Susanty 2018

Journal of Manufacturing Technology Management
The role of internal and external drivers for successful implementation of GSCM
practices
Aries Susanty, Diana Puspita Sari, Dyah Ika Rinawati, Lutfi Setiawan,
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Aries Susanty, Diana Puspita Sari, Dyah Ika Rinawati, Lutfi Setiawan, (2018) "The role of internal
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GSCM
The role of internal and practices
external drivers for successful
implementation of
GSCM practices
Aries Susanty, Diana Puspita Sari, Dyah Ika Rinawati and Received 21 July 2018
Revised 2 November 2018
Lutfi Setiawan Accepted 26 November 2018
Department of Industrial Engineering, Universitas Diponegoro,

Semarang, Indonesia
Abstract
Purpose – The purpose of this paper is twofold: first, to investigate the direct effect of internal and external
drivers on full implementation of the green supply-chain management (GSCM) practice; and second, to
investigate the direct effect of internal drivers and indirect effect of external drivers on the full
implementation of the GSCM practice.
Design/methodology/approach – The study is based on the data collected from 30 to 35 furniture small
and medium enterprises (SMEs) chosen from each surveyed region. In this case, the selected SMEs should
have been conducted some GSCM practices. So, the total number of samples used in this study is 100 SMEs.
The relationships between internal and external drivers and the success of the implementation of the GSCM
practices are analyzed using structural equation modeling.
Findings – The results of this study have revealed that internal and external drivers, which consist of
involvement, technology, financial, regulation and customer pressure, have a direct effect on early adoption of
GSCM practices. Among these drivers, technology gives the most significant effect. The results have also
shown that only financial factor has a direct effect on the full implementation of GCSCM practices, whereas
regulation and customer pressure have positive effect on the full implementation through early adoption of
GSCM practices.
Research limitations/implications – Among the limitations of this study is related to the sample that
was restricted to SMEs of furniture in three regions. The other limitation could be related to variable
involved as internal and external drivers. This study has only used involvement, technology, knowledge,
financial, and regulation and customer pressure as the antecedent variables of early adoption of the GSCM
practices. Moreover, this study has only used the Likert scale as an approach to measure the
implementation of GSCM practice management, which could be the source of bias in expressing the level of
the implementation.
Practical implications – From the internal side of enterprises, the top management or the owner of SMEs
can develop an effective comprehensive environmental strategy. This strategy requires the top management
of SMEs show an environment oriented, allocate a specific person for implementing the GSCM practice and
learn about the current technology that can support the environmentally friendly products, and also allocate
the specific budget to support the implementation of GSCM practice. Moreover, since the study also found
that financial factor was just the only factor having a direct effect on the full implementation of GSCM
practices; therefore, the government should help the SMEs of furniture in developing low cost-GSCM
implementation techniques and also provide easiness for the SMEs to get the needed fund for implementing
the GSCM practice.
Social implications – The research has confirmed that regulation and customer pressure have the
positive and significant effect on the full implementation of GSCM practices. It may encourage the
government to make some policy related to improvement of the implementation of GSCM practice by SMEs
of wooden furniture, specifically in the Central Java Province. Another implication would be to encourage
the customer to make purchasing oriented decision for the implementation of GSCM practices by the SMEs
of wooden furniture.
Originality/value – This study contributes to the literature of GSCM by combining the critical factors of
implementation of GSCM practices toward internal and external drivers and empirically testing the direct and
indirect impacts on the level of adoption of GSCM practices. Journal of Manufacturing
Technology Management
Keywords Supply chain management, Small- and medium-sized enterprises, Furniture industry © Emerald Publishing Limited
1741-038X
Paper type Research paper DOI 10.1108/JMTM-07-2018-0217
JMTM 1. Introduction
As environmental resources are increasingly depleted, the conflict between economic
growth and environmental protection has received more significant attention from scholars
of supply chain management (SCM) (Zhu et al., 2008; Zhu et al., 2010; Ala-Harja and Helo,
2015). Traditionally, SCM can be defined as a network of facilities and distribution options
that performs the functions of procurement of materials, the transformation of these
materials into intermediate and finished products, and the distribution of these finished
products to customers (Ganeshan and Harrison, 1995). Recently, by adding the specific goal
of minimizing the environmental impact that supplier has on the end user, the traditional
concept of SCM has turned into green supply chain management (GSCM). This concept is
strictly related to SCM and its definitions, which has added greater attention to
environmental issues. Compared with conventional SCM, GSCM mainly focuses on
implementing green development strategy while managing the external environmental
pressures as well as the internal impetus of corporate innovation (Zhao et al., 2017). There
are several definitions of GSCM. According to Zsidisin and Siferd (2001), GSCM is the set of
SCM policies held, actions taken and relationships formed in response to concerns related to
the natural environment concerning the design, acquisition, production, distribution, use,
reuse and disposal of the firm’s goods and services. Sarkis (2003) revealed that GSCM is a
new field of research concerning climate change, unsustainable consumption of natural
resources and very high rate of energy consumption. According to Srivastava (2007), GSCM
integrates environmental thinking into SCM, including product design, material sourcing
and selection, manufacturing processes, and delivery of the final products to the consumers.
The other authors have their own definitions. In particular, a GSCM strategy requires
companies to adopt environmentally friendly purchasing, including taking into
consideration the purchasing of materials that consist of less environmentally harmful
elements, the use of fewer materials and more renewable and recyclable resources
(Guang Shi et al., 2012). Overall, the purpose of GSCM is to eliminate or reduce the negative
impact on environment (air, water and land pollution) and waste from resources being used
(energy, materials and products) when the enterprise transform the raw materials up to final
use and disposal of products (Hervani et al., 2005).
Referring to Zhu et al. (2007), the implementation of GSCM practice in an enterprise can
be done in several ways. It not only depends on the character of the enterprise, but also on
the character of the supply chain. Zhu and Sarkis (2004) and Zhu et al. (2005) revealed that
the implementation of GSCM practice could be grouped into two, namely, internal GSCM
practices and external GSCM practices. Internal GSCM practice consists of internal
environmental management (IEM) and eco-design (ECO), whereas external GSCM practices
consist of green purchasing (GP), customer cooperation (CC) and investment recovery (IR).
Moreover, each dimension has several elements to be measured using five-point Likert scale
(1 ¼ not considering it, 2 ¼ planning to consider it, 3 ¼ considering it currently, 4 ¼ initiate
implementation, 5 ¼ implementing successfully (Zhu et al., 2005, 2013). In 2013, Zhu et al.
conducted a study to measure the implementation of GSCM practice among 398 Chinese
manufacturers. The result of the study indicated that the implementation of GSCM practice
by Chinese manufactures varied. On average, the implementation of internal GSCM
practices by Chinese manufacturers had scored above 3.00, and the implementation of
external GSCM practices by Chinese manufacturers had scored between 2.50 and 3.00.
The value of average score indicated that the Chinese manufacturers had been considering
implementing the internal GSCM practices that consisted of environmental management
(IEM) and ECO. The value of average score also indicated that Chinese manufacturers just
planned to consider the implementation of external GSCM practice that consisted of GP, CC,
and IR. In 2017, using the same dimension, elements and also the scale of measurement,
Susanty et al. tried to measure the implementation of GSCM practices by 142 small and
medium enterprises (SMEs) of wooden furniture industry in three regions located in Central GSCM
Java Province, Indonesia (Semarang, Jepara and Kudus). The study conducted by Susanty practices
et al. (2017) revealed that the implementation of GSCM practices among SMEs of the wooden
furniture industry also varied. Little bit different from Zhu et al. (2013), on average, the
implementation of internal GSCM practices by SME of wooden furniture located in
Semarang scored between 2.16 and 4.33 with average score of 3.16 (above 3.00), and
the implementation of external GSCM practices scored between 2.00 and 4.75 with the
average score being above 3.30. On average, the implementation of internal GSCM practices
by the SME of wooden furniture located in Kudus had scored between 2.17 and 4.13 with
average scored being 3.23, and the implementation of external GSCM practices had scored
between 2.00 and 4.20 average scored 3.52. On average, the implementation of internal
GSCM practices by the SME of wooden furniture located in Jepara scored between 2.00 and
4.88 with the average score being 3.66, and the implementation of external GSCM practices
scored between 1.00 and 4.40 with the average score being 2.64. Although, on the average,
the value of score indicated that SMEs of wooden furniture just consider the
implementation of the GSCM practice, the range of score of internal GSCM practices and
also external GSSCM practices indicated that several of SMEs are just planning to consider
implementing it, and the other SMEs have already initiated the GSCM practice. For, the
wooden furniture industry, the implementation of GSCM practices is important since this
industry produces a lot of waste in every stage of its production process. In the sawing
process, the wood waste produced reached 50.80 percent of the total raw material used,
whereas in the process of making furniture products, the total waste produced reached
60.0 percent of the total raw material used (Sutrisno, 2015). The director general of Forestry
Production Development (2009) also stated that the yield value of furniture products only
ranged from 20 to 35 percent of the volume of wood used, which means that 65–80 percent
became wood waste.
The variation in the phase of implementation of GSCM practices among the enterprises
and also among the SMEs of wooden furniture in the surveyed region has raised a question
about the critical success factors or drivers or antecedent or pressures that make some
enterprises or SMEs better in achieving the phase of implementation than the others.
A number of critical success factors or drivers or antecedents or pressures such as
commitment of management, economic concerns, knowledge, international environment
agreements, domestic legislations, social responsibility and stakeholder pressures have been
suggested by some authors providing a better understanding of the motivational elements
that lead the enterprises to perform green activities (see Agi and Nishant, 2017; Beamon,
1999; Carter et al., 2000; Diabat and Govindan, 2011; Dubey et al., 2017; Govindan et al., 2014;
Hervani et al., 2005; Huang et al., 2015; Hu and Hsu, 2010; Lin and Ho, 2008; Liu et al., 2012;
Luthra et al., 2014; Sarkis, 1998, 2003; Trowbridge, 2001; Walker et al., 2008; Walton et al.,
1998; Vanalle et al., 2017). Some of those authors have significantly differentiated the critical
success factors or drivers or antecedents or pressures into two, namely, internal and
external drivers (see Trowbridge, 2001; Walker et al., 2008; Liu et al., 2012; Huang et al., 2015;
Agi and Nishant, 2017), whereas the other authors do not significantly differentiate the
critical success factors or drivers or antecedents or pressures as internal and external
drivers (see Bowen et al., 2001; Hu and Hsu, 2010; Luthra et al., 2014; Diabat and Govindan,
2011; Govindan et al., 2014; Dubey et al., 2017; Vanalle et al., 2017). Instead of blending all of
the factors into one group, this research prefers to differentiate all the factors into two
groups because each group of drivers may have a different significant role in leading the
enterprise to perform green initiative. Based on an explorative study of seven different
private and public sector organizations in the UK, Walker et al. (2008) found that the
organizations seem to be more influenced by external rather than internal drivers. Moreover,
Liu et al. (2012) also found that the internal factors have a function as intermediate variables
JMTM of external pressures in influencing the level of implementation of GSCM practices. Analysis
of the role of these groups of the driver will be helpful in developing a better understanding
of issues related to the achievement of implementation of GSCM in SMEs of wooden
furniture so the government can design the appropriate policies to improve the
implementation of GSCM practices. Shortly, in order to identify the role of each group of
driver to help the SMEs in wooden furniture perform green initiatives and also related to the
several phases of implementation of GSCM as mentioned by Zhu et al. (2005) and Zhu et al.
(2013) ( from not considering until fully implementation), this study have some purposes:
(1) This study aims to investigate the direct effect of the internal and external drivers
on the higher phase of implementation of GSCM practice, i.e. successfully
implementation of the GSCM practice or full implementation of the GSCM practices.
(2) This study aims to investigate the direct effect of internal and external drivers on the
lower phase of the implementation of GSCM practices (early adoption phase), direct
effect of the lower phase on the higher phase of implementation of GSCM practice, and
indirect effect of external drivers on the higher phase of implementation of GSCM

