THE ROLE OF GHRM AND GREEN HUMAN CAPITAL FOR

PERFORMANCE THROUGH REVERSE LOGISTICS AND

REMANUFACTURING OPERATIONS IN THE MANUFACTURING
SECTOR OF PAKISTAN

Arsalan Mushtaq
Dr. Muhammad Asim
(Chairman Karachi University Business School, University of Karachi)
Sir Salman Manzoor
(Education and Literacy Department, Government of Sindh)

Abstract
The current research has examined the factors that effects firm performance in the
manufacturing industry of Karachi, Pakistan. The data collection was conducted by using
quantitative approach and analysis was conducted by using PLS-SEM based on SmartPLS
3.2.8. The sample size was identified as 178 sample responses. The findings have identified
that availability of green human capital has a positive and significant effect on reverse
logistics adoption. The availability of green human capital has a positive and significant
effect on remanufacturing operations performance. The GHRM has a positive and significant
effect on reverse logistics adoption. The GHRM has a positive and significant effect on
remanufacturing operations performance. The reverse logistics adoption has a positive and
significant effect on firm performance. The reverse logistics adoption has a positive but
insignificant effect on remanufacturing operations performance. The remanufacturing
operations performance has a positive and significant effect on firm performance. In light of
the above discussion, there are several recommendations for the SC managers and
policymakers. Managers must concentrate on the planning to highlight the scope of green
practices, identify capability deficiencies, and suggest suitable training programs.

Keywords: Availability of Green Human Capital, Reverse Logistics Adoption,

Remanufacturing Operations Performance, Firm Performance, Pakistan.
INTRODUCTION
The manufacturing sector in developing economies is facing a great deal of internal and
external strain due to substantial competition in global manufacturing, particularly in the
areas of Firm Performance and Green Management. Growing labor costs and fierce
international competition are currently harming the manufacturing sector in emerging
markets (Choi & Lim, 2017). So, Organizations need to track and control their Supply
Chain management practices successfully and efficiently to boost competitive advantages.

The presence of Green Human Capital is an initiate that helps the practice of environmental
friendly managements like the green supply chain for instance. It also includes lean green
manufacturing and reverse logistics to gain prosperity and sustainability. (Charbel Jose
Chiappetta jabbour et al., 2019). Environmental preservice is the main goal targeted for
improving the Remanufacturing operations Performance. The human resources department
should also devise strategies according to that (Teixeira, Jabbour, de Sousa Jabbour, Latan &
De Oliveira, 2016). Human factors such as Availability of Green Human Capital causes
issues with regards to reverse logistic adoption process (Matsumoto et al., 2016). The target
of this research is focused on the factors that effects the performance of the company in the
manufacturing industry of Pakistan. The factors elaborated will be green HRM, green human
capital, Remanufacturing Operations Performance and Reverse logistics.

