey (Hair Jr. et al., 2007),
through the use of questionnaires; giving a more appropriate judgment in relation to the
characteristics of the subject investigated. The questionnaire was developed from an
extensive literature review applied to CP program and environmental sustainability, in
the context of organizational studies. It is noticed that before the final application of the
questionnaire, 31 organizations of the AMMC of Serra Gaúcha were tested to verify the
clarity and the understanding of the issues. The questionnaire was also validated by two
experts from the area. The experts are researchers from the areas of administration,
environmental management and CP program, which perform several lectures and have
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survey are shown as in Table 1.
Table 1
Observable and latent variables.
ObservableVariables* LatentVariables
CP1) Cleaner Production decreased the emission of waste. CP2) Cleaner Production decreased the consumption of raw materials. CP3) Cleaner Production decreased energy consumption. CP4) Cleaner Production decreased water consumption. CP5) Cleaner Production contributed to reduce the impact on the environment.
Cleaner production
ES1) The company has a policy of environmental sustainability in product development. ES2) The company has a policy of environmental sustainability in development processes. ES3) The company applies sustainability committed to the welfare of its employees, society and the environment.
Environmental sustainability
OP1) Cleaner Production increased production capacity. OP2) Cleaner Production increased production flexibility. OP3) Cleaner Production reduced production costs. OP4) Cleaner Production contributed to improve aspects of health and worker safety. OP5) Cleaner Production improved the quality of goods or services offered.
Organizational performance
* Was used a 5-point Likert scale: 1 – Strongly disagree; 2 - Disagree; 3 – Neither disagree or agree; 4 – Agree; 5 – Strongly agree.
Data collection occurred from April to December 2012. A number of 950
companies were selected from a total of 2,588 companies of the AMMC in Serra
Gaúcha, featuring an arbitrary non-probabilistic sample and using an easy access
criterion, through an updated contacts list of companies of the Metal-mechanic
Federation of Industries of the State of Rio Grande do Sul (FIERGS, 2011). The
questionnaires were sent by e-mail followed by follow-up telephone interviews. The
companies’ contacts were obtained through the Industrial Register of Rio Grande do Sul
of 2011, provided by the Federation of Industries of the State of Rio Grande do Sul
(FIERGS, 2011). A quantity of 371 questionnaires was returned from a total of 669.
Almost 20% of them was not considered for the study, since 73 questionnaires included
a large number of non-responses (missing) on the issues or were not filled in properly,
making a valid sample of 298 questionnaires.
In order to relate the size of the companies, the criteria of annual gross revenues
(Brazil, 2007) was used to differentiate the sample of companies, where they were
characterized as: i) large companies with a gross annual income exceeding R$
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3,600,000.00 and R$ 300,000,000.00; as iii) Small business with a gross annual income
between R $ 360,000.00and R$ 3,600,000.00; and as iv) micro with a gross annual
income equal to or less than R $ 360,000.00. The final sample included a number of 298
companies distributed in micro and small (89%), and medium and large (11%)
enterprises. In relation to capitalization and its origin, 279 companies (93.6%) were
considered as national funded, and 19 (6.4%) were identified as companies with foreign
capital.
Companies participating in the survey responded to the questionnaire, as shown
in Table 1, within a degree of agreement or disagreement. The evaluation tool was a 5-
points Likert scale, with a position of (1) strong disagreement to (5) strong agreement.
Byrne (2010) points out that a five points Likert scale does not originally have a
continuous distribution, but it partly fulfills the requirement of continuity when used in
a cumulative way.
The subjects of the research are constituted of key leading elements in all
companies, such as 41 directors, 193 managers and 64 coordinators; considering their
involvement in the decision process and their understanding about the importance of
having a cleaner production strategy at all levels, to generate environmental
sustainability. The directors are responsible for developing corporate policies and
environmental strategies. They are either managers or engineers contributing to the
development and the implementation of corporate policies and environmental strategies,
accounting for the control and the adjustment of environmental practices.
Some operational challenges were noticed, as difficulties occurred in the data
collection process, because many organizations, especially micro and small, do not have
specific departments that deal with environmental issues.