practice ( full implementation of GSCM practices). In this case, the external drivers will
lead the wooden furniture enterprise to perform higher phase of the implementation of
GSCM practices through the lower phase of it.
Related to the object of the study, there were several previous studies about Indonesian
wooden furniture industries, such as Widodo et al. (2010), Adi et al. (2017) and Masuda
(2017). The study conducted by Widodo et al. (2010) aims to predict and describe the
sustainability of Indonesian furniture development by considering three aspects: economical
revenue, social and environment, as the main aspects in a sustainable supply chain. Study
conducted by Adi et al. (2017) aims to find the most important wood products that hold a
significant value to the Indonesian economy. Last, study conducted by Masuda (2017) aims
to estimate the influence of current EU policy, i.e. the EU Forest Law Enforcement
Governance and Trade Action Plan (EU FLEGT AP) and the voluntary partnership
agreement (VPA) to furniture value chain. Among the three previous studies, this study has
a little intersection with the research conducted by Masuda (2017), since one of hypotheses
proposed in this study is the effect of regulation as external driver on the implementation of
GSCM practices. However, Masuda is more directed toward strategy formulation for
small-scale furniture industry to face VPA negotiations and implement System Verifikasi
Legalitas Kayu that have been a significant burden for small-scale businesses in Indonesia,
whereas this study is more directed toward seeing the influence of internal and external
drivers on the implementation of GSCM practices.
This paper is organized as follows. Section 2 discusses some factors related to internal
and external drivers that have been proposed by several authors. Moreover, the hypothesis
and also the conceptual model will be presented in Section 2. The research context of
Indonesia’s furniture wooden industry, the sample of research, instrument, and
measurement and data analysis tool is presented in Section 3. Section 4 discusses and
explains the characteristic of respondents, the result of measurement test, the result of the
structural model assessment, and the result of hypothesis testing. Conclusion, limitation of
this research and also specific directions for future research are presented in Section 5.
2. Literature review
In order to identify and group the potential success factors of GSCM practices in SMEs and
to formulate hypotheses about the causal relationship between those factors that belongs to
internal or external drivers and the success of implementation of GSCM practices,
a literature review of several journals was conducted. The result can be seen in the Table I.
Potential success factors

of GSCM practices Description and authors
Organizational factors or internal factors

Risk management Companies are seeking to implement GSCM practices to manage risk arising from environment, health and safety (Trowbridge, 2001),
manage economic risk (Walker et al., 2008) and establish an environmental risk management system for GSCM (Hu and Hsu, 2010)
Supplier management Collaborative practices with supplier, such as work with supplier to minimize environmental impacts (Trowbridge, 2001), educate
the supplier with regard to environmental issues and involve suppliers during the product development phase (Soo Wee and Quazi,
2005) enhance the commitment of SC members toward greening projects and support the implementation of GSCM practices.
Companies also seeks to implement GSCM practices to manage environmental collaboration with primary suppliers (Walker et al.,
2008; Diabat and Govindan, 2011; Huang et al., 2015; Agi and Nishant, 2017; Dubey et al., 2017), eco-literacy amongst supply chain
partners (Mudgal et al., 2009), conduct an environmental auditing for suppliers, get compliance statement from supplier, get product
testing report from supplier, conduct the collaborative R&D with suppliers, conduct the supplier evaluation and selection (Hu and
Hsu, 2010), certificate the suppliers’ environmental management system (Diabat and Govindan, 2011), involve suppliers and vendors
in green practice, conduct a training programs of suppliers and vendors, conduct a technology transfer to suppliers and vendors
(Luthra et al., 2014), measure/monitor the environmental practices of suppliers, commitment of supplier to exchange the information
(Govindan et al., 2014), improve in designing green products with suppliers, improve in products green packaging with suppliers
(Huang et al., 2015), and conduct the environmental partnership with suppliers (Vanalle et al., 2017)
Top management In order to enhance the commitment toward the implementation of GSCM practices, top management at the company should recognize
commitment the importance of environmental issues in the supply chain (Hu and Hsu, 2010). The commitment of the company’s top management
toward implementing GSCM practices can be seen from their support and participation in environmental projects and also from their
moral and social responsibility to the environment (Soo Wee and Quazi, 2005; Liu et al., 2012; Mohanty and Prakash, 2013; Agan et al.,
2013; Govindan et al., 2014; Huang et al., 2015; Agi and Nishant, 2017), their attitude (Lin and Ho, 2008), their extensive value to improve
the position of the company toward GSCM practices (Walker et al., 2008), their environmental concerns of the business activities of the
enterprises (Mudgal et al., 2009), their initiative, commitment and supportive to the company policies toward GSCM (Luthra et al., 2014),
their clarity over strategic-level policy and coordination of the strategic level team (Dubey et al., 2017), and their clarity over enterprise’s
environmental mission (Vanalle et al., 2017)
Total involvement of Implementing GSCM practices requires employees to support and handle environmental problems, and are actively involved in the
employees process of determining environmental goals management (Soo Wee and Quazi, 2005; Lin, and Ho, 2008; Walker et al., 2008; Hu and Hsu,
2010; Luthra et al., 2014; Huang et al., 2015; Agi and Nishant, 2017)
Training or knowledge The involvement of the employee could be achieved more efficiently when the employees get education and training to increase their
environmental awareness and capabilities (Soo Wee and Quazi 2005; Lin and Ho, 2008; Hu and Hsu, 2010; Luthra et al., 2014; Agi and
Nishant, 2017). The implementation of GSCM could also be achieved more efficiently when the companies have technical expertise,
(continued )
practices
GSCM
Table I.
Influential factors
GSCM practices
on implementing
Table I.
JMTM

professionals exposed to green systems, professionals exposed to green systems, environmental knowledge, perception of
“responsibility” zone, belief about environmental benefits and awareness about reverse logistics (Govindan et al., 2014)
Technology The successful of implementation of GSCM practices will depend on the availability of new technology, materials and processes, clean
technology, the degrees that the technology can be transferred and codified, and the degrees of fitness of related technologies a firm
that possessed (Lin and Ho, 2008; Mudgal et al., 2009; Luthra et al., 2014; Govindan et al., 2014). The successful of implementation of
GSCM practices will also depend on a minimum level of technological capacities that allow them to assess and improve the effect of
their products on the environment through their whole life cycle (Agi and Nishant, 2017).
Information management Developing an effective information management system to collect and maintain environmental information, information on products
and components provided by suppliers and inter-department co-operation in communication are positively correlated with the success
in implementing GSCM practices (Lin and Ho, 2008; Hu and Hsu, 2010; Luthra et al., 2014; Agi and Nishant, 2017; Dubey et al., 2017)
Economic interest/ Past research suggests that implementing the GSCM practices is driven by a number of economic interest or financial reasons such as
financial factor desire to focus on cost reductions, specific financial and operational benefits, high cost for hazardous waste disposal, availability of
bank loans to encourage green products/processes, and the value of investments and return-on-investments (Walker et al., 2008;
Mudgal et al., 2009; Agan et al., 2013; Govindan et al., 2014; Dubey et al., 2017; Vanalle et al., 2017). The implementation of GSCM
practice also depend on the specialized budget for green products development, environmental improvement, and pollution preventive
(Huang et al., 2015)
Green product/green Implementing GSCM practices is driven by green product/process design which can reduce the negative environmental impact,
design develop eco-labeling product, and include green issue into new product development (Soo Wee and Quazi, 2005; Mudgal et al., 2009; Hu
and Hsu, 2010; Agan et al., 2013; Dubey et al., 2017)
Environmental Environmental audits carried out periodically, certification to ISO: 1400, proper workplace management, green procurement
management system practices, reverse logistics practices, availability of bill of materials (BOM) represents a single product or assembly, or a group of
products, which can be used to recognize the restricted substances in all materials and components in the final product, efficient
strategic planning, effective environmental measures, and green warehousing are several environmental management systems that
can enhance the implementation of GSCM practices by the companies (Soo Wee and Quazi, 2005; Mudgal et al., 2009; Diabat and
Govindan, 2011; Luthra et al., 2014; Govindan et al., 2014; Agi and Nishant, 2017; Dubey et al., 2017)
Firm performance Implementing greening initiatives and practices are driven by the company’s desire to get good image as a pioneer in environmental,
health and safety program, green innovation (Trowbridge, 2001; Mudgal et al., 2009; Agan et al., 2013). The companies also want to
get competiveness, green marks and green trade mark through implementing the GSCM practices (Govindan et al., 2014; Huang
et al., 2015)
(continued )

