Supply chain sustainability performance measurement of small and medium sized enterprises using structural equation mode
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Supply chain sustainability performance measurement of small and medium sized enterprises using structural equation modeling Chrisovalantis Malesios1
· Prasanta K. Dey1 · Fuad Ben Abdelaziz2
© The Author(s) 2018
Abstract Sustainability of small and medium sized enterprises (SMEs) is significant as SMEs contribute to GDP substantially in every economy. This research develops an innovative sustainable supply chain performance measurement model for SMEs. Prior researches predominantly use balanced score card (BSC) approach that presume causal relationship of criteria and Data Envelopment Analysis (DEA), which derive efficiency of units from a few input and output criteria. While DEA is effective for policymakers, BSC is more suitable for individual SME. The proposed method that uses structural equation modeling (SEM) approach to derive the relationship of criteria and criteria weights formulates regressiontype models for a specific region as well as for specific SME. The SEM-based supply chain sustainability performance measurement model is beneficial to policymakers as they can determine means for improvement at a regional level. The proposed method could also facilitate managers/owners of individual SMEs with measures for improving their supply chain sustainability performance. The method has been applied to three varied geographical locations in the UK, France and India in order to demonstrate its effectiveness. Keywords Structural equation modeling (SEM) · SMEs · Supply chain · Sustainability · Performance measurement · The UK · France and India
1 Introduction In comparison to large companies, SMEs have a tendency to be less engaged with environmental management practices and performance, and reduce environmental impact so that green supply chain, waste reduction and low carbon development can be achieved. SMEs are much less likely to have sustainability goals and practices in place (Johnson and Schaltegger 2016). The barriers for SMEs is that environmental measures are typically thought of as expensive, even when cost reduction benefits are highlighted to them (Petts et al. 1998;
B
Chrisovalantis Malesios [email protected]
1
Aston University, Birmingham, UK
2
Neoma Business School, Rouen, France
123
Annals of Operations Research
Simpson et al. 2004). Furthermore, a large proportion of SMEs are unaware of environmental practices and that good sustainability can improve operational efficiencies, reduce costs and risks and provide new opportunities (Ammenberg and Hjelm 2003; Nejati et al. 2016; Roxas et al. 2016). SMEs often lack resources, finances, time and knowledge to implement environmental improvement measures. In comparison, it is easier for larger businesses to invest in corporate social responsibility (CSR) and their long term benefits. Most of all the lack of availability of a standard system for measuring and enhancing sustainability of SMEs increases the problem. SMEs often believe that their firm does not have significant impact on the natural and social environment (Masurel 2007). In
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