For the analysis and interpretation process, the SEM process uses a set of
methodological procedures of statistical analysis that allows simultaneous examination
of a series of dependence relationships (Hair et al., 1998; Maruyama, 1998; Kline,
2005). The SPSS ® version 20 software for Windows ® and the AMOSTM Version 18
software coupled with SPSS ® were used to perform the statistical calculations and to
enable the application of SEM, which offered the necessary functionality for the
analysis and the modeling the method requires (Byrne, 2010).
To analyze the assumptions of normality of the observed variables, were used
the kurtosis indices through the Mardia index (Mardia, 1971), the Pearson asymmetric
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important element in the data analysis refers to the multivariate outliers which were
assessed by the Mahalanobis calculation (Kline, 1998). Composed data validity was
also considered, by testing data with the Cronbach's alpha and the Kaiser-Meyer-Olkin
(KMO) tool, to evaluate the reliability of the data as recommended by Hair et al. (2007)
and Marôco (2010).
Based on the recommendations of Hair et al. (2007) in the application of SEM,
the following indices were used to examine the proposed model: i) Chi-square; ii) Level
of liberty iii) Chi-square divided by the level of liberty; iv) Comparative Fit Index
(CFI); v) Normed Fit índex (NFI); vi) Goodness of Fit Index (GFI); vii) Adjusted
Goodness of Fit (AGFI); viii) Root Mean Squared Error of Approximation (RMSEA).
4. Results and discussion
The hypotheses were transformed into equations (Fig. 3); represented in a “path
shaped diagram”, which present causal dependency relations between observable and
latent variables (Hair et al., 1998, Kline, 2005). This path shaped diagram allows the
presentation of the relationships between all constructs (latent variables) (Hair et al.,
1998). A framework to measure the relationship between cleaner production,
environmental sustainability and organization performance was developed in such
causal logic.
As presented in Figure 3, the directional arrows show that there is a direct
relationship between all constructs. This relation is measured by observable variables
and appears in the construct of cleaner production, as a measured process of
environmental sustainability, and for the construct of organizational performance as a
productive capacities and impacts on costs measures.
Prior to the validation of the individual latent variables (constructs), which
occurs through a Confirmatory Factor Analysis process, an analysis of the assumptions
of normality of the observable variables was carried out. For such analysis, the kurtosis
indicators, the asymmetry, the sample means and the multi-normality variances were
calculated and interpreted. The kurtosis analysis for each variable was evaluated by the
Mardia observable coefficient, which presented values less than five, or in other words,
of significance (Mardia, 1971; Bentler, 1990). Another aspect identified are the values
related to the asymmetry of the observed variables, showing asymmetric Pearson
coefficients close to zero, which feature a moderate symmetry (Marôco, 2010). From
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which is considered by Kline (1998) as a missing low level.
In the data outliers were identified, through a combination of univariate and
multivariate analysis and by calculating the Z scores, 73 cases with values greater than |
3 |, for each variable, which needed to be excluded from the final sample (Hair Jr. et al.,
2007). To calculate the Z score, all values that exceed a 3.3 Standard Deviation (SD) of
the sample mean were excluded from the sample, since the probability of a value
occurring outside this range (-3.3, 3.3 ) appears at a little or not representative rate of
only 1,24% of the population. The multivariate outliers were identified by the
Mahalanobis calculation, in cases of higher extremes scores, which were considered as
multivariate outliers. However, such test did not identify any case, since there was a
significant distance between the individual values and sample means obtained, as
suggested by Kline (1998).
To assess whether there are differences between the groups (micro, small,
medium and large), an ANOVA test (Hair Jr. et al., 2007) was executed and it showed
no significant difference between the sizes of companies.
The validity of the constructs was made through the analysis of the consistency
of measurement of the actual loads, demonstrating that the constructs in this study were
higher than expected (0.70), although this is not a standard of conduct (Marôco, 2010).
The test showed the following results for: cleaner production (0.84), environmental
sustainability (0.86), and organizational performance (0.77). Based on Hair et al. (2007)
assessment and to check the internal consistency of the questionnaire, a Cronbach’s
alphatest was calculated. The results showed the following rates: cleaner production
(0.8), environmental sustainability (0.8), and organizational performance (0.7).
Furthermore, the Kaiser-Meyer-Olki (KMO) test showed correlations between all
variables, providing a statistical probability that the correlation matrix has significant
correlations between variables. Therefore, this research showed a KMO index of 0.794,
indicating that the factor analysis is appropriate (Pestana and Gageiro, 2005).
4.1 Validation of individual constructs and discussion of the integrated model
The evaluation of the proposed model (Fig. 2) began with the individual
validation of each construct. Subsequently, some changes in each dimension were made
in search for a better model fit. At that stage, the estimated coefficients were used to
provide information on the extent to which a given observable variable is capable of
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square, RMSEA, AGFI, NFI, GFI and CFI (Table 2).
The chi-square in the original model was significant, indicating that there are
differences between the observed matrix and the estimated matrix. To assess the
significance level, it was used a chi-square (χ2) ratio with degrees of freedom (df),
which give an acceptable index of 3,5 (Table 2), inferior or equal to 5 (Gerbing and
Anderson, 1993; Tanaka, 1993).
The RMSEA represents the difference between the observed and the estimated
matrix, which recommends a value between 0.05 and 0.08 (Hair Jr. et al., 2007).
However, this study showed higher rates in some constructs, which may represent some
difficulties. Based on the analysis of the indices according to the SEM literature, it was
decided to change the model and was generated a modification report, available in
AMOSTM.
For the organizational performance construct, it was opted to exclude the OP5
variable (Table1), although it is hoped that cleaner production would improve the
quality of the goods and services offered. A strong correlation was then observed
between the improvement processes and the reduction of inputs used in production
(Getzner, 2002; Kjaerheim, 2005; Severo et al., 2012). Also, the improvement of
products and services involving other factors was evidenced, such as production
planning and management of quality assurance. With such adjustments, an increase in
the rates of NFI, GFI, AGFI and CFI was obtained, which justifies such change,
although it does not invalidate the initial model since no change in the Chi-square were
noticed in the final model and in the RMSEA.
After the completion of the Confirmatory Factor Analysis (validation of the
constructs), the integrated model was evaluated, which aggregates the measurement
model and the structural model in order to evaluate the relationships between the
constructs (cleaner production, environmental sustainability and organizational
performance) and the observable variables proposed in the model. Based on Kline
(1998) and Maruyama (1998), the evaluation of the model was based on the fit indices
of the model and the statistical significance of the estimated regression coefficients,
which are presented in Table 2. Table 3 shows the results of the Critical Ratio (CR) that
presents values above two, which confirms a standard Normal distribution at a 0.05
level, with a significant calculus of probability (p *), which demonstrates that there are
significant differences between the observed variables for each construct.
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comparison with the initial model. The comparative measurements of adjustment that
seek to compare the proposed model from the null model (CFI, GFI, NFI, AGFI)
indicate a good fit of the model (Blunch, 2008), which was within the recommended
(0.9) coefficient. Based on the results, the fit in the model is partly justified by the
improvement of the indices in comparison to the initial model.
Table 2
Adjusment index of the proposed model - initial and final.
cIndex Final analysis
InitialModel Final Model Chi-square 218.848 178.151 Levelofliberty 62 51 Chi-square divided by the level of liberty 3.5 3.5 Levelofprobability 0,000 0,000 KMO - Kaiser-Meyer-Olkin Measure of Sampling Adequacy 0.794 CFI - Comparative Fit Index 0.847 0.866 NFI – Normed Fit Index 0.801 0.824 GFI – Goodness of Fit Index 0.898 0.909 AGFI - Adjusted Goodness of Fit 0.850 0.860 RMSEA - Root Mean Squared Error of Approximation 0.092 0.092 Composedconfiability 0.930 0.929 Cronbach’s alpha 0.798
Table3
Hypothesis test.