Non-organizational factors or external factors

Customer pressure Customer plays important role on the implementation of GSCM practice because they can requests for more specific content, encourage
the companies to conduct green practices, exert pressure on companies to engage in environmental supply chain practices, and they
can also satisfied through environmental performance (Trowbridge, 2001; Lin, and Ho, 2008; Walker et al., 2008; Mudgal et al., 2009;
Agan et al., 2013; Liu et al., 2012; Mohanty and Prakash, 2013; Luthra et al., 2014; Govindan et al., 2014; Huang et al., 2015; Agi and
Nishant, 2017; Vanalle et al., 2017)
Non-government pressure Past research suggests that implementing the GSCM practices is driven by the pressure from investors, non-governmental
organizations, competitors, societal concern for protection of natural environment, moral and social responsibility, social values and
ethics, neighboring communities, international environment agreements and supply chain members’ awareness, such as buyer green
supply chain practice (Trowbridge, 2001; Lee, 2008; Walker et al., 2008, Mudgal et al., 2009; Agan et al., 2013; Liu et al., 2012; Mohanty
and Prakash, 2013; Luthra et al., 2014; Huang et al., 2015; Dubey et al., 2017; Vanalle et al., 2017)
Government or regulation Government play important role on the implementation of GSCM practices through provides financial support, encourages companies
pressure to propose green logistics projects, and helps training manpower with green logistics skills (Lin and Ho 2008). Government play
important role on the implementation of GSCM practices through environmental laws and regulations within which the companies
must operate (Lee, 2008; Mudgal et al., 2009; Agan et al., 2013; Liu et al., 2012; Mohanty and Prakash, 2013; Luthra et al., 2014; Govindan
et al., 2014; Huang et al., 2015; Dubey et al., 2017; Vanalle et al., 2017)
practices
GSCM
Table I.
JMTM 3. Factors influencing GSCM practices
It is not easy to select some critical success factors that significantly influence the
implementation of GSCM practice in furniture industries. It is also not easy to draw
conclusions about critical success factors that belong to internal and internal drivers from
the previous author although Agi and Nishant (2017), Vanalle et al. (2017), Huang et al.
(2015), Liu et al. (2012), Trowbridge (2001), Walker et al. (2008) have been significantly
differentiated all of the factors into two groups. Not all the factors influencing the GSCM
practice in Table I will be used in this study. Since the object of study is SMEs, this study
prefers to select the commitment of the member of the organization (such as the leader,
middle management and employee), the capability of enterprises which relate to technology,
knowledge, and financial as the significant factors influencing the implementation of GSCM
that are included in the internal driver. There is enough indication in the literature to
propose that the performance of SMEs is essentially associated with the leadership of the
leaders (Spinelli, 2006). Leadership is required to move an organization forward among a
changing, competitive landscape by imagining, motivating, organizing, managing and
leading employees to a higher level of performance (Tucker and Russell, 2004).

Consequently, in this case, good leadership indicated by active commitment and
involvement will encourage the members of the organization and also result in the success
of SMEs in implementing the GSCM practices. Then, according to Pinget et al. (2015),
technology, knowledge, and financial are the important barriers for SME to get innovation
in environment. Moreover, this study prefers to select the pressure from regulation and
customer as the significant factors influencing the implementation of GSCM that are
included in the external driver. These two pressures almost always appear in discussions
about factors outside the organization that affect the implementation of GSCM practices.
It can be seen in Table I. Detail explanation about the effect of each factor on implementation
of GSCM practices can be seen in the next section.
3.1. The role of top management and employee on the implementation of GSCM practice
The importance of the commitment of member of organization (such as the leader, middle
management and employee) on implementation of GSCM practices can be seen in Soo Wee
and Quazi (2005), Hu and Hsu (2010), Liu et al. (2012), Mohanty and Prakash (2013),
Govindan et al. (2014), Luthra et al. (2014), Huang et al. (2015), Agi and Nishant (2017), Dubey
et al. (2017) and Vanalle et al. (2017). The literature has emphasized the importance of
commitment, particularly from top management, as a priority for supply-chain partners who
seek to implement sustainability practices (Dubey et al., 2017). The task of the top
management is setting an environmental vision or enterprise policy and establishing the
strategy to guide the enterprise’s effort to achieve their vision (Soo Wee and Quazi, 2005).
The commitment of the top management of an enterprise toward implementing GSCM
practices permits the dedication needed by the required resources for green initiatives
(Agi and Nishant, 2017). In this case, Luthra et al. (2014) found that top management
initiation and commitment is the most important critical success factor for achieving
sustainability in Indian automobile industry with a high mean value of 4.54 and the lowest
standard value of 0.576. Govindan et al. (2014) found that the lack of top management
involvement in adopting GSCM barrier has the lowest weight and ranks last among the
26 barriers. It means the commitment of top management is the last factor that certainly
required for 100 percent progress after various industries in the southern part of India are
interested in adopting GSCM and are aware of GSCM benefits. Research conducted by
Huang et al. (2015) found that Chinese manufacturing SMEs have been stimulated by the
internal drivers in terms of GSCM to some extent. As an example, SMEs from clothing,
textile and tannery sector, food and beverage sector, and plastic and robber sector have been
positively swayed by the support of their green strategy from the top and middle
management. Based on data collected from 13 practitioners and experts in a number of GSCM
companies operating in the Gulf countries, the Middle East region, research conducted by practices
Agi and Nishant (2017) confirms the results from the prior literature and recognizes a great
influence and driving power of the commitment of top management toward on
implementation of GSCM practices. Then, related to the role of employee in GSCM
practices, the commitment of top management allows also for attaining the commitment of
the employees towards environmental aspects of their activities, and encouraging the
development of an environmental culture and attitude in the enterprises. Involvement of
employees to encourage initiatives and develop methods and ideas aiming to improve the
environmental impact of the company and the SC activities was found to be strongly
associated with the success in implementing GSCM practices (Agi and Nishant, 2017).
Employee engagement in sustainability is a substantial challenge since sustainability needs
changes to practices and routines (Dubey et al., 2017). So, based on the result of the previous
research, this study proposes the following hypothesis to figure out whether the
involvement and support from management and employee have the direct influence on the
GSCM practice among furniture manufacturing SMEs:

H1. Involvement and support from management and employee have a significant
positive effect on the full implementation of GSCM practice.
3.2 The role of technology, knowledge and financial on the implementation of

