Purpose – The purpose of this paper is to assess the impact of competitive market environments on the firm’s decision to adopt green supply chain management (GSCM) practices, while checking to see if the firm’s commitment to particular types of GSCM practices improves its performance. Design/methodology/approach – To confirm a positive link between the firm’s GSCM practices to its performance, the authors collected the data from 322 Korean firms via questionnaire surveys and then analyzed these data using the structural equation model. Findings – Among various types of GSCM practices, green purchasing has the greatest impact on both manufacturing and marketing performances. Also, internal environmental management positively influenced both manufacturing and marketing performances, whereas cooperation with customers and reverse logistics had no significant impact on the firm’s manufacturing and marketing performances. Originality/value – To provide a practical advice for firms which are hesitant to embrace green supply chain practices due to skeptical views about their true managerial benefits, this paper discerned more effective GSCM practices from less effective GSCM practices. In so doing, this paper is one of the few studies which pinpointed what types of specific GSCM practices are most effective in enhancing firm performance.

Introduction

Over the last decade, the planet earth has suffered from an unusual cycle of unprecedented heat waves, cold spells, droughts, floods and wildfires. For example, the summer of 2012 was the warmest summer on record, whereas the winter of 2014 was the coldest winter on record for the USA. Similarly, Australia, Japan, Korea, China and Europe experienced the record-setting heat waves in 2013 (Sheppard, 2014). The surface air temperatures on the average so far this decade are about 0.9o C higher than they were in the 1880s ((The) Economist, 2015). Many suspect that this extreme weather pattern is a vital sign of climate changes induced by human activities. Unless reversed, some scientists believe that this pattern can eventually destroy the livelihood of all species on earth by disrupting the biodiversity and causing serious food shortages (Pimm, 2009; Safont et al., 2012). A main culprit for this concerning pattern is the emission of harmful carbon dioxide into air. Actually, the level of atmospheric carbon dioxide reached 399 parts per million in 2014, which was the highest record for 650,000 years of this planet’s history ((The) Economist, 2015; NASA, 2015). This rapid rise of a carbon dioxide level in the air contributed to human activities associated with transportation (especially, use of gasoline-powered vehicles), inventory management, waste disposal, product manufacturing and energy creation (Piecyk and McKinnon, 2010; Sundarakani et al., 2010; Hua et al., 2011). Recognizing the detrimental impact of human activities (especially industrial activities) on environmental degradation, a growing number of today’s customers have begun to appreciate the firm’s commitment to environmental friendliness (greening initiatives) more than ever before. This changed attitude of customers has prompted firms to consider leveraging their environmental friendliness as the major selling point or the customer order-winning criterion. However, the firm’s commitment to greening initiatives often create a dilemma in that the firm’s environmental friendliness rarely comes free and its payoffs are not clearly known. To handle this dilemma, a series of attempts have been made to assess the impact of greening initiatives (e.g. green supply chain practices) on the firm’s performance. The focal point of these attempts is to determine whether greening initiatives are worthy of investment and managerial focus. For example, Klassen and McLaughlin (1996) discovered a strong link between the firm’s greening initiatives and its financial performance, as measured by stock market performance. Similarly, Melnyk et al. (2003) observed that the extent/maturity of the firm’s environmental management system was directly correlated with the firm’s performance, as expressed by perceived cost saving, lead time reduction, product quality improvement, market position strength and corporate reputation enhancement. Later, Montabon et al. (2007) confirmed that the firm’s environmental management practices such as remanufacturing, environment-friendly product design and surveillance of the market for environmental innovation were positively associated with the firm’s performance, as expressed by sales growth and return on investment (ROI). A plethora of other studies including the ones conducted by Florida (1996), Berry and Rondinelli (1998), Claver et al. (2007), Yang et al. (2011), Schrettle et al. (2014) and Tseng et al. (2015) verified a causal relationship between the firm’s environmental management practices and its performance.