Among different industries, RL adoption has increased due to the rising environmental
concern, applied laws, corporate social concern, biodiversity, intense global competitiveness,
problems of viability and the returns of increased products due to product recalls, the return
of warranty, the return of service, end of life, etc. (Prakash & Barua, 2016). Reverse logistic
management is a limited, but important management Part of the Firm performance to
encourage market managers to return goods and return raw materials to manufacturers and to
preserve consistency, cooperating manufacturing and distribution activities have been carried
out, and operational stops were prevented due to a shortage of currency, and critical policies,
frameworks, structures, and procedures have been developed to make use of goods and
returned products to reduce total expenses (Najafizadeh & Kazemi, 2019). There is a
consensus that efficient reverse logistics Adoption help enterprises save money and serve
customer satisfaction (Vlachos, 2016).
There is an agreement that successful reverse logistics adoption lets businesses save money
and satisfy consumers (Vlachos, 2016). However, to understand the degree to which reverse
logistics capabilities lead to firm performance, there is little theoretical support and limited
empirical data. There is also a lack of literature illustrating how the abundance of human
resources can solve the burning problems of reverse logistics and ROP (Bag & Gupta, 2019).
Several challenges revolve around the RL adoption process and this is largely due to human
factors such as the availability of green human capital (Matsumoto et al., 2016). A void, i.e.
the absence of coordinated approaches within the aspects of human resources and
environmental management can be seen in the literature. Human resources play a major role
in the company's execution of environmental management policies (Bag & Gupta, 2019).
Strong human resources practice not only raise the level of engagement of workers and their
desire to continue in the enterprise but also boost the SC performance, there is however a lack
of literature illustrating how the abundance of human resources can solve the problems of
reverse logistics.
The business faces a major setback in reverse logistics and remanufacturing operation
procedures these obstacles are are then divided into two major inbound challenges and
outbound challenges. The issues that are mentioned in inbound challenges include high cost,
bad contracts, customer specification, disposal of old goods, identification and classification
of returned product, rigid imports and export legislation. The outbound challenges include
complex outbound logistics and high cost.(Bag & Gupta, 2019). Most past environmental
management reports have analyzed the environmental management strategies of businesses
(e.g., energy-saving and water preservation) (Molina-Azorín, Tarí, Pereira-Moliner, Lopez-
Gamero, & Pertusa-Ortega, 2015). However, there is a lack of empirical studies that connect
human resource management (HRM) to firm performance through the availability of Green
Human Capital (Kim, Kim, Choi, & Phetvaroon, 2019). Furthermore, few studies have
explored the correlation between the Green practices of workers and environmental
firm performance. In short, there has been a considerable lack of research investigating how
GHRM promotes the engagement and eco-friendly actions of workers, encouraging firms to
optimize their environmental performance (Kim et al., 2019).
In both RL adoption and the Remanufacturing Operations Performance (ROP), businesses
face several obstacles (Bag & Gupta, 2019). For better FP of manufacturing companies, the
ROP is advantageous because it is not only useful for retrieving essential parts, but also
avoids a significant amount of energy and economy that was originally involved in
manufacturing those parts (Bag & Gupta, 2019). The like-new material is a mixture of a large
proportion of the original content used during its first manufacture and a limited proportion of
new material (Kamble, Gunasekaran, & Gawankar, 2018). Not only does this method reduce
money, but it also produces a commodity with minimal additional cost (Katiyar, Meena,
Barua, Tibrewala, & Kumar, 2018).
The manufacturing sector boosts the productivity of economies globally by producing goods
and services (Abdul-Rashid, Sakundarini, Ghazilla, & Thurasamy, 2017). As a developing
world, Pakistan is now getting the benefits of its manufacturing industry's growth. Data
indicates in recent studies that the manufacturing industry has been a big contributor to the
country's gross domestic product (GDP). This sector now accounts for 13.3% of the national
GDP and 14.2% of overall jobs. (Pakistan, 2016).
The contribution of this analysis is manifold: first, by analyzing the effect of GHRM on FP, it
adds to the GHRM literature. Second, by implementing GHRM practices, this analysis gives
insight into the performance outcomes. Third, the research can play a role in guiding
executives to establish and introduce effective GHRM practices in their companies, which
can bring significant repercussions to the industry. The research will be useful not only for
the academicians but also for the HR managers and the practitioners in the manufacturing
industries. Moreover, this analysis is also intended to lead to the improvement of the
Pakistani manufacturing industries. Lastly, as the majority of the researches related to GHRM
Practices were conducted in the developed world, so the academicians, industry managers,
and suppliers would be further benefited as the study is conducted in a developing country,
which is Pakistan.
The second chapter of this research consists of Literature on the theoretical background,
hypothesis creation, empirical studies, and conceptual framework, in this study. Chapter 3
(Methodology) deals with the study subject, procedures, design, sampling methodology,
target group, sample size, methodology, measurement technique, and ethical concern; in
Chapter 4, the findings of a study will be explained and debated. The conclusions, policies,
consequences, and suggestions of the study are addressed in chapter 5.
LITERATURE REVIEW
The economic performance of the firms or industrial organization and their environmental
approach has been weakened for developing effective firm performance. So, firms have
shifted their views towards examining the internal resource-based factors (Rouse &
Daellenbach, 1999). The resource-based view theory has achieved high importance as
mentioned by (Wernerfelt, 1984). This theory has a basic concept that focuses on the firm’s
resources and their residing capabilities that helps in understanding their firm’s performance
(J. Barney, 1991; Peteraf, 1993). Besides, the important aspect regarding RBV is that it
identifies that firm can effectively and relatively better use their resources as compared with
their industry (Rumelt, 1984). Similarly, according to Amit and Schoemaker (1993);
Eisenhardt and Martin (2000) firm has been identified as a unique bundle regarding its
internal resources for the development of its development. The RBV refers to that firm’s such
resources that are internal and cannot be imitated might help achieve superior performance (J.
B. Barney, 1986; Reed & DeFillippi, 1990). Also, Roininen (2008) stated that the resource-
based view focuses on gaining a competitive edge by using valuable resources that are