GSCM practice
Capability of enterprises that related to technology/knowledge/financial can be seen in Soo
Wee and Quazi (2005), Lin and Ho (2008), Walker et al. (2008), Agan et al. (2013), Mohanty
and Prakash (2013), Govindan et al. (2014), Huang et al. (2015), Dubey et al. (2017) and
Vanalle et al. (2017). An enterprise will be unlikely to implement GSCM activities if it does
not have the necessary capacity, no matter what pressures it faces. Capabilities of
enterprises related to technology will help the enterprises to achieve both cost-effective and
environment-friendly production through developing innovative solutions to production
problems (Agi and Nishant, 2017). Related to the effect technology of GSCM practices,
Lin and Ho (2008) measure the effect of technology based on two factors, namely,
explicitness of technology and the accumulation of technology. Both technologies have a
positive effect on the intention to adopt green innovation based on the result of the survey to
162 logistics companies in Taiwan. According to Govindan et al. (2014), the technology
barrier, especially a lack of new technology, materials and processes, is the first priority
among the barrier categories for GSCM implementation in Indian industries. There are
87 companies become the object of this research.
Knowledge is one of the important factors for green practices. In the research conducted
by Govindan et al. (2014), lack of environmental knowledge becomes an important barrier
for Indian industries to implement the GSCM practice. However, the knowledge as an
important factor of green practice is often not expressed explicitly as Mohanty and Prakash
(2013), Lin and Ho (2008) and Soo Wee and Quazi (2005). In this case, instead of inserting
knowledge as one important factor on green practices, Mohanty and Prakash (2013) prefer
to use the education level of the employee and internal environmental training as the
important factor for the level of GSCM practices. Lin and Ho (2008) prefer to use the quality
of human resources as the important factor for the intention to adopt the green innovation.
The quality of human resources depends on the knowledge owned by the employee to learn
new technology, the capability to provide new ideas, the capability to use new technology to
solve the problems, and the capability to share the knowledge to the others. Moreover,
instead of inserting knowledge as the critical factor for GSCM implementation, Soo Wee and
Quazi (2005) prefer to include training as the critical factor for GSCM implementation. In this
JMTM case, Soo Wee and Quazi agreed that employee needs a knowledge and also skill to increase
their environmental awareness, fulfill their environmental responsibilities, and achieve their
environmental goals. This can be done through training. More recently, research conducted
by Agi and Nishant (2017) confirms the previous research that employees’ education and
their knowledge of environmental aspects of the company’s activities have a big influence
on the implementation of GSCM practices.
In the research conducted by Mudgal et al. (2009), Agan et al. (2013), Govindan et al.
(2014), Dubey et al. (2017) and Vanalle et al. (2017) revealed that each object under study has
a different preference about the main motivation to implement the GSCM initiatives related
to economic or financial interest. The implementation of the GSCM practices could be
motivated by a desire to focus on cost reductions, the specific financial and operational
benefits, a high cost for hazardous waste disposal, the availability of bank loans to
encourage green products/processes, and the value of investments and return-on-
investments. Moreover, the financial constraints are a dominant barrier to GSCM
implementation among Indian industries. It reveals that Indian industries are unable to
fulfill their economic needs and hence do not spend much on GSCM implementation. Lack of
finances can hinder GSCM implementation (Govindan et al., 2014). The result of research
conducted by Huang et al. (2015) revealed that the implementation of GSCM practices
among 202 surveyed SMEs in China was encouraged by the reserved costs for disposal of
hazardous materials and green product research and development, including green
packaging for the products. More recently, based on the data collected from 41 first- and
second-tier suppliers from a Brazilian automotive supply chain, the result of study
conducted by Vanalle et al. (2017) revealed that cost of environmentally friendly packaging
is the main issue influencing the studied companies to adopt GSCM.
So, based on the result of the previous research, this study proposes the following
hypotheses to figure out whether the technology, knowledge and financial factors have a
direct influence on the GSCM practice among furniture-manufacturing SMEs:
H2. Technology factors owned by the enterprises have a significant positive effect on the
full implementation of GSCM practice.
H3. Knowledge factors owned by the enterprises have a significant positive effect on the
full implementation of GSCM practice.
H4. Financial factors perceived by the enterprises have a significant positive effect on
the full implementation of GSCM practice.
3.3 The role of pressure from regulation and customer on the implementation
of GSCM practice
Pressure from regulation can be seen in Lee (2008), Mudgal et al. (2009), Agan et al. (2013),
Liu et al. (2012), Mohanty and Prakash (2013), Luthra et al. (2014), Govindan et al. (2014),
Huang et al. (2015), Dubey et al. (2017) and Vanalle et al. (2017). In this case, several
researchers, such as Lin and Ho (2008), prefer to state regulation pressure as support
from the government. The pressures from regulations can be described as self-disciplined
and set by governments or accepted organizations. In the research conducted by Huang
et al. (2015), there are differences in responses provided by SMEs from each sector to
pressure from regulation related to GSCM implementation. As an example, SMEs from
food and beverage sectors have felt deep pressures from their import countries’
environmental laws or regulations when considering GSCM, whereas SMEs from paper
making and printing sector have been under little pressures from national laws and
regulations on resource conservation. Most recently, the study conducted by Vanalle et al.
(2017) revealed that the environmental regulation from central governmental, regional
and clients’s countries have a positive significant effect on the implementation of GSCM
GSCM practices. practices
The pressure from the customer can be seen in Trowbridge (2001), Lin and Ho (2008),
Walker et al. (2008), Mudgal et al. (2009), Agan et al. (2013), Liu et al. (2012), Mohanty and
Prakash (2013), Luthra et al. (2014), Govindan et al. (2014), Huang et al. (2015), Agi and
Nishant (2017) and Vanalle et al. (2017). The pressure from the customers can be described
as increased requirements from the downstream industries nationally and internationally,
including the requisite to imports and exports (Walker et al., 2008; Huang et al., 2015). Small
companies are under significant pressures from their customers. With seven cases, Walker
et al. (2008) pointed that SMEs are more likely to be insisted by their customers to implement
GSCM practices, particularly in the industrial sectors like food, furniture, automobiles and
electronic devices. Besides, Walker et al. (2008) also verify that end consumers possess a
strong power in imposing enterprises to improve their environmental performance. More
recently, study conducted by Agi and Nishant (2017) showed that the dependence
relationships between the company and its SC partners (in this customers) seem to have a
huge influence on the implementation of GSCM practices.

So, based on the result of the previous research, this study proposes the following
hypothesis to figure out whether the regulation and customer have the direct influence on
the GSCM practice among furniture-manufacturing SMEs:
H5. Regulation pressures have a significant positive effect on the full implementation of
GSCM practice.
H6. Customer pressures have a significant positive effect on the full implementation of
GSCM practice.
Graphically, the direct relationship between internal and external drivers and full
implementation of GSCM practice, as hypothesized in H1–H6, can be seen in Figure 1.
3.4 The indirect effect of internal and external drives on the implementation of GSCM practice
Moreover, by referring to the previous research from Thøgersen et al. (2010), Zhu et al. (2005)
and Zhu et al. (2013), this study tries to develop the alternative conceptual model of the
relationship between internal and external factors and the implementation of the GSCM
practice. Different from the previous model, this alternative conceptual model has
considered the implementation phase of GSCM implementation. In the different subject of
the study, Thøgersen et al. (2010) identified two phases of adoption or implementation
process, namely, starting and completing the adoption process. This condition is in line with
Zhu et al. (2005) and Zhu et al. (2013), who have concluded that the process of
implementation of GSCM practices can be differentiated into five phases, i.e., not
Internal drivers
Involvement and support
from to management Full implementation of GSCM
and employee
practices
Technology
H1
Green Purchasing
Knowledge H2
H3 Figure 1.
Financial H4 Customer Cooperation
with environmental Conceptual model of
concern the direct relationship
H5
External drivers
H6
between internal and
Regulation pressure
Eco-design external drivers and
Investment recovery
full implementation of
Customer’s pressure GSCM practice
JMTM considering, planning to consider, considering it currently, initiate implementation and
implementing successfully. Shortly, there were three conditions to figure out in the
alternative conceptual model, i.e. the internal and external drivers have the direct effect on
early adoption of implementation of GSCM practices, the early adoption of implementation
of GSCM have the direct effect on full implementation, and the external drivers have
an indirect effect on the full implementation of GSCM practices through early adoption
rather than just having a direct effect on the full implementation which would indicate that
SMEs short-circuit the process. The hypothesis for the indirect relationship between internal
and external factors, early and full implementation of GSCM practice, can be seen below:
H7. The early adoption of implementation of GSCM practices has a significant positive
effect on the full implementation of GSCM practices.
H8. Involvement and support from management and employee have a significant
positive effect on early adoption of implementation of GSCM practices.
H9. Technology factors owned by the enterprises have a significant positive effect on
early adoption of implementation of GSCM practices.
H10. Knowledge factors owned by the enterprises have a significant positive effect on
the early adoption of implementation of GSCM practices.
H11. Financial factors perceived by the enterprises have a significant positive effect on
early adoption of implementation of GSCM practices.
H12. Regulation pressures have a significant positive effect on early adoption of
implementation of GSCM practices.
H13. Customer pressures have a significant positive effect on early adoption of
implementation of GSCM practices.
H14. Rather than just having a direct effect on the full implementation of GSCM practice,
regulation pressures have a significant positive effect on the full implementation of
GSCM practices through early adoption of GSCM practices.
H15. Rather than just having a direct effect on the full implementation of GSCM practice,
customer pressures have a significant positive effect on the full implementation of
GSCM practices through early adoption of GSCM practices.
Graphically, the relationship between internal and external drivers, early adoption of
implementation of GSCM practices, and full implementation of GSCM practice can be seen
in Figure 2.
Early adaption of the

External drivers Full implementation of
GSCM practices H14
Regulation pressure GSCM practice
H12
Internal Environmental
Figure 2. Internal drivers
Management
Conceptual model of Involvement and support from Green Purchasing Green Purchasing
the relationship management and employee H8 Customer Cooperation Customer Cooperation
H9 H7
between internal and Technology
H10
with environmental
concern
with environmental
external drivers, early Knowledge H11 concern
Eco-design
adoption of GSCM Financial Eco-design
practice and full Investment Recovery
implementation of External drivers Investment Recovery

