Journal of Cleaner Production 175 (2018) 207e221

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Journal of Cleaner Production

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The drivers of sustainable manufacturing practices in Egyptian SMEs

and their impact on competitive capabilities: A PLS-SEM model
Mohamed Aboelmaged
College of Business Administration, University of Sharjah, P.O. 27272, Sharjah, United Arab Emirates

a r t i c l e i n f o a b s t r a c t

Article history: Sustainability has long been recognised as a ubiquitous phenomenon underlying the functions and
performance of firms. Drawing on a natural-resource-based viewd of the firm (NRBV), this paper
examines the impact of technological, organisational and environmental (TOE) drivers on sustainable
Keywords: manufacturing practices (SMP), and the influence of these practices on competitive capabilities (i.e.,
Sustainable manufacturing quality, cost, delivery and flexibility). The model is empirically validated by means of the partial least
SMEs
squares approach to structural equation modelling (PLS-SEM) based on survey data from a spectrum of
Egypt
Egyptian small and medium enterprises (SMEs). The findings demonstrate that environmental pressures
Natural-resource-based view
TOE framework
from stakeholders, management support and the engagement of employees positively influences SMP. In
Competitive capabilities contrast to the existing literature, we find that technology infrastructure, technology competence, and
Operational performance environmental regulations do not significantly affect SMP. Interestingly, the relationship between SMP
and the competitive capabilities of Egyptian SMEs is positively significant. The paper proposes a number
of implications emphasising the role of institutional context in encouraging SMEs to engage in pro-
environmental behaviour and thereby shifting the attention of future research directions on SMP.
© 2017 Elsevier Ltd. All rights reserved.

1. Introduction Manufacturing (ECM) (Richards (1994), the formation of the ‘Rs’

Sustainable manufacturing (SM) is a relatively new field that has
received enormous attention during the last decade. It has evolved
rapidly from traditional operational practices to using innovative
processes that consider social, environmental and economic effects
(Carter and Rogers, 2008). Specifically, SM ensures that operational
processes such as product design, procurement, managing
inventory, quality control, selecting appropriate technology,
scheduling, maintenance, production, and packaging have no
negative effects on natural resources and stakeholders (e.g., con-
sumers, employees, communities) throughout the product's
lifetime (Garetti et al., 2012). SM has become an eminent topic that
can positively contribute to global GDP and sustainability aware-
ness, particularly when we recognise that the manufacturing of
goods contributes over 20 percent of carbon dioxide emissions
worldwide (Jakob et al., 2013). As a result, the European Union
sponsored a global project named IMS2020 that considers SM
research as of the highest priority (Chan et al., 2017). Research on
SM has historically focused on Environmentally Conscious
E-mail address: maboelmaged@sharjah.ac.ae.
strategies (e.g., reduction, remanufacturing, recycling and reuse,
etc.) (Seliger, 2007), and identifying good practices of SM
(Despeisse et al., 2012). The environmental, economic and social
effects of growing CO2 emissions, waste in water, energy and nat-
ural resources, toxic materials and products, etc. Have enforced a
new manufacturing philosophy that respects the direct and indirect
impact of manufacturing activities on our planet as well as valuing
the positive operational effects on cost, quality, flexibility and
delivery of products and services. A critical review of prior studies
(see Table 1) reveals that SM research has attracted increasing
attention from a wide range of disciplines. Hence, we divided the
prior research into two main streams; the SM research stream that
is directly related to sustainable manufacturing, green
manