SUSTAINABLE MANUFACTURING PRACTICES IN MICRO, SMALL, MEDIUM ENTERPRISES (MSMEs): EVIDENCE FROM INDONESIA

Abstract

This study aims to examine the drivers of sustainable manufacturing practices (SMP) using the Strategy, Technology, Organisation, People and Environment (STOPE) framework and whether those practices affect competitive capabilities (costs, quality, delivery and flexibility) amongst micro, small and medium enterprises (MSMEs) in Indonesia. Data was collected through face-to-face or in-person surveys of 169 MSMEs and validated using Structural Equation Model with Partial Least Squares approach. Our findings partially demonstrate similar results to the existing literature. We found that organisation is the only significant positive influence of SMP amongst the STOPE variables while SMP positively correlates with all competitive capabilities. This study contributes to SME nascent literature on SMP by illustrating the drivers and benefits of SMP to business capability. We expect relevant parties like practitioners, regulators and accounting academics to benefit from our study implications.