H13
GSCM practice Customer’s pressure H15
4. Research methodology GSCM
4.1 The research context of Indonesia’s furniture wooden industry practices
This study tested our theoretical framework using a survey data collected from the
Indonesia furniture wooden industries for several reasons. First, Indonesia has a long
tradition of creative woodworking. Woodcarving has been practiced in Indonesia since
ancient times. Furniture is one of Indonesia’s four biggest non-oil and gas export.
The others are palm oil, footwear and rubber (Melati et al., 2013). Although the total value
of Indonesian furniture exports decreased by 15 percent between 2007 and 2011, the value
total value of Indonesian furniture exports increased again to $1.18bn in 2011
(Purnomo et al., 2009). In 2013, the total value of Indonesian furniture and related product
exports reached $1.80bn from $1.40bn in 2012, with the main recipient markets being
Western Europe, USA, Japan, China, Malaysia and Australia (Global Business Guide
Indonesia 2015). In 2015, Indonesia’s furniture industries accounted for just under 2
percent of worldwide furniture sales valued at $122bn (Centre for Industrial Studies) with
China and Vietnam dominating the industry with more than 50 percent of global market
share combined. Second, the furniture wooden industry in Indonesia faced the problem of
the availability of the amount of wood as the level of demands for furniture is getting
higher. The scarcity of raw materials is the heavy brunt of the wooden furniture industry.
Furniture industry processes need nearly 1m cubic meters of wood annually
(Masuda, 2017). As an example, Roda et al. (2007) estimated that a direct round wood
input to Jepara (as the biggest furniture wooden industry in Indonesia) was about 707,000
m3/year and an indirect input was about 846,000 m3/year (independent log parks and
subcontracting sawmills). The total consumption was over 1.55m m3/year. To overcome
the problem of scarcity of the raw material, slowly, various ideas in the production process
of wooden furniture that were related to the environment appeared, including the use of
different designs (environmentally design product), use of another alternative to replace
wood materials, such as second-hand wood, and also use of wood waste in the production
process. According to Sumarno et al. (2015), wood waste can be classified into two types,
namely, waste from logging and waste from wood processing industries. The fact that it is
important for wooden-furniture -manufacturing industry to use environmentally design
product and also use second-hand wood and wood waste in the production process
is in line with the GSCM practice’s approach. Third, the furniture wooden industry in
Indonesia is dominated by SMEs (Effendi and Parlinah, 2009). Based on this condition, the
implementation of GSCM practices by wooden furniture industry is not easy because the
SMEs are usually neglected to implement it. According to Van Hemel and Cramer (2002),
the SMEs usually do not recognize their task to keep the environment green, and
SMEs do not have substantial and clear information in regard to the environmental
benefits in greening their productions. Van Hemel and Cramer’s (2002) revealed that SMEs
are unable to find resolution in designing green products. Luken and Stares (2005) found
that there are barriers for SMEs suppliers to provide green materials. Perron (2005)
research has described four main barriers that hinder the adoption of GSCM among
SMEs that are informational, resource, technical and attitudinal and perceptional barriers.
Most recently, Parmar (2016) indicated that the categories of barriers affecting most the
implementation of GSCM in Indian SMEs are technology and financial barriers. So, based
on the first until the third condition, focusing on Indonesian wooden furniture industry
provides a good research setting for the study of what are the important drivers or factors
that have the positive impact on implementing the GSCM practices among the SMEs in
that industry. In this case, knowing the important drivers or factors can help the
SMEs in wooden furniture industry to face the problem related to the availability of raw
material and environment; hence, the SMEs can still have the contribution as main
Indonesia’s export.
JMTM 4.2 Sample of research
This study was conducted at three regencies in Central Java Province (Semarang, Kudus
and Jepara). Those five regions were selected based on their capacity on furniture
production. There were 249 SMEs of wooden furniture in Semarang according to
Indonesia Furniture and Handicraft Industry Association (2014); 324 SMEs of wooden
industry in Kudus according to District of Industrial, Cooperative and micro, small and
medium enterprise of Kudus region (2012), and 8,080 SMEs of wooden furniture in Jepara
according to Irawati and Purnomo (2012). Then, the sample size of this research will be
calculated based on a rule of thumb from Chin (1998). Referring to Chin (1998), the
minimum sample size should be ten times the largest number of structural paths directed
at a particular latent construct in the structural model. Based on the conceptual model
(see Figure 1 and also Figure 2), the minimum sample of this study should be 60 for the
first conceptual modal, in which ten times six the number of the structural paths directed
to particular latent construct and the minimum sample of this study should be 90 for the
second conceptual model, in which ten times nine the number of the structural paths direct
to particular latent construct. With the help of Asosiasi Industri Permebelan

dan Kerajinan Indonesia (ASMINDO), the closed questionnaires were sent to 175 SMEs
located in three regions. The questionnaire is addressed to the owner of the SMEs to
expect that the respondents could offer a deep insight into the GSCM practices conducted
by their SMEs and be knowledgeable about their respective enterprise so as to ensure the
quality of the collected data. We try to increase the response rate using several ways
suggested by studies on survey research (Dillman, 2000; Frohlich, 2002; Zhao et al., 2006).
Each questionnaire was supplemented by a cover letter indicating the purpose of
the study and potential contributions. The letter also assured complete confidentiality to
the respondents. Follow-up calls were made to encourage completion, return of the
questionnaires and to clarify any questions that potentially had arisen (Frohlich, 2002;
Zhao et al., 2006). After several reminders by phone calls and e-mails, we received
100 completed and useable questionnaires; the numbers of the sample taken from each
regency were 33 owners of SME of furniture located in Semarang, 32 owners of SME of
furniture located in Kudus, and 35 owners of SME of furniture located in Jepara.
The response rate was 57 percent, which can be regarded as satisfactory in this type of
survey-based study (Malhotra and Grover, 1998; Frohlich, 2002). Besides that, with
100 completed and useable questionnaire, the sample of research has been met the
minimum required sample size. Briefly, the profile of the respondents is reported in section
characteristic of respondent.
4.3 Instrument and measurement

In 52 items were selected to test the relationship between the internal and external
factors and the implementation of the GSCM practice. Out of 52 items, 35 items were used to
measure independent variable and 17 items the dependent variable (implementation of the
GSCM practices). Then, out of 35 items, 5 items were used to measure involvement and
support from management and employee, 6 items were used to measure readiness of
the technology of the SMEs of furniture, 10 items belonged were used to measure knowledge
owned by the personnel of SMEs, 6 items were used to measure the financial factor,
5 factors were used to measure regulation pressure and 4 items were used to measure
customer pressure. The items used to measure involvement and support from management
and employee were adopted from Huang et al. (2015). The items used to measure the
readiness of the technology of the furniture, knowledge owned by the personal of SMEs and
the financial support were adopted from Govindan et al. (2014). The items used to measure
regulation and customer pressure were adopted from Walker et al. (2008) and Huang et al.
(2015). The items used to measure the implementation of the GSCM practices were adopted
from Zhu et al. (2005) and Zhu et al. (2013). In a measure of support from management and GSCM
employee, the readiness of the technology of the furniture, the knowledge owned by practices
the personal of SMEs, and the financial support, this study uses five-level Likert scale (1 ¼
strongly disagree, 2 ¼ disagree, 3 ¼ neither agree nor disagree, 4 ¼ agree and 5 ¼ strongly
agree). This study also uses the five-point Likert scale for measuring the implementation of
GSCM practices, but with a different meaning. In this case, 1 ¼ not consider at all, 2 ¼ plan
to consider, 3 ¼ currently consider, 4 ¼ start to implement and 5 ¼ full implementation.
In detail, all of the items used in this research can be seen in Table II. Then, this study used
the partial least square (PLS) method through SmartPLS 3.0 software for processing the
data obtained from questionnaire.
5. Data analysis
5.1 Characteristic of respondent
Most of the respondents were male (95 percent were male and 5 percent are female). Most of
the respondents were 41–50 year old. A large proportion of respondent was using the wood
waste for the manufacture of souvenir products (35 percent), accessories for furniture
products (32 percent), sold to wood waste collectors (25 percent) and as a fuel (8 percent).
5.2 Results of measurement test

Convergent and discriminant validity and reliability assessed the measurement model.
This study has eliminated any item with factor loading less than 0.5 to ensure convergent
validity (Fornell and Larcker, 1981). As seen in Table II, five items from the independent
variable, eight items from the early adoption of GSCM practices, and twelve items from the
full implementation of GSCM practices were deleted. Out of the five items, one item belonged
to technology, and four items belonged to knowledge. Having eliminated those items, the
loading factor of each item from each region was re-calculated. The final value of loading
factor of each item, Cronbach’s α, and the composite reliability (CR) of each construct can be
seen in Table I. The CR value and Cronbach’s α values of all of the construct were above the
threshold value of 0.7 (Akter et al., 2011; Bagozzi and Yi, 1988). The value of final loading
factor indicated an adequate convergent validity of each item and the CR value and
Cronbach’s α value indicated the satisfactory reliability of each construct.
In this study, the cross-loading criterion is used to measure discriminant validity. In this
case, the loading factor of each indicator should be higher than all of its cross-loadings
(Chin, 1998). The result of discriminant validity check can be seen in Table III.
Comparing the loadings factor across the columns in Table III, we can see that indicator’s
loadings on its construct are higher than all of its cross-loadings with other constructs in all
cases. This condition indicates the existence of discriminant validity between all the constructs.
5.3 Results of structural model assessment

The validity of the structural model is assessed using the coefficient of determination (R2),
goodness of fit (GoF) index and SRMR value. The R2 value indicates the amount of variance in
the dependent variables explained by the independent variables, Chin (1998) advocated that
the R2 values 0.63, 0.33 and 0.19 show substantial, moderate and weak levels of determination,
respectively. Thus, the GoF index is crucial to assess the global validity of a PLS-based
complex model. PLS does not have a formal GoF since PLS is a variance-based structural
equation modeling (SEM). Therefore, the calculation of GoF refers to Tenenhaus et al. (2005)
suggestion. GoF is defined as the geometric mean of the average communality and average R2
for all endogenous constructs. According to Tenenhaus et al. (2005), the GoF values 0.1, 0.25
and 0.36 show substantial, small, moderate and large of the global validity of a PLS-based
complex model, respectively. The value of SRMR indicated the differences between the
JMTM
Table II.
and reliability test

The result of validity
Outer loading
(convergent validity) Reliability test
Initial loading Final loading Cronbach’s
No Statements factor factor AVE α CR
(A)Involvement and support from management and employee (INV )

