Sustainable Operations Management Practices, Firm Characteristics, Performance and Competitive Advantage of Manufacturing Firms in Kenya

Abstract

Sustainable operations management practices (SOMPs) are strategies, actions and techniques that support operational policies in achieving environmental, social and economic objectives. Company’s operations management decisions form part of the key contributors to the anthropogenic impact on the ecosystem. Therefore, SOMPs potentially play a critical role in contribution of solutions for challenges faced by humanity. Despite its importance, it has not yet fused into the mainstream of operations management research and there are concerns on whether implementation of sustainable practices will actually afford a firm competitive advantage. It is for this reason that this study proposed to examine the effect of sustainable operations management practices (SOMPs), firm characteristics and performance on competitive advantage of manufacturing firms in Kenya. To achieve the objective, four hypotheses were formulated; SOMPs have no significant influence on firm competitive advantage, Firm characteristics have no significant moderating effect on the relationship, Organizational performance has no significant mediating effect on the relationship, Joint effect of SOMPs, firm characteristics and organizational performance on firm competitive advantage is not significant. A review of studies revealed that few attempts have taken a simultaneous approach to describe the three elements of sustainability. In explaining the link between environmental management and firm competitiveness, little is known about the mediating and moderating influence of organization performance and firm characteristics on the link between the two variables. Further, the assessment of the probable direct relation between environmental consciousness and firm competitiveness in writing has resulted in mixed outcomes. Whereas various studies have found a positive connection, some do not make out a positive relationship. The study adopted positivist philosophy to the development of knowledge and used a cross sectional survey research design. The study population consisted of all manufacturing firms registered with the KAM (903). Slovin’s formula was used to calculate the size of the sample (277), but to cater for non – response, a sample of 300 was used. Primary data was collected using a designed questionnaire. Validity and reliability were also tested and finally data was analyzed using covariance-based structural equation modeling. There were three anchoring theories: TPF, NRBV and OST. The findings were in consistent with arguments of the various theories hence the study extended to conceptual and empirical research in the area related to SOMPs. From the objectives, the results showed that SOMPs have significant influence on the firm’s competitive advantage. Based on the second objective, only one variable (age) was found to have a significant moderating influence on the relationship between SOMPs and competitive advantage. Thirdly, the findings showed that organizational performance has a significant mediating effect on the relationship between the two variables. Lastly, the findings showed that all the relationships for the joint effect were not significant except for the mediating effects of organizational performance between the two variables. The main conclusion was that SOMPs lead to minimized operating costs, enhanced satisfaction of employees and environmental improvements leading to competitive advantage. The study recommends implementation of SOMPs by manufacturing firms since it comes with possible advantages such as unceasing improvement on capital productivity, business performance enhancement in addition to competitive edge. The findings are relevant to the advancement of environmental policy and practice. This study also adds to knowledge in the less explored field of SOMPs by providing theoretical underpinning, conceptual and methodological references that can be used by academicians for pursuing future studies.