innovatively applied in the firm’s development processes. The firm’s performance can be
effectively differentiated through tracing back their assets and internal resources that have
been owned by the firm. Similarly, resources have been termed as the productive assets that
can help the firms to achieve their main business objectives and develop future performance
as well (Butt). Hence, the resource-based view theory has also helped the researcher in
understanding the aspect of the firm performance regarding the manufacturing firms in the
context of Karachi, Pakistan.
Furthermore, dynamic capability theory emphasizes the competition of the firm in such a
market that is dynamic and can include unidentified changes as well (Eisenhardt & Martin,
2000). This theory has been termed as an extension of the RBV theory and the DC theory
helps in working on their strategies and reconfiguring resources as well. Besides, SCM has
been identified as a strategic process and it should consist of resilience and gain competitive
advantage. So, DC theory focuses on developing the capabilities for achieving the
competitive edge and effective performance in the industry (Chowdhury & Quaddus, 2017).
Also, dynamic capabilities can be termed as resilient capabilities and it can help overcome
the troubles faced in the supply chain (Ponomarov & Holcomb, 2009). According to
Danneels (2004) dynamic capability includes the abilities in a firm that could be renewed and
adapt to the continuously changing environment of the market and develop their services
towards effective production. Similarly, the concept of DC theory has been highly useful in
the process of development of a new product and integrate the capabilities to achieve the
shifting market. Various researches have focused on this theory and showed their interest. For
example, Tsoukas and Mylonopoulos (2003) have focused on organizational learning,
Newbert (2005) emphasizes new information and knowledge management as well. The use of
DC theory has been termed as important towards the achievement of effective manufacturing
and their operations in the supply chain that could use these capabilities for gaining firm
performance (Wilson, 2007). Similarly, Liao (2019) stated that the DC theory has been
known as the competence that could be used in creating innovative processes and achieve
competitive performance. The theory also refers to the capacity that extracts the benefits from
the capabilities and creates required changes and develops a sustainable environment
regarding firm performance.
Availability of Green Human Capital and Reverse Logistics Adoption
The basic concept of green human capital (GHC) refers to the summarized set of the
knowledge, capabilities, attitude, wisdom, and experience of the employee regarding
environmental protection. Similarly, it also has been identified as a driving force to achieve
green production in the supply chain (Yong, Yusliza, Ramayah, & Fawehinmi, 2019).
Besides, Bag, Gupta, and Foropon (2019) studied these variables and identified that there
exists a significant relationship and it helps the supply chain in the process of
remanufacturing. Also, the presence of the human factor has gained importance regarding the
proper and adequate management of environmental problems that could be effective in the
process of sustainability and reverse logistics (Zaid, Jaaron, & Bon, 2018). The process of
recruiting such employees that provides an edge in the shape of green skills and are dedicated
towards the development of economic value could help in achieving the reverse logistics as
well Longoni, Luzzini, and Guerci (2018). Various researches gave high attention and
emphasized the aspect of green human capital and its importance towards the development of
reverse logistics adoption. For instance, Acquah, Agyabeng-Mensah, and Afum (2020) stated
that the GHC has been highly necessary for the development of the supply chain and conduct
the process of reverse logistics and their required practices effectively and efficiently.
Therefore we propose:
H1: Availability of GHC has a significant effect on Reverse Logistics Adoption
Availability of Green Human Capital and Remanufacturing Operations Performance
The relation between green firm and ecological sustainability is built on the idea of
Availability of Green Human Capital only to make more efficiency of the supply chain and
operation with green capital in industries (Charbel Jose Chiappetta Jabbour & de Sousa
Jabbour, 2016). The sustainability of the firm is dependent on human factors as depicted by
the literature. Environmental priorities perfectly align with human resource policies in
management of green human capital (Charbel Jose Chiappetta Jabbour & de Sousa Jabbour,
2016). Various risk factors and instability is observed in remanufacturing procedure. The max
risk is uncertain in terms of inconsistency and quality of commodity returns (Bag et al.,
2019). The business must focus on green human resources management and build green
capital to accompany reverse logistics and streamline remanufacturing (Charbel José
Chiappetta Jabbour & de Sousa Jabbour, 2016; Sun, Zhang, & Li, 2018). Therefore, we
propose:
H2: Availability of GHC has a significant effect on Remanufacturing Operations
Performance
The literature fights with a different cause and says for the circular economy green human
resources must be halted ( Charbel Jose Chiappetta Jabbour et al., 2019). Positive impact has
been observed on tripple bottom line sustainability with green training and green human
resources development (Zaid et al., 2018). The economic development of the firm is relatable
to the green recruitment. The impact of green resource management is great on the employees
it makes the workers more enthusiastic, determined and engaged, they help the company
generate great profits (Longoni et al., 2018). Factors such as the reverse logistic network paly
an importaant role in company’s affective and immediate implementation of reverse logistic
adoption (Bag & Gupta, 2019). The green team has to view every aspect of the project with
relation to envoirnments benefit and works to boost the sustainability performance (Mangla,
Govindan, & Luthra, 2016). Therefore we propose:
H3: GHRM has a significant effect on Reverse Logistics Adoption
Remanufacturing operations have a huge influence on energy conservation, material saving,
and protection of the environment (Xu, 2016). As a traditional mode of green manufacturing,
remanufacturing is an important way of transforming and updating the manufacturing sector.
green human resources management is implemented by aligning human resource practices
with environmental goals (Charbel Jose Chiappetta Jabbour et al., 2019). Human factors such
as low workforce engagement levels, lack of skilled workers, and lack of reverse logistics
training are obstacles to reverse logistics adoption (Bag & Gupta, 2019). In terms of quality
and quantity of product returns, the top risks included in Remanufacturing Operations
Performance are uncertainty (Bag & Gupta, 2019). Remanufacturing operations are not only
advanced forms of renewable resources but also important measures to develop a circular
economy and to create a resource-saving and environmentally-friendly society (Xu, 2016).
Therefore we propose:
H4: GHRM has a significant effect on Remanufacturing Operations Performance

