Human resource and customer benefits through sustainable operations

Abstract

Purpose Sustainable operations are increasingly part of firms’ competitive strategies. Research widely investigates the relationship between sustainable operations and competitive advantage, considering financial performance as a dependent variable, and shows controversial results. The purpose of this paper is to operationalize competitive advantage as internal and external intangible benefits, such as human resource (HR) and customer benefits. HR benefits concern the deployment of a workforce pursuing a firm’s goals and strategy; customer benefits concern the improvement of a firm’s relationship with its customers. Design/methodology/approach Empirical results are provided in an analysis of data from a survey conducted on a sample of 107 Italian firms in the food industry. A single industry and country are selected to avoid possible differences in regulations and in operations processes. Structural equation modelling is used to test hypotheses relating sustainable operations to HR and customer benefits. Findings The authors distinguish between green and social operations practices. Green operations practices directly impact customer benefits but not HR benefits. Social sustainable operations practices do not directly impact customer benefits but instead have a direct impact on HR benefits. Hence, through HR benefits, they have an indirect impact on customer benefits. Practical implications The authors provide results showing to operations managers that both green operations and social operations are crucial to obtaining customer benefits. Social operations do this by enhancing HR benefits. Green operations instead are not positively related to HR benefits. Originality/value This research serves as an original contribution to the sustainable operations literature in two ways. First, from a resource-based perspective, the relationship between sustainable operations, HR benefits, and customer benefits is proposed and tested. Such benefits are also shown to be interrelated based on the service profit chain model. Second, green and social operations practices are analysed separately providing a nuanced view of benefits related to sustainable operations.