Proactive and Reactive Approaches towards Sustainable Practices in Manufacturing Companies: Emerging Economies Perspective

Abstract

This study aims to analyse the two competing conceptual models driving the relationships of external pressure, sustainable practices, and sustainability performance. The understanding of such relationships is important in enabling manufacturers to strategically manage external pressure and engage in sustainable transition. Using a sample of 202 plants from the Sixth International Manufacturing Strategy Survey (IMSS-VI), this research tests two hypotheses: (1) the role of sustainable practices in mediating the relationship between external pressure and environmental and social performance, and (2) the role of external pressure in moderating the link between sustainable practices and environmental and social performance. These hypotheses are tested through the hierarchical regression analysis and bootstrapping method. The findings show the mediating role of sustainable practices in the relationship between external pressure and environmental performance, suggesting a reactive approach to environmentally oriented sustainable practices adoption. Furthermore, the results show the moderating role of external pressure on the relationship between sustainable practices and social performance, indicating that plants take a proactive approach to the adoption of socially oriented sustainable practices for improving social performance of the buying firms, whereas there is no moderating effect for environmental performance. Studies addressing the relationships between external pressure, sustainable practices, and sustainability performance in the context of emerging economies (China and India) are limited, so there is a need to address these relationships in this context for generalisation. Studies that address the sustainability outcomes consisting of both environmental and social performance of the reactive and proactive approaches to sustainability initiatives in emerging economies are lacking. This research adds to the literature by investigating the sustainability outcomes of reactive and proactive methods in two emerging countries, China and India. The distinction between reactive and proactive approaches has important implications for sustainability performance in the context of emerging economies, as the rapid growth of these economies raises a number of sustainability issues.