The reverse logistics department assist the company in returns of handled product. Activities
such as stock selection, inventory management, sorting refurbishments, modes collection and
remanufacturing activities are to be carefully handled by the reverse logistic cycles in the
circular economy era (Bag & Gupta, 2019). The role of reverse logistics is very important for
the growth of the company and relates to ecological and economic performance (Huang,
Huang, & Yang, 2017) (Vlachos, 2016). Najafizadeh and Kazemi (2009) proposed that to
minimize the cost and reduce expensive Reverse logistics is a hand in need and will
ultimately boost the company’s performance. Therefore we propose:

H5: Reverse logistics adoption has a significant effect on Firm Performance

Remanufacturing operations include complicated phases in the process and a wide number of
operations inside a firm. Past researchers have indicated that concentrating on eliminating the
uncertainties in the quality and quantity of products returned is essential (Bag & Gupta,
2019). In all the steps of ROP, to conduct each of these tasks on the factory floor, the
Firm needs professional green human resources with remanufacturing knowledge. If the
company does not grow and update the green human resources with continuing global
technical developments, the firm will eventually lose the strategic advantage and will die in
the long run (Bag & Gupta, 2019; Kirchherr, Reike, & Hekkert, 2017). To reduce financial
costs, remanufacturing operational decisions must be taken prudently; to avoid business
losses, customers must be satisfied with the supply of the correct quality of remanufactured
products (Graham et al., 2015). Therefore we propose:
H6: Remanufacturing Operations Performance has a significant effect on Firm Performance
The effectiveness of remanufacturing operations relies on the timely supply of the goods and
parts returned, which is only possible if the enterprise has a comprehensive network of
reverse logistics (Bag & Gupta, 2019). Remanufacturing firms based on the implementation
of reverse logistics adoption therefore profit tremendously and increase business performance
(Bag & Gupta, 2019; Kirchherr et al., 2017). As reverse logistics entails a set of processes
including the return, maintenance, recycle, remanufacturing operations, and disposal of used
or end-of-life goods, it is a strategic decision to introduce a reverse logistics network inside a
firm. This decision aims to accomplish a single or multiple goals of cost minimization,
maximization of profit, consumer loyalty, or environmental benefit (Li, Wang, Jiang, & Kim,
2017; Marchi, Zanoni, Zavanella, & Jaber, 2019; Shi, Liu, Tang, & Xiong, 2017). Therefore
we propose:
H7: Reverse Logistics Adoption has a significant effect on Remanufacturing Operations
Performance
Conceptual framework

Figure 1: Research Framework

METHODOLOGY

Study Design
The quantitative method is a very rigorous one since it operates in a setting that is
comparatively simpler and easier and therefore increases the ability to forecast the improved
number of outcomes (Bahari, 2010). A quantitative methodology has been used in this
analysis. The explanation for the selection was that it permitted the researcher to perform the
procedure at a lower cost, time, and management characteristics. This approach can also yield
results that can be generalized. Furthermore, the explanatory analysis should be carried out to
help and work on an existing collection of details to extend the characteristics of the research
target and to gain further and proper awareness about it (Wiersma & Jurs, 2005). This thesis
used an explanatory form to perform the analysis and the explanation was that it helped to
establish a broad concept quickly and accurately to explain the research issue. Moreover, the
design of the correlation can be defined as a design that helps to perform and analyze
statistical relations (Blessing & Chakrabarti, 2009). Therefore the aforementioned discussion
made the researcher use correlation design so it helped to know about previously unidentified
partnerships and their frequency or strength of relationships as well.
Sampling Design
Revenue is expected to hit US$ 448 million in 2020 in the consumer electronics market. An
annual growth rate (CAGR 2020-2025) of 8.4 percent is predicted to show sales, resulting in
an estimated business value of US$672m by 2025. In 2020, consumer penetration will be 5.0
percent and is anticipated to cross 7.7 percent by 2025 (Ilyas, Srivastava, Kim, & Abbas,
2020). Therefore, the study chooses the electronic industry of Pakistan as a target population.
Moreover, the purposive sampling strategy is where, because of their experience in the field
and data diversity, the data is obtained from industry experts (Suen, Huang, & Lee, 2014).
The purposive sampling was used as the information was meant to be obtained from
individuals that may supply information that is abundant in the results.
Besides, the researchers used the N5 formula suggested by Hair Jr, Black, Babin, Anderson,
and Tatham (2010) for sample size estimation. N is the total number of items in the
questionnaire of the study, and the total number of items in the present analysis is 28. Hence,
the minimum sample needed for the analysis was found as 140. However, to achieve
considerable generalizability of the findings, the study has obtained 178 responses from the
target population.
Data Collection Technique
Using survey methods, the data collection process may be performed. The process of the
survey defines the best manner in which researchers use multiple instruments to gather
respondent data (Rubin & Babbie, 2007). A questionnaire instrument that can be built using
close-ended questions based on any scale is used in the survey technique. Besides, the five-
point Likert scale in the questionnaire was recognized as a scale that offers substantial
efficient outcomes by offering several choices to answer the questions (Slattery et al., 2011).
Therefore in this study, the survey methodology was adopted using a self-administered
questionnaire based on a five-point Likert scale. The reasoning was that it helped to compile
data in a cost-efficient and time-efficient way.
Data Analysis Technique
The researchers use several data analysis methods for the analysis of data. The PLS-SEM is a
method of data analysis technique that helps the researcher to analyze the dynamic
correlation between the variables as well as the relationship of cause and effect between them
(Nitzl, 2016). The PLS-SEM has been used as it makes the interaction with absolute accuracy
among the variables.
Ethical Consideration
The current study also included various ethical considerations. For instance, the complete
research process was informed towards respondents and their data and identity was kept
secured and was used only for academic and research purpose. At last, it was told to
respondents that if the respondents feel any pressure or force from the researcher anyone can
leave the research process at any time.

DATA ANALYSIS AND FINDINGS

Demographic Profile of the Respondents
The following table 1 has been based on the demographics of respondents.

