The role of green management in creating sustainability performance on the small and medium enterprises

Abstract

Purpose The purpose of this paper is to analyze the effect of the relationship between stakeholder demand, resources, knowledge and product uniqueness on green marketing and its implication on sustainability performance. Design/methodology/approach This study used a quantitative research approach that explains the phenomenon by collecting numerical data analyzed using mathematically based methods. The research location was Batik Lawean Center of Surakarta, which is the centers of Batik industry and heritage. These locations were chosen because Laweyan and Kedung Baruk have a vision as the center of Batik industry and environment-friendly heritage through sustainable development. Findings Stakeholder demand, resource, knowledge and the uniqueness of the product have a significant effect on the application of green management, and the green management has a significant effect on the sustainability performance. It means that the stakeholder demand, resources, knowledge and product uniqueness have a significant effect on green management, and green management simultaneously shows a significant effect on sustainability performance. The application of green management will also improve sustainability performance. Originality/value The originality of this study is on the testing of simultaneous relationships between the factors making up the application of green marketing, namely stakeholder demand, resources, knowledge and product uniqueness, as well as the impact of green marketing implementation on sustainability performance. This study focuses on the application of green management by involving the measurement of environmental performance and financial performance, as has been investigated by Karagiorgos (2010) and Earnhart and Lizal (2006). On the other hand, this study attempts to review the application of green management in the form of environmental performance as studied by Filbeck and Gorman (2004) and Sarah and Peter (2000), which reveal several determinants of environmental performance, as suggested by Mutamimah and Handoko (2011). However, this study focuses on the qualitative determinants that have been found by researchers (Raharjo, 2016) that the low or high level of green management application is determined by the demand of stakeholders, resources, knowledge, and product uniqueness considering the object of research is the Batik industry, which is certainly different from other industries, such as those that have been investigated by Karagiorgos (2010), Earnhart and Lizal (2006), Mutamimah and Handoko (2011), Filbeck and Gorman (2004), and Sarah and Peter (2000). This study also combines the measurement of financial performance and non-financial performance in the form of sustainability performance variables.