Effect of Adopting Green Supply Chain Management Practices on Performance of Manufacturing Firms: the Case of Building, Mining and Construction Sector in Kenya

Abstract

Traditionally firms had been concerned about their financial performance since the key aim was ensuring a return on the investment made by shareholders. However, the growth of social and environmental concern has led firms to become answerable to other stakeholders who are interested in understanding firms’ approach towards managing sustainability and environmental issues. This concerns have necessitated firms to initiate programs in Green Supply Chain Management (GSCM) practices. This study aimed to establish the effect of adopting GSCM practices on performance of manufacturing firms within the building, mining and construction (BMC)sector in Kenya by identifying to what extent firms have adopted GSCM practices and determining what has been the effect of them adopting the GSCM practices on their performance. The research incorporated descriptive survey design targeting 54 firms who are members of Kenya Association of Manufacturers (KAM). The primary tool of data collection used was by means of a semi-structured questionnaire which had a 5 point Likert scale structure. The data diagnostics test showed that the data followed the normal distribution and was valid for analysis. SPSS was used to analyze the quantitative data and the results were presented in tables. The data was processed using multivariate analysis using Likert scale. A regression model showed the relationship between the study variables. It was deduced that GSCM practices have a statistically significant effect on firm performance. The data showed that the extent of adoption of GSCM practices was moderate and there was a positive correlation between GSCM practices and firm performance. The study recommends that firms in the BMC sector in Kenya should adopt GSCM to positively influence their firm’s performance. The study also recommends a review of how green procurement is implemented to avoid its adoption which showed a negative impact in relation to firm performance.