1 The top management support for green strategy (INV1) 0.782 0.770 0.460 0.702 0.808
2 The employee support in implementing the GSCM practices (INV2) 0.577 0.566
3 The enterprise has been allocating specialized human resource for implementing the GSCM
practices (INV3) 0.587 0.601
4 The enterprise’s environmental vision (INV4) 0.746 0.744
5 The aspiration of the enterprise to build up a positive environmental-friendly image (INV5) 0.685 0.684
(B) Technology (TECH)
1 The enterprises have an effective environmental measures (TECH1) 0.492 Deleted 0.596 0.829 0.880
2 The competency of human resources owned by enterprise is adequate for implementing the new 0.740 0.726
technology or new process related with the GSCM practices (TECH2)
3 The enterprises have a technical expertise to help the implementation of the new technology or new 0.680 0.726
process related with the GSCM practices (TECH3)
4 The easiness to design the furniture which can reduce the consumption of resource/energy (TECH4) 0.742 0.746
5 The current production process practice is very flexible to switch over to new system (TECH5) 0.774 0.787
6 There is so many a new technology related with reuse/recycle used product in furniture industry 0.864 0.864
that can used by the enterprises (TECH6)
(C) Knowledge (KNOW)
1 Awareness about reverse logistics adoption (KNOW1) 0.775 0.793 0.489 0.785 0.849
2 Believes about environmental benefits (KNOW2) 0.673 0.696
3 Perception that GSCM practices “part-of responsibility” zone (KNOW3) 0.352 Deleted
4 Easiness in identifying environmental opportunities (KNOW4) 0.572 0.575
5 The availability of eco-literacy amongst supply chain members (KNOW5) 0.221 Deleted
6 The availability of environmental knowledge (KNOW6) 0.250 Deleted
7 Easiness in identifying third parties to recollect used products (KNOW7) 0.427 Deleted
8 The availability of a specific environmental goals (KNOW8) 0.771 0.784
9 Easiness in obtaining information on potential environmental improvements (KNOW9) 0.766 0.764
10 Willingness to convert to new systems (KNOW10) 0.514 0.537
(continued )
Outer loading
(D) Financial (FINA)

1 Low investments and more return-on-investments (FINA1) 0.657 0.687 0.404 0.750 0.771
2 Collection of used products do not burden the enterprise with high cost (FINA2) 0.637 0.587
3 The availability of bank loans to encourage green products/processes (FINA3) 0.650 0.592
4 Do not need extra cost for extra human resources for implementing the GSCM practices (FINA4) 0.705 0.647
5 Low cost of hazardous waste disposal (FINA5) 0.424 Deleted
6 Lower cost of switching to new production system which is related to reuse/recycle used product 0.510 0.656
(FINA6)
(E) Regulation pressures (REGP)
1 National laws and regulations on environmental protection (REGP1) 0.747 0.757 0.559 0.810 0.863
2 National laws and regulations on resource conservation (REGP2) 0.740 0.755
3 Local laws and regulations on environmental protection (REGP3) 0.862 0.851
4 Local laws and regulations on resource conservation (REGP4) 0.790 0.776
5 Environmental regulations from the import countries (REGP5) 0.593 0.608
(F) Consumer pressures (CONP)
1 Demand for environmental protection in market (CONP1) 0.779 0.792 0.598 0.780 0.855
2 Demand for green product in market (CONP2) 0.689 0.695
3 Increasing environmental awareness of the consumers which can be known from purchasing 0.802 0.787
pattern (CONP3)
4 Collaboration in designing the product with customers (CONP4) 0.822 0.809
( J) The implementation of GSCM practices (GSCM)
The level of implementation green purchasing (GP) which consists of
1 Providing specification to suppliers that include environmental requirements (GPU1/GPU1C) 0.424*/ Deleted*/ 0.440*/ 0.836*/ 0.871*/
0.117** Deleted** 0.588** 0.762** 0849**
2 Cooperation with suppliers for environmental objectives (GPU2/GPU2C) 0.631*/ 0.726*/
0.713** 0.807**
3 Environmental audit for suppliers’ inner management (GPU3/GPU3C) 0.650*/ 0.765*/ Deleted**
0.295**
(continued )
practices
GSCM
Table II.
JMTM
Table II.
Outer loading
4 Suppliers’ ISO 14000 certification (GP4) 0.646*/ 0.660*/

0.077** Deleted**
5 Suppliers are selected using environmental criteria (GPU5/GPU5C) 0.673*/ 0.807*/
0.126** Deleted**
The level of implementation the customer cooperation with environmental (CCO) concern which consists of
1 Cooperation with customer for eco-design (CCO1/CCO1C) 0.329*/ Deleted*/
0.378** Deleted**
2 Cooperation with customers for cleaner production (CCO2/CCO2C) 0.502*/ 0.576*/
0.719** 0.814**
3 Cooperation with customers for using less energy during product transportation (CCO3/CCO3C) 0.722*/ 0.807*/
0.571** 0.597**
4 Cooperation with customers for product take back (CCO4/CCO4C) 0.583*/ 0.504*/
0.558** Deleted**
The level of implementation eco-design (ECO) which consists of
1 Design of products for reduced consumption of material/energy (ECO1/ECO1C) 0.494*/ Deleted*/
0.208** Deleted**
2 Design of products for reuse, recycle, recovery of material, component parts (ECO/ECO2C) 0.401*/ Deleted*/
0.496** Deleted**
3 Design of products to avoid or reduce use of hazardous of products (ECO3/ECO3C) 0.671*/ 0.543*/
0.786** 0.827**
4 Design of processes for minimization of waste (ECO4/ECO4C) 0.263*/ Deleted*/
0.054** Deleted**
The level of implementation of investment recovery (IR) which consists of
1 Investment recovery (sale) of excess inventories/ materials (IRE1/IRE1C) 0.422*/ Deleted*/
0.287** Deleted**
2 Sale of scrap and used materials (IRE/IRE2C) 0.483*/ Deleted*/
0.477** Deleted**
3 Collecting and recycling end-of-life products and materials (IRE/IRE3C) 0.190*/ Deleted*/
0.344** Deleted**
4 Establishing a recycling system for used and defective products (IRE/IRE4C) 0.722*/ 0.807*/
0.333** Deleted **
Note: *Early adoption/**Full implementation
Customer pressure Early adoption Financial Full implementation Involvement Knowledge Regulation Technology
CCO2 0.150 0.379 0.181 0.047 0.051 0.093 0.086 0.150

CCO3 0.363 0.808 0.252 0.125 0.429 0.400 0.013 0.449
CCO4 0.342 0.503 0.262 0.009 0.368 0.381 0.171 0.421
ECO3 0.152 0.548 0.246 0.253 0.148 0.193 −0.171 0.223
GPU2 0.430 0.727 0.325 0.215 0.491 0.379 −0.143 0.435
GPU3 0.496 0.762 0.124 0.026 0.528 0.455 −0.137 0.508
GPU4 0.295 0.696 0.184 0.258 0.380 0.292 −0.229 0.257
GPU5 0.323 0.646 0.122 0.089 0.336 0.322 −0.099 0.316
IRE4 0.363 0.808 0.252 0.125 0.429 0.400 0.013 0.449
CC2C −0.079 0.095 0.111 0.814 −0.141 −0.123 −0.027 −0.210
CC3C −0.048 0.184 0.244 0.957 −0.074 −0.015 −0.362 −0.046
ECO3C −0.114 0.105 0.165 0.827 −0.148 −0.122 −0.116 −0.170
GPU2C −0.191 0.190 0.126 0.806 −0.182 −0.167 −0.326 −0.224
CONP1 0.791 0.510 0.239 −0.166 0.753 0.699 0.261 0.681
CONP2 0.686 0.331 0.265 −0.167 0.503 0.505 0.238 0.570
CONP3 0.794 0.320 0.049 −0.050 0.321 0.344 0.128 0.331
CONP4 0.815 0.364 0.056 −0.029 0.358 0.367 0.145 0.379
FIN1 0.137 0.178 0.660 0.045 0.147 0.132 −0.003 0.227
FIN2 0.026 0.183 0.581 0.086 −0.043 −0.038 −0.013 0.120
FIN3 −0.020 0.136 0.575 0.160 −0.028 0.073 −0.024 0.080
FIN4 0.328 0.332 0.671 0.143 0.304 0.345 0.131 0.350
FIN6 0.328 0.320 0.671 0.143 0.304 0.345 0.131 0.350
INV1 0.670 0.489 0.200 −0.172 0.756 0.617 0.199 0.627
INV2 0.349 0.328 0.055 −0.185 0.573 0.315 0.082 0.370
INV3 0.410 0.305 0.013 −0.224 0.904 0.437 0.145 0.372
INV4 0.377 0.417 0.140 −0.081 0.745 0.589 0.194 0.589
INV5 0.401 0.376 0.183 0.064 0.689 0.525 0.052 0.472
KNOW1 0.622 0.404 0.107 −0.156 0.592 0.791 0.133 0.625
KNOW10 0.319 0.273 0.113 −0.059 0.458 0.585 0.162 0.426
(continued )
practices
GSCM
The result
validity check
Table III.
of discriminant
JMTM
Table III.
Customer pressure Early adoption Financial Full implementation Involvement Knowledge Regulation Technology
KNOW2 0.455 0.371 0.080 −0.095 0.523 0.702 0.137 0.476