Constructs Standardized coefficient
Standard Deviation
C.R. p*
Environmental Sustainability ← Cleanerproduction 0.394 0.101 3.914 *** Organizational Performance ← Cleanerproduction 0.328 0.091 3.596 ***
Organizational Performance ← Environmental Sustainability
0.424 0.073 5.827 ***
(***) < 0,001
A result analysis shows that all hypotheses (H1, H2 and H3) were confirmed
(Fig. 3). It was also observed that the implementation of cleaner production strategies
had an impact on environmental sustainability in the companies of the AMMC of Serra
Gaúcha, (H1), which reinforces the assertions of Fresner (1998), Geiser (2001), Dunn
and Bush (2001); Hamed and El Mahgary (2004), Baas (2007), Burritt, Herzig and
Tadeo (2009), and Severo et al. (2012). Consequently, the implementation of cleaner
production strategies reduces the use of inputs, raw materials, water and energy, which
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impact.
The second hypothesis proposes that cleaner production is positively related to
improved organizational performance. Consequently, this hypothesis was confirmed by
indicating that the cleaner production methodologies contribute to increase the capacity
and the flexibility of production; which impacts on reducing production costs and
improving some aspects of health and work safety. Such confirmation corroborates with
the findings of Zwetsloot (1995), Kolk and Mauser, 2002; Getzner (2002), Kjaerheim
(2005), Zeng et al. (2010), and Severo et al. (2012), which demonstrates the relative
influence of cleaner production on company’s performance.
The third hypothesis (H3) proposes that environmental sustainability is
positively related to organizational performance. This hypothesis was also supported
through the indices that confirm the hypothesis. Consequently, this study corroborates
with the researches that identified the influence of environmental sustainability on the
superior performance of the organization (Halkos and Evangelinos, 2002; Kassinis and
Soteriou, 2003; Molina-Azorin et al., 2009; Lin, Tan and Gen, 2012). It is important to
note that the companies of the AMMC of Serra Gaúcha tend to work with
environmental sustainability and are committed to the welfare of workers, society and
the environment.
Fig. 3.Final Research model.
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that represents an important source of wealth for the southern region of Brazil. In a
context of high competitiveness, the AMMC members seek alternative strategies to
reduce their costs and to contribute to their image with their customers. Furthermore,
the practices related to environmental sustainability, such as cleaner production, have
become common strategies among those local manufacturers. Consequently, this survey
has identified a strong relationship between Cleaner Production, environmental
sustainability and organizational performance in the AMMC companies of Serra
Gaúcha.
From the literature and the data collected, were used the SEM to test the
hypotheses in order to obtain a statistically reliable and robust analysis. In terms of
method, the SEM presented an appropriate method to analyze the responses and to
validate the scales used in this study. The measurable indicators (observables) of cleaner
production were composed of questions that could assess the expected results in the
implementation of a cleaner production strategy. It was observed that the average
responses of the cleaner production construct stood at 3.97, which shows a high level of
benefits in the sample companies and positive results from the implementation of this
improvement method.
The responses on the construct of environmental sustainability, about the issues
of organizational guidelines and internal processes, had an average of 3.66. It reveals a
sample represented by organizations that act preventively in environmental
improvement. The construct of organizational performance showed an average of 4.30
in its responses, representing that there are other reasons influencing performance; other
than cleaner production and environmental sustainability, since product innovations, as
well as economic conditions in domestic and international markets, directly influence
the performance of an organization.
In this context, the hypotheses were tested and confirmed by the SEM process,
contributing to the consolidation of several theories that supported the assumptions
described in this study. The first Hypothesis, which states that cleaner production is
positively related to environmental sustainability, was supported in the study with a
standardized coefficient of 0.394 and corroborates the results of other studies (Geiser,
2001; Baas, 2007; Severo et al., 2012) who state about such correlation. Consequently,
this study demonstrates that cleaner production can significantly generate environmental
benefits and contribute to the generation of environmental practices. regardless of
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as equivalent in both large companies as in micro and small.
From the sequence of the proposed model (Fig. 2), the second hypothesis was
supported with a standardized coefficient of 0.328, which states that cleaner production
is positively related to improved organizational performance. Furthermore, it
demonstrated the surveyed companies that have a cleaner production methodology
show a superior performance in comparison to companies that do not have such
methodology, regardless of company size, based on an equivalent statistically positive
relationship that occurs both in large companies as in micro and small companies. This
study corroborates a correlation already established by the work of Zwetsloot (1995)
Getzner (2002), Kjaerheim (2005), Burritt, Herzig and Tadeo(2009) and Zeng et al.