Table 1: Demographic Profile (n= 178)

Frequency Percent
Male 142 79.8
Gender
Female 36 20.2
18 to 25 36 20.2
Age Group 26 to 35 106 59.6
36 to 45 36 20.2
Undergraduate 12 6.7
Graduate 59 33.1
Education
Post-Graduate 95 53.4
Ph. D 12 6.7
Textile 47 26.4
Pharmaceutical 36 20.2
Industry Type
Chemical 24 13.5
Others 71 39.9
Manager 35 19.7
Senior Manager 36 20.2
Designation Deputy Manager 23 12.9
Assistant
60 33.7
Manager
Others 24 13.5
Less than 300 48 27
Firm Size (No. of 300 - 500 23 12.9
Employees) 600 - 800 48 27
More than 800 59 33.1
Measurement Model
The following table 2 has been based on the measurement model.

Table 2: Measurement Model

Cronbach's Composite Average Variance
Variables Items Loadings
Alpha Reliability Extracted (AVE)
AGHC1 0.756
AGHC2 0.930
AGHC AGHC3 0.953 0.889 0.920 0.699
AGHC5 0.766
AGHC6 0.752
FP2 0.922
FP3 0.952
FP 0.948 0.963 0.866
FP4 0.866
FP5 0.979
GHRM1 0.930
GHRM2 0.766
GHRM GHRM4 0.889 0.895 0.923 0.707
GHRM5 0.797
GHRM6 0.811
RLA1 0.928
RLA2 0.903
RLA 0.911 0.937 0.789
RLA3 0.886
RLA4 0.834
ROP1 0.896
ROP2 0.918
ROP ROP4 0.808 0.933 0.949 0.790
ROP5 0.891
ROP6 0.926

The above table has included the values of outer loadings, composite reliability (CR) and
average variance extracted (AVE). The recommended threshold given by Hair, Hult, Ringle,
and Sarstedt (2016) for outer loadings has been identified as 0.70 and values should be higher
than this. Moreover, the recommended threshold for CR and AVE given by Hair, Sarstedt,
Hopkins, and Kuppelwieser (2014) refers to 0.70 and 0.50. The above table has been based
on the above mentioned threshold and therefore measurement model had been successfully
achieved.
 Figure 2: PLS Algorithm

Discriminant Validity
The following table 3 has been based on results of Fornell and Larcker (1981) criterion for
discriminant validity.

Table 3: Fornell and Larcker (1981) Criterion

AGHC FP GHRM RLA ROP
AGHC 0.836
FP 0.618 0.931
GHRM 0.686 0.687 0.841
RLA 0.752 0.698 0.824 0.889
ROP 0.716 0.809 0.803 0.727 0.889

The above table has a recommendation given by Fornell and Larcker (1981) that all the
diagonal values should be higher in their constructs as compared to the values that are
presented in other constructs. The table has been successful in this and hence, discriminant
validity had been achieved using Fornell and Larcker (1981) criterion.

The following table 4 has been based on results of crossloadings for discriminant validity.

Table 4: Crossloadings
AGHC FP GHRM RLA ROP
AGHC1 0.756 0.671 0.446 0.613 0.537
AGHC2 0.930 0.536 0.666 0.702 0.647
AGHC3 0.953 0.602 0.633 0.689 0.704
AGHC5 0.766 0.403 0.287 0.521 0.523
AGHC6 0.752 0.355 0.793 0.601 0.559
 FP2 0.648 0.922 0.591 0.619 0.812
FP3 0.579 0.952 0.710 0.635 0.726
FP4 0.486 0.866 0.585 0.694 0.668
FP5 0.578 0.979 0.673 0.655 0.796
GHRM1 0.625 0.547 0.930 0.754 0.734
GHRM2 0.609 0.784 0.766 0.873 0.669
GHRM4 0.505 0.568 0.889 0.583 0.638
GHRM5 0.421 0.546 0.797 0.551 0.576
GHRM6 0.674 0.405 0.811 0.629 0.725
RLA1 0.782 0.563 0.740 0.928 0.687
RLA2 0.638 0.603 0.562 0.903 0.499
RLA3 0.638 0.761 0.764 0.886 0.613
RLA4 0.608 0.542 0.829 0.834 0.755
ROP1 0.707 0.632 0.709 0.759 0.896
ROP2 0.667 0.802 0.739 0.645 0.918
ROP4 0.490 0.629 0.847 0.509 0.808
ROP5 0.580 0.803 0.590 0.656 0.891
ROP6 0.730 0.718 0.684 0.660 0.926

The above table has a recommendation given by Hair et al. (2016) that all values that have
been bold must be higher in their own constructs supporting their individual construct highly.
The table has been based on this recommendation and therefore, discriminant validity had
been achieved using crossloadings.
The following table 5 has been based on results of HTMT ratio for discriminant validity.
Table 5: Heterotrait-Monotrait Ratio (HTMT)
AGHC FP GHRM RLA ROP
AGHC
FP 0.671
GHRM 0.750 0.738
RLA 0.834 0.751 0.883
ROP 0.784 0.857 0.872 0.781

The above table has a recommendation that given by Henseler, Ringle, and Sarstedt (2015)
that all the values must be lower than 0.90 for acceptance. The table has showed all correct
values. Hence, discriminant validity had been achieved using HTMT ratio.
Structural Model
The following table 6 has showed the results of hypothesis testing.
Table 6: Path Analysis
Estimate Std Dev. T-Stats Prob.
AGHC -> RLA 0.353 0.050 7.052 0.000
AGHC -> ROP 0.302 0.068 4.452 0.000
GHRM -> RLA 0.583 0.052 11.291 0.000
GHRM -> ROP 0.574 0.078 7.369 0.000
RLA -> FP 0.232 0.058 3.994 0.000
RLA -> ROP 0.026 0.071 0.365 0.715
 ROP -> FP 0.640 0.046 13.811 0.000