KNOW4 0.318 0.327 0.053 −0.002 0.452 0.588 0.189 0.413
KNOW8 0.472 0.350 0.251 −0.019 0.594 0.778 0.164 0.627
KNOW9 0.528 0.385 0.330 −0.013 0.498 0.762 0.164 0.641
REGP1 0.282 0.016 0.011 −0.194 0.267 0.231 0.745 0.182
REGP2 0.303 0.024 0.178 −0.121 0.243 0.164 0.719 0.235
REGP3 0.110 −0.239 0.027 −0.300 0.093 0.120 0.865 0.129
REGP4 0.191 −0.127 0.056 −0.147 0.094 0.129 0.760 0.196
REGP5 0.244 0.070 0.047 −0.261 0.243 0.246 0.632 0.325
TECH2 0.524 0.450 0.336 −0.091 0.477 0.538 0.320 0.727
TECH3 0.470 0.380 0.142 −0.157 0.599 0.567 0.036 0.725
TECH4 0.576 0.353 0.163 −0.232 0.610 0.644 0.207 0.743
TECH5 0.412 0.483 0.242 −0.105 0.511 0.551 0.155 0.796
TECH6 0.601 0.478 0.356 −0.246 0.649 0.688 0.279 0.860
correlation of the observed model or null model and a correlation of prediction model GSCM
(Hair et al., 2012). The SRMR showed the error of GoF model. The value of SRMR was ranging practices
from 0 to 1. The small value of SRMR indicated that the residuals between the actual data and
the prediction model were very good (Iacobucci, 2010). Hu and Bentler (1999) stated that the
SRMR value of under 0.08 indicated that the model was very good or the fit was good.
However, in some research works such as Şenel (2011) and Dede and Ayranci (2014), the
model was considered as having the adequate fit if the value of SRMR ranging from 0.05
to 0.1. Table III shows that the value of SRMR was 0.100 that indicated the model has
an adequate fit. The R2 value, GoF index and SRMR value for a hypothesized model can be
seen in Table IV.
5.4 Results of hypothesis testing

The results of hypothesis testing are presented in Table V and Figure 3. In this study, they
may clearly show a significant relationship between independent variable and dependent
variable if the p-value is less than 0.1, 0.05, or p-value less than 0.01.
According to the result of hypothesis testing, H1, H2, H3, H5, H6 and H10 were rejected,
whereas H4, H7, H8, H9, H11, H12, H13, H14 and H15 were accepted. Full implementation of
GSCM practices was influenced by early adoption of GSCM practices (0.421; po0.01),
R2 GoF SRMR
INV, TECH, KNOW, FIN, REGP,CONP 0.493 (moderate level

→ EARLY ADOPTION OF GSCM of determination)
INV, TECH, KNOW, FIN, REGP,CONP, 0.288 (weak level of Table IV.
EARLY ADOPTION OF GSCM→FULL determination) The R2 value, GoF
IMPLEMENTATION OF GSCM index and SRMR
Complete (main effects) model 0.445 (large of 0.100 (model have value for
global validity) adequate fit) hypothesized model
t-value
Relationship Loading factor (p-value) Result
H1 Involvement → full implementation 0.187 1.139 (0.255) Rejected

H2 Technology → full implementation 0.228 1.578 (0.115) Rejected
H3 Knowledge → full implementation 0.112 0.662 (0.508) Rejected
H4 Financial → full implementation 0.243 2.166 (0.031) Accepted**
H5 Regulation pressure → full implementation 0.135 0.988 (0.318) Rejected
H6 Customer pressure → full implementation 0.059 0.446 (0.655) Rejected
H7 Early adoption → full implementation 0.421 3.282 (0.001) Accepted***
H8 Involvement → early adoption 0.310 2.573 (0.010) Accepted***
H9 Technology → early adoption 0.401 2.453 (0.014) Accepted**
H10 Knowledge → early adoption 0.003 0.022 (0.922) Rejected
H11 Financial → early adoption 0.167 2.187 (0.029) Accepted**
H12 Regulation pressure → early adoption 0.298 2.391 (0.017) Accepted**
H13 Customer pressure → early adoption 0.198 1.831 (0.067) Accepted*
H14 Regulation pressure → early adoption → full 0.123 1.891 (0.059) Accepted*
implementation
H15 Consumer pressure → early adoption → full 0.081 1.766 (0.078) Accepted* Table V.
implementation Result of
Notes: *,**,***Significant at 0.1, 0.05 and 0.001 levels, respectively hypothesis testing
JMTM Regulation Pressure
0.298 ( p = 0.017)**
0.123 ( p = 0.059)*
Early Adoption of Fully Implementation
0.198 ( p = 0.067)* GSCM of GSCM
Customer Pressure
0.081 ( p = 0.078)*
• Green Purchasing • Green Purchasing
• Consumer • Consumer
0.310 ( p = 0.01)***
Involvement Cooperation with Cooperation with
Environmental Environmental
0.421 ( p = 0.001)***
Concern Concern
• Eco-design • Eco-design
Technology 0.401 ( p = 0.014)** • Investment • Investment
Recovery Recovery
Financial
0.167 ( p = 0.029)**
Figure 3.
The results of 0.243 ( p = 0.031)**
hypothesis testing
Notes: *,**,***Significant at 0.1, 0.05 and 0.01 levels, respectively
followed by financial factor (0.243; po0.05), regulation pressure (0.123; po0.1), and customer
pressure (0.081; po0.1). In this case, early adoption of GSCM practices and financial factor
had a significant direct effect on the full implementation of GSCM practices, whereas
regulation and customer pressure had a significant indirect effect on the full implementation
of GSCM practices. The regulation and customer pressure influenced full implementation of
GSCM practices through early adoption of GSCM practices. Except knowledge, all the
proposed factors (technology (0.401; po0.05), involvement (0.310; p ¼ 0.01), regulation
pressure (0.298, p o0.05), customer pressure (0.198, p o 0.1), and financial factor
(0.167; po0.05)) had a significant effect on early adoption of GSCM practices.
6. Data analysis and findings

As an important environmental initiative, the antecedent factors of implementation of GSCM
practice, the impact of GSCM practices on enterprises performance, and also the practices of
GSCM itself have attracted more and more attention in the literature. However, most of the
existing GSCM research is characterized by evolving internal and external factors together,
without distinguishing the role of any of factors on the different stages of implementation of
GSCM practice. The clarification of the impact of internal and external factors on the different
stage of implementation of the GSCM practice is important for extending our understanding of
GSCM research on two main fronts. First, some studies in recent years (e.g. Hu and Hsu, 2010;
Diabat and Govindan, 2011; Agan et al., 2013; Luthra et al., 2014; Govindan et al., 2014; Dubey
et al., 2017; Vanalle et al., 2017) have combined internal and external factors in the same role as
the antecedent factor of the implementation of GSCM practices by the enterprises and did not
differentiate the stage of implementation of GSCM practices. Others have focused on the GSCM
practices by the enterprises (e.g. Liu et al., 2012; Huang et al., 2015; Agi and Nishant, 2017)
although they did not differentiate the stage of implementation of GSM practices. Although
conceptually correct, this approach may hide some important research contributions as
suggested by the results of this present study. Therefore, the first contribution of this study is to
provide and test an integrated framework, which incorporates the internal and external factors
as the integrated factors influencing the full implementation of GSCM practices. Second, because
of the different stages of implementation of GSCM practices (Zhu et al., 2005, 2013), choosing
the appropriate factors influencing the early stage of adoption of GSCM practices and the
appropriate factors influencing the higher stage of adoption of GSCM practice is challenging.
It is not easy to compare the result of this research with the others since this research
has divided the implementation of GSCM practices into two conditions, early adoption and
full implementation. However, related to internal drivers, the involvement of top
management and employee, technology, and also financial factors owned by the
enterprises has been found to be significantly associated with the willingness of the SME GSCM
to adopt GSCM practices, which is in line with several recent research works. A significant practices
effect of involvement of top management and employee on the adoption of GSCM practices
can be found in the several recently research conducted by Agan et al. (2013),
Govindan et al. (2014), Huang et al. (2015), Dubey et al. (2017), Agi and Nishant (2017) and
Vanalle et al. (2017). According to Agan et al. (2013), the involvement of top management
can be seen through their moral and social responsibility to the environment, whereas
according to Vanalle et al. (2017), the involvement of top management can be seen through
enterprise’s environmental mission. According to Agi and Nishant (2017), the top
management commitment exerts a critical influence on the implementation of GSCM
practices. The finding of a significant effect of technology on the willingness of SMEs to
adopt the GSCM practices supports the result of several recent research studies, such as
Luthra et al. (2014), Govindan et al. (2014) and Agi and Nishant (2017). The adoption of
GSCM practices by SMEs of wooden furniture depends on their capability to access the
minimum level of technology that can help them to reduce the effect of their products on
the environment through their whole life cycle. Moreover, a significant effect of financial
factor on the willingness of SMEs to adopt the GSCM practices also supports the result of
several recent research works conducted by Agan et al. (2013), Govindan et al. (2014),
Dubey et al. (2017) and Vanalle et al. (2017). Referring to the study by Zhu and Sarkis
(2004), investment especially in green practices is necessary for early adoption success, in
terms of green performance. The financial factor is the only internal factor that has a
direct effect on the full implementation of GSCM practices. The implementation of GSCM
practices by the SMEs of wooden furniture depends on their capability to get a low
investment and more return-on-investment, support from bank loans, and lower cost for
collecting the used product, extra human resources and switching to the new production
system. The greater the benefits perceived by SMEs, the greater the desire of SMEs to
fully implement the GSCM practice. This research fails to prove a significant effect of
knowledge on the willingness of SMEs to adopt the GSCM practices. The effect of
knowledge on the willingness of SMEs to adopt or to fully implement the GSCM practices
is insignificant. This condition is contrary to the result of several recent research studies,
such as Govindan et al. (2014), Luthra et al. (2014) and Agi and Nishant (2017). One of the
reasons for our result may be that most SMEs of wooden furniture lack human resources
with expertise on the adoption of GSCM practices, even though they have the employee
who is willing to be actively involved in adopting the GSCM practice. The SMEs only
adopt the environmental practices because they are directed by top management and they
have a technology and financial capabilities.
Related to external factors, the results of this study have revealed that regulation and
customer pressure have a significant effect on the willingness of SMEs to adopt or fully
implement the GSCM practices. This result confirms the existing literature that customer
pressure and government regulatory pressure are positively related to implementation of
GSCM practices of an enterprise from developed economies, like Korean (Lee, 2008), Indian
(Mohanty and Prakash, 2013), Turkish (Agan et al., 2013) and Chinese (Huang et al., 2015).
It can be said that SMEs of wooden furniture adopt or fully implement the environmental
practices because they are facing a pressure from both environmental regulation and the
ecological requirements of the market.
7. Managerial and social implications