(2010), which all postulate the existence of a positive impact of Cleaner Production on
business outcomes, improving their competitiveness.
The third hypothesis postulates that environmental sustainability is positively
related to organizational performance. It was supported by the study with a standardized
coefficient of 0.424 and follows the lines of research of Halkos and Evangelinos (2002),
Kassinis and Soteriou (2003), Molina-Azorin et al. (2009) and Lin, Tan and Gen
(2012); who conducted studies highlighting that environmental sustainability can lead to
cost reductions. Costs optimizations are related to materials, energy, water and waste
reductions, which has a direct impact on business costs as well as environmental
sustainability. It may also improve a company’s image in a community and market,
promoting the acquisition of new customers who value respect for the environment.
The research findings enabled, in one hand, the testing and the validation of the
metrics for the constructs on cleaner production, environmental sustainability and
organizational performance. On the other hand, it allowed to study environmental
practices and to relate them to company performance. For academic researchers, it
defined new metrics that are not linked to financial indicators, because many companies
in Brazil, especially the small and medium-sized, do not allow the disclosure of
financial information.
In addition to the objectives of this study, the research showed that all small,
medium and large companies perform environmental practices to comply with the
legislation and to improve their image with customers. It is noticed that most companies
have not yet realized the economic and financial potential of cleaner production
strategies, as well as other environmental practices. A lack of strategic vision on
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constitutes a threat to these companies.
Another contribution of the study is the data aggregation on cleaner production,
within companies of different sizes, which still represents an incipient contribution to
the literature (Hamed and El Mahgary, 2004; Burritt, Herzig and Tadeo, 2009). It also
reaffirms that the organizations are moving towards environmental sustainability by
coercive and normative pressures.
5. Conclusion
The main contribution of this study remains in the elaboration of a scale that
clearly and efficiently expresses the constructs of cleaner production, environmental
sustainability and performance. This scale, combined with the current model of this
study (Fig. 3), emerges as a framework suitable for empirical studies that can measure
the contributions and relationships between these constructs. Still, other variables could
be added, like market behaviour (stability or instability of the market) as well as factors
such as government policies; assuming that they directly affect the provision for
companies to assume environmental practices, considering that some sectors have more
demanding standards than others.
Another important aspect of this research in terms of findings are the recurrent
local factors, or the endogenous aspects of the region related to environmental
management, which shows that the high rate of entrepreneurship or the size of the
companies do not directly impact on the environment output of the organization, raising
the conclusion that organizational performance is a result of the direct application of
environmental practices (environmental sustainability), mainly through cleaner
production practices. Those finding have managerial implications that can motivate
organizations to undertake cleaner production and environmental sustainability in
search of better performance results. In more general terms, the findings of this research
contribute to science as new evidence that environmental practices have positive
impacts on the economy.
Although the study was conducted in a sample 11.5% of the population of the
companies of the Serra Gaúcha AMMC, it only reflects the perception of the
respondents of the surveyed companies, which does stimulates the realization of future
studies. Consequently, it demonstrates a real need for further longitudinal researches
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from different industrial sectors.
The results also demonstrate that the choice of CP program and environmental
actions that company managers conduct in relation to organizational performance is
related to their own interpretation of the external demands for environmental
sustainability, either as opportunities or threats, or either related to the welfare of their
employees and the importance to minimize production costs. However, there is a
tendency that managers systematically seek to reduce costs, to comply with legislation
and to respond to the demands of a market that values environmental issues. In this
sense, Brazilian organisations can still contribute a lot to sustainable development, not
only by adapting sustainability policies, but by sticking to the introduction of
environmental practices and CP program, aimed at increasing competitiveness and
business performance.
This study presents some methodological limitations, which are important to
highlight in complementing the proper understanding of the results. The most obvious
limitation is related to the sample technique used (non-probabilistic), so the results can
only be assessed from the perspective of the considered sample. Finally, for future
studies, it is suggested that new data collections be made with other samples, to increase
the ability to analyze the phenomenon, and to contribute to the academic and the
business process management, in making more strategic decisions related to cleaner
production.
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An empirical study in Brazil on cleaner production.
A structural equation modelling process applied to cleaner production.
Contributions of cleaner production on organizational performance.