The above table has identified that availability of green human capital (0.353, p < 0.10) has a
positive and significant effect on reverse logistics adoption. The availability of green human
capital (0.302, p < 0.10) has a positive and significant effect on remanufacturing operations
performance. The GHRM (0.583, p < 0.10) has a positive and significant effect on reverse
logistics adoption. The GHRM (0.574, p < 0.10) has a positive and significant effect on
remanufacturing operations performance. The reverse logistics adoption (0.232, p < 0.10) has
a positive and significant effect on firm performance. The reverse logistics adoption (0.026, p
> 0.10) has a positive but insignificant effect on remanufacturing operations performance.
The remanufacturing operations performance (0.640, p < 0.10) has a positive and significant
effect on firm performance.
Predictive Relevance
The following table 7 has been based on predictive relevance results.

Table 7: Predictive Relevance

R Square R Square Adjusted Q Square
FP 0.680 0.677 0.584
RLA 0.746 0.743 0.574
ROP 0.696 0.691 0.545

The above table has identified that firm performance has been predicted up to (0.680) 68.0
percent, reverse logistics adoption has been predicted up to (0.746) 74.6 percent and
remanufacturing operations performance has been predicted up to (0.696) 69.6 percent.
However, Q square values of all the variables have been higher than absolute zero.

Figure 3: PLS Bootstrapping

CONCLUSION AND RECOMMENDATIONS
This research has examined the factors that affect firm performance in the manufacturing
industry of Karachi, Pakistan. The factors were the Availability of Green Human Capital,
green HRM, Reverse Logistics Adoption, and Remanufacturing Operations Performance. The
target population of the study is the SC professionals. Data has been collected through a five-
point Likert scale questionnaire. PLS-SEM has been used for data analysis. The study
concluded a significant positive association between GHRM Practices and Firm Performance.
Moreover, the study also found a significant positive connection between RL Adoption and
GHRM Practices. These findings will lead to important decision support for manufacturing
firms and their partners. Besides, this will mean that organizations now have greater
awareness to better decide on the application of GHRM Practices through FP.
In light of the above discussion, there are several recommendations for the SC managers and
policymakers. Managers must concentrate on the planning to highlight the scope of green
practices, identify capability deficiencies, and suggest suitable training programs. Managers
need to market and hire correct applicants who can execute tasks and maintain talents by
incentive systems, etc., using the correct green job description. It takes investment in training
and growth to build a reservoir of green human capital; the return however is amazing.
Moreover, Reverse logistics adoption requires the local/global connection of buyers,
manufacturers, and scrap dealers to build and execute the network. It needs detailed demand
forecasts to build such a network, which further aims to reduce the difference between
demand and supply. When setting up the collection centers and scheduling the fleet,
managers must make wise decisions as high costs will eat away profitability and make such a
project unprofitable. The fact of the matter, though is that remanufacturing operations are
likely to collapse in the long run without providing a sufficient reverse logistics cycle and
administrators must also pay attention to reverse logistics optimization using green human
resources.
Furthermore, To be willing to tackle the entire operation in-house to sustain a competitive
advantage in the market, management must concentrate on allocating money and authorizing
budgets to construct remanufacturing facilities to empower green human capital.
Besides, reverse logistics adoption and remanufacturing operations have a significant impact
on firm performance. The availability of green human capital is also a positive way of
handling human resources as workers become happy and healthier. Companies without green
human capital would struggle with reverse logistics adoption and it will affect
remanufacturing operations, which will lead to losses of opportunity and economic damage.
To adopt reverse logistics and pursue cleaner remanufacturing operations, manufacturing
companies must build green human capital without drawing energy from nature for endless
replenishment. The result of this research is "yes" -green human capital matters because it
appears to be an indispensable asset for encouraging the introduction of reverse logistics
adoption and remanufacturing operations performance.
As all research papers have certain drawbacks, the same is the case with this one. The
existing model is limited to manufacturing companies in Pakistan. Related studies will further
endorse our findings if done in other cultural and social contexts. Future studies should
explore this subject from the perspective of other nations and future studies should conduct a
comparative analysis of how Asian countries differ in their commitment to GHRM from their
European and North American counterparts. The current analysis is cross-sectional, so the
collected data may have been corrupted by qualitative elements. The variables used here may
also be considered limited as some others might also be used by future researchers. Besides,
Rather than qualitative tactics, the study centered on the techniques of quantitative analysis.
The data in this analysis is quantitatively analyzed and this can make the outcomes limited.
The methods of qualitative research may have been better applied in such a research setting.
Moreover, the analysis used the approach of PLS-SEM which has experience in exploratory
models, while it also has limited some parameters of the current study. The future researcher
can use multiple regression analysis in their study. Finally, for the data collection process, the
analysis used the popularly recognized Five-point Likert scale, whereas the seven-point scale
may provide more precise methodological considerations. Hence, future studies should
examine these contingencies and associated contextual variables as well, for the research.
 References

Abdul-Rashid, S. H., Sakundarini, N., Ghazilla, R. A. R., & Thurasamy, R. (2017). The
impact of sustainable manufacturing practices on sustainability performance.
International Journal of Operations & Production Management.
Acquah, I. S. K., Agyabeng-Mensah, Y., & Afum, E. (2020). Examining the link among
green human resource management practices, green supply chain management
practices and performance. Benchmarking: An International Journal.
Amit, R., & Schoemaker, P. J. (1993). Strategic assets and organizational rent. Strategic
management journal, 14(1), 33-46.
Bag, S., & Gupta, S. (2019). Examining the effect of green human capital availability in
adoption of reverse logistics and remanufacturing operations performance.
International Journal of Manpower.
Bag, S., Gupta, S., & Foropon, C. (2019). Examining the role of dynamic remanufacturing
capability on supply chain resilience in circular economy. Management Decision.
Bahari, S. F. (2010). Qualitative versus quantitative research strategies: Contrasting
epistemological and ontological assumptions. Sains Humanika, 52(1).
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of
management, 17(1), 99-120.
Barney, J. B. (1986). Organizational culture: Can it be a source of sustained competitive
advantage? Academy of management review, 11(3), 656-665.
Blessing, L. T., & Chakrabarti, A. (2009). Drm, a design research methodology: Springer
Science & Business Media.
Choi, Y. S., & Lim, U. (2017). Contextual factors affecting the innovation performance of
manufacturing smes in korea: A structural equation modeling approach.
Sustainability, 9(7), 1193.
Chowdhury, M. M. H., & Quaddus, M. (2017). Supply chain resilience: Conceptualization
and scale development using dynamic capability theory. International Journal of
Production Economics, 188, 185-204.
Danneels, E. (2004). Disruptive technology reconsidered: A critique and research agenda.
Journal of product innovation management, 21(4), 246-258.
Eisenhardt, K. M., & Martin, J. A. (2000). Dynamic capabilities: What are they? Strategic
management journal, 21(10‐11), 1105-1121.
Fornell, C., & Larcker, D. F. (1981). Structural equation models with unobservable variables
and measurement error: Algebra and statistics. Journal of marketing research, 18(3),
382-388.
Graham, I., Goodall, P., Peng, Y., Palmer, C., West, A., Conway, P., . . . Dettmer, F. U.
(2015). Performance measurement and kpis for remanufacturing. Journal of
Remanufacturing, 5(1), 10.
Hair, J. F., Hult, G. T. M., Ringle, C., & Sarstedt, M. (2016). A primer on partial least
squares structural equation modeling (pls-sem): Sage Publications.
Hair, J. F., Sarstedt, M., Hopkins, L., & Kuppelwieser, V. G. (2014). Partial least squares
structural equation modeling (pls-sem) an emerging tool in business research.
European Business Review, 26(2), 106–121.
Hair Jr, J., Black, W., Babin, B., Anderson, R., & Tatham, R. (2010). Sem: An introduction.
Multivariate data analysis: A global perspective, 5(6), 629-686.
Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant
validity in variance-based structural equation modeling. Journal of the academy of
marketing science, 43(1), 115-135.
Huang, Y.-C., Huang, C.-H., & Yang, M.-L. (2017). Drivers of green supply chain initiatives
and performance. International Journal of Physical Distribution & Logistics
Management.
Ilyas, S., Srivastava, R. R., Kim, H., & Abbas, Z. (2020). Electrical and electronic waste in
pakistan: The management practices and perspectives. In Handbook of electronic
waste management (pp. 263-281): Elsevier.
Jabbour, C. J. C., & de Sousa Jabbour, A. B. L. (2016). Green human resource management
and green supply chain management: Linking two emerging agendas. Journal of
cleaner production, 112, 1824-1833.
Jabbour, C. J. C., Sarkis, J., de Sousa Jabbour, A. B. L., Renwick, D. W. S., Singh, S. K.,
Grebinevych, O., . . . Godinho Filho, M. (2019). Who is in charge? A review and a
research agenda on the ‘human side’of the circular economy. Journal of Cleaner
Production, 222, 793-801.
Kamble, S. S., Gunasekaran, A., & Gawankar, S. A. (2018). Sustainable industry 4.0
framework: A systematic literature review identifying the current trends and future
perspectives. Process Safety and Environmental Protection, 117, 408-425.
Katiyar, R., Meena, P. L., Barua, M. K., Tibrewala, R., & Kumar, G. (2018). Impact of
sustainability and manufacturing practices on supply chain performance: Findings
from an emerging economy. International Journal of Production Economics, 197,
303-316.
Kim, Y. J., Kim, W. G., Choi, H.-M., & Phetvaroon, K. (2019). The effect of green human
resource management on hotel employees’ eco-friendly behavior and environmental
performance. International Journal of Hospitality Management, 76, 83-93.
Kirchherr, J., Reike, D., & Hekkert, M. (2017). Conceptualizing the circular economy: An
analysis of 114 definitions. Resources, Conservation and Recycling, 127, 221-232.
Li, J., Wang, Z., Jiang, B., & Kim, T. (2017). Coordination strategies in a three-echelon
reverse supply chain for economic and social benefit. Applied Mathematical
Modelling, 49, 599-611.
Liao, T.-S. (2019). The role of r&d leverage as a dynamic capability in performance creation:
Evidence from smes in taiwan. Journal of Business Administration Research, 2(02).
Longoni, A., Luzzini, D., & Guerci, M. (2018). Deploying environmental management across
functions: The relationship between green human resource management and green
supply chain management. Journal of Business Ethics, 151(4), 1081-1095.
Mangla, S. K., Govindan, K., & Luthra, S. (2016). Critical success factors for reverse
logistics in indian industries: A structural model. Journal of Cleaner Production, 129,
608-621.
Marchi, B., Zanoni, S., Zavanella, L., & Jaber, M. (2019). Supply chain models with
greenhouse gases emissions, energy usage, imperfect process under different
coordination decisions. International Journal of Production Economics, 211, 145-
153.
Molina-Azorín, J. F., Tarí, J. J., Pereira-Moliner, J., Lopez-Gamero, M. D., & Pertusa-Ortega,
E. M. (2015). The effects of quality and environmental management on competitive
advantage: A mixed methods study in the hotel industry. Tourism Management, 50,
41-54.
Najafizadeh, A., & Kazemi, F. (2019). The impact of reverse logistics capabilities on firm
performance with mediating role of business strategy. Journal of System
Management, 5(2), 225-240.
Newbert, S. L. (2005). New firm formation: A dynamic capability perspective. Journal of
small business management, 43(1), 55-77.
Nitzl, C. (2016). The use of partial least squares structural equation modelling (pls-sem) in
management accounting research: Directions for future theory development. Journal
of Accounting Literature, 37, 19-35.
Pakistan, G. o. (2016). Economic survey of pakistan (2015-2016). In: Govt. of Pakistan,
Economic Advisor’s Wing, Finance Division Islamabad, Pakistan.
Peteraf, M. A. (1993). The cornerstones of competitive advantage: A resource‐based view.
Strategic management journal, 14(3), 179-191.
Ponomarov, S. Y., & Holcomb, M. C. (2009). Understanding the concept of supply chain
resilience. The international journal of logistics management.
Prakash, C., & Barua, M. K. (2016). A multi-criteria decision-making approach for
prioritizing reverse logistics adoption barriers under fuzzy environment: Case of
indian electronics industry. Global Business Review, 17(5), 1107-1124.
Reed, R., & DeFillippi, R. J. (1990). Causal ambiguity, barriers to imitation, and sustainable
competitive advantage. Academy of management review, 15(1), 88-102.
Roininen, S. (2008). Networking as a tool for competitive advantage: Evidence from swedish
new ventures. Luleå tekniska universitet,
Rouse, M. J., & Daellenbach, U. S. (1999). Rethinking research methods for the
resource‐based perspective: Isolating sources of sustainable competitive advantage.
Strategic management journal, 20(5), 487-494.
Rubin, A., & Babbie, E. (2007). Survey research methods. Pacific Grove, CA: Brooks/Cole.
Rumelt, R. P. (1984). Towards a strategic theory of the firm. Competitive strategic
management, 26(3), 556-570.
Shi, J., Liu, Z., Tang, L., & Xiong, J. (2017). Multi-objective optimization for a closed-loop
network design problem using an improved genetic algorithm. Applied Mathematical
Modelling, 45, 14-30.
Slattery, E. L., Voelker, C. C., Nussenbaum, B., Rich, J. T., Paniello, R. C., & Neely, J. G.
(2011). A practical guide to surveys and questionnaires. Otolaryngology--Head and
Neck Surgery, 144(6), 831-837.
Suen, L.-J. W., Huang, H.-M., & Lee, H.-H. (2014). A comparison of convenience sampling
and purposive sampling. Hu Li Za Zhi, 61(3), 105.
Sun, L., Zhang, L., & Li, Y. (2018). Sustainable decisions on product upgrade confrontations
with remanufacturing operations. Sustainability, 10(11), 4090.
Teixeira, A. A., Jabbour, C. J. C., de Sousa Jabbour, A. B. L., Latan, H., & De Oliveira, J. H.
C. (2016). Green training and green supply chain management: Evidence from
brazilian firms. Journal of Cleaner Production, 116, 170-176.
Tsoukas, H., & Mylonopoulos, N. (2003). Part special issue introduction: Modelling
organizational knowledge. Journal of the Operational Research Society, 54(9), 911-
913.
Vlachos, I. P. (2016). Reverse logistics capabilities and firm performance: The mediating role
of business strategy. International Journal of Logistics Research and Applications,
19(5), 424-442.
Wernerfelt, B. (1984). A resource‐based view of the firm. Strategic management journal,
5(2), 171-180.
Wiersma, W., & Jurs, S. (2005). Research methods in education: An introduction 8 th edition,
new york. Reison Education Inc.
Wilson, S. (2007). Two steps back in the cio reporting structure. CIO Magazine.
Xu, B. (2016). Green remanufacturing engineering and its development strategy in china.
Frontiers of Engineering Management, 3(2), 102-106.
Yong, J. Y., Yusliza, M., Ramayah, T., & Fawehinmi, O. (2019). Nexus between green
intellectual capital and green human resource management. Journal of cleaner
production, 215, 364-374.
Zaid, A. A., Jaaron, A. A., & Bon, A. T. (2018). The impact of green human resource
management and green supply chain management practices on sustainable
performance: An empirical study. Journal of Cleaner Production, 204, 965-979.