The findings of this study have some managerial and social implications that could provide
valuable insights to SMEs of the wooden furniture industry to understand the significant
internal and external factors for implementing the GSCM practices. Managers and decision
maker need to know what factors should be focused more to improve the implementation of
JMTM GSCM practices. In this case, the proposed and empirically supported model provides more
specific direction to SMEs of wooden furniture to develop a strategy for implementing the
GSCM practices. From the internal side of the enterprises, the main managerial implication
of this study is that the SMEs of wooden furniture should develop three combined internal
antecedent factors of implementation of GSCM practice, namely, the involvement and
support from the top management of SMEs and their employee, technology, and financial
factor. It is consistent with previous research conducted by Agan et al. (2013), Govindan
et al. (2014), Huang et al. (2015), Dubey et al. (2017), Agi and Nishant (2017) and Vanalle et al.
(2017). Understanding how three combined internal factors affect the implementation of
GSCM practices should help managers to concentrate their efforts and efficiently allocate
resources to attain the objective. In doing so, manager can develop an effective
comprehensive environmental strategy, which requires the top management of SMEs show
an environment-oriented, allocate a specific person for implementing the GSCM practice and
learning about the current technology which can support the environmental design product,
and also allocate the specific budget to support the implementation of GSCM practice. Once
environment has become a strategic focus, manufacturers can begin to implement

sustainability practices with some degree of confidence (Green et al., 2012).
Moreover, related to the internal factors, this study also found that financial factor was
the only factor with a direct effect on the full implementation of the GSCM practice.
Therefore, to encourage full implementation of GSCM practices, the government should help
the SMEs of furniture in developing low cost-GSCM implementation techniques and provide
easiness to them to get the needed fund for implementing the GSCM practice. Then, from the
external side of the enterprise, the major managerial implication of this study is that the
SMEs of wooden furniture should pay more attention to the external antecedent factors of
the implementation of the GSCM practice, namely regulation and customer pressure. It is
consistent with previous research conducted by Lee (2008), Mohanty and Prakash (2013),
Agan et al. (2013) and Huang et al. (2015). In doing so, managers can develop an effective,
comprehensive environmental strategy based on the external pressure of the enterprise,
which requires that SMEs align the practices undertaken by the enterprise with government
regulation that related to the implementation of the GSCM practices and also with the
demand from the customer.
The major social implication of this study as a consequence of the effect of external
antecedent factors is that the government should have a specific regulation that drives the
enterprise to push the implementation of the GSCM practice. In this case, as the regulator,
a government can provide rewards for green performing companies by subsidizing the
environmentally friendly product or stimulating customers to buy green products that it
increases the market share for them. The government also can encourage media to
increase the legality of green SMEs. In other action, governments may enforce taxes for
SMEs that not committing sustainability in their SCM (Clemens and Douglas, 2006).
Moreover, the government may influence NGOs to empower their relationship with the
green businesses (Formentini and Taticchi, 2016). According to the World Bank report
(Hasan, 2015), there were several pieces of legislation that reflected Indonesia’s
commitment to managing its environment and natural resources, such as the Law on the
environment enacted in 1982 that was replaced in 1997 with law No. 21 of 1997 concerning
environmental management, the law on waste Management No. 18/2008, ministry
regulation No. 3/2008 concerning utilization procedure of hazardous waste, laws No.
32/2009 concerning the environmental protection and management, Presidential
Regulation of the Republic of Indonesia No. 61/2011 concerning the national action plan
for greenhouse gas emissions reduction, and government regulation No. 101/2014
concerning hazardous waste management (Hasan, 2015). The major problem is most of the
laws have been criticized as being inconsistent at times and often overlapping.
Then, related to environmental taxes, these taxes were proposed by the Indonesian GSCM
Department of Finance in the amendment of Law Number 34 of 2000 on Local Taxes and practices
Charges. It empowered local governments to use their authority to establish local
regulations in implementing environmental taxes. Another major social implication of this
study is that the consumers should be given information and understanding to buy
products from environmentally friendly enterprises only. In this case, the importance of
knowledge about the purchasing behavior of environmentally friendly product has been
proved by several researchers, such as Thøgersen et al. (2010), Daugbjerg et al. (2014),
Kianpour et al. (2014), Liu et al. (2017) and Chen et al. (2018).
8. Conclusions and further research

Our study extends the supply-chain literature by defining the essential drivers for
implementing the GSCM practices from the internal and external perspectives. The five
dimensions of important drivers (support and involvement, technology, knowledge,
financial, and customer and regulation) investigated in this study are broader in the scope
covering various dimensions of barrier and challenge for SMEs of furniture to implement
the GSCM practices. Our study also extends prior GSCM research by developing and
empirically testing a comprehensive model that explore the role of external drivers in the
relationship between early adoption and full implementation of GSCM practices. For the
first conceptual model, this study found only financial factor has a direct positive effect on
the full implementation of GCSCM practices. For the second conceptual model, this study
found that internal and external drivers comprising involvement, technology, financial,
regulation, and customer pressure have the direct effect on early adoption of GSCM
practices. Among those factors, technology has a most significant effect on early adoption of
the GSCM practice. Although this study can prove the positive indirect effect of the
regulation and customer pressure on full implementation of GSCM practices toward early
adoption, the correlation is smaller than the direct effect of regulation and customer pressure
on early adoption. So, based on the result of the second conceptual model, this study can
conclude that involvement, technology, financial, regulation and customer pressure are the
antecedent factors of early adoption of the GSCM practice by the SMEs of wooden furniture
and early adoption is the antecedent factor of full implementation the GSCM practices.
For the first conceptual model, our findings failed to prove that knowledge has the direct
effect on early adoption and full implementation of GSCM practices. Our findings also fail to
prove that involvement, technology, regulation pressure and customer pressure have the
direct effect on the full implementation of the GSCM practice. From a practical view,
the theorized and empirically supported model provides a valuable structured approach to
the development of the strategy of implementation of the GSCM practice for the owners of
SMEs and the government. Although we have empirically tested the research model in the
context of Indonesia’s wooden furniture industry only, the results provide an overview to
test it in the other sectors of SMEs and the environmental management practices. The main
managerial implication of the result of this study is managers and decision maker can
concentrate their efforts and efficiently allocate resources to the specific factors that
contribute to improve the implementation of GSCM practices. The main social implication of
the result of this study is government should have a specific regulation and the consumers
should be given information and understanding the important of their environmentally
behavior to push the enterprises in doing the GSCM practices.
As with many other empirical and survey-based studies, this research has several
limitations. First, the sample of research was restricted to SMEs of furniture in there
region, so the result of this study may be not applicable to other regions or even in the
other industries. In response to this limitation, future research may expand the scope of
the data collection to another regions in Indonesia that also produce furniture and may
JMTM also adopt cross-cultural perspectives and a longitudinal study or provide further
insights. Second, this study is only using involvement, technology, knowledge, financial,
and regulation and customer pressure as an antecedent variable of early adoption of the
GSCM practice. In fact, other variables contribute to the early adoption of the GSM
practice, such as competitor pressure, social pressure and supplier pressure. Third, this
study only used the Likert scale as an approach to measure the implementation of the
GSCM practice management, which can be the source of bias in expressing the level of the
implementation. In this case, this study did not see in detail the implementation of GSCM
practices by the SMEs of wooden furniture such as the intentions of the supplier,
percentage of customer really interested in GSCM, reverse supply chain, and disposal
methods. The implementation of GSCM practice is only based on the perception of the
owner of the SMEs. In response to this limitation, future research can enhance the
measurement by using direct measurement, rather than recording the perception of
the management or owners of the SMEs.
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Corresponding author
Aries Susanty can be contacted at: ariessusanty@gmail.com
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Department of Industrial Engineering, Universitas Diponegoro,

indirect effect of external drivers on the higher phase of implementation of GSCM

Potential success factors

Organizational factors or internal factors

Potential success factors

Potential success factors

Non-organizational factors or external factors

leading employees to a higher level of performance (Tucker and Russell, 2004).

GSCM practice among furniture manufacturing SMEs:

3.2 The role of technology, knowledge and financial on the implementation of

huge influence on the implementation of GSCM practices.

Early adaption of the

implementation of External drivers Investment Recovery

to particular latent construct. With the help of Asosiasi Industri Permebelan

4.3 Instrument and measurement

5.2 Results of measurement test

5.3 Results of structural model assessment

and reliability test

(A)Involvement and support from management and employee (INV )

(D) Financial (FINA)

4 Suppliers’ ISO 14000 certification (GP4) 0.646*/ 0.660*/

CCO2 0.150 0.379 0.181 0.047 0.051 0.093 0.086 0.150

KNOW2 0.455 0.371 0.080 −0.095 0.523 0.702 0.137 0.476

5.4 Results of hypothesis testing

INV, TECH, KNOW, FIN, REGP,CONP 0.493 (moderate level

H1 Involvement → full implementation 0.187 1.139 (0.255) Rejected

6. Data analysis and findings

7. Managerial and social implications

environment has become a strategic focus, manufacturers can begin to implement

8. Conclusions and further research

Strategy and the Environment, Vol. 21 No. 1, pp. 1-16.

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4 Suppliers’ ISO 14000 certification (GP4) 0.646/ 0.660/