Sustainable Supply Chain Practices and Operational Efficiency of Commercial Banks in Kenya

Abstract

Becoming more responsible and accountable towards the environment and society is a major problem that businesses of all sizes and industries face. It is widely acknowledged that businesses need to take sustainability into account while running their operations and managing their supply networks. The paper aimed at investigating the impact of sustainable supply chains on operational efficiency of commercial banks in Kenya. The specific objectives were to determine the adoption level of sustainable supply chain practices and to ascertain the association amongst sustainable supply chains and operational efficiency of commercial banks in Kenya. The study adopted descriptive research design and the population was made up of all the 43 licensed commercial banks in Kenya. Primary data was acquired via questionnaires which were administered via Google forms on e-mails. While descriptive statistics was used to examine the adoption level of sustainable supply chain practices, regression analysis was used to determine the association between sustainable supply chains and operational efficiency of Kenyan commercial banks. On the adoption extent of sustainable supply chain practices, the findings indicated that the sustainable procurement, sustainable innovations, corporate social responsibility, sustainable risk management and sustainable financing were moderately adopted. The adoption of sustainable supply chain practices was found to moderately influence cost, quality and timeliness of commercial banks. On establishing the association between sustainable supply chains and operational efficiency of commercial banks in Kenya, a mixed outcome was established. Sustainable procurement, sustainable innovations and sustainable risk management were found to have an association and to influence operational efficiency of commercial banks. Corporate social responsibility and sustainable financing were found to have no relationship and therefore did not influence operational efficiency. Commercial banks are recommended to adopt sustainable procurement, sustainable innovations and sustainable risk management to a large extent as they have been established to influence operational efficiency and yet they have been moderately adopted. The paper was contextually limited as it only covered commercial banks and left out the other banks. Forthcoming studies could explore other factors that influence operational efficiency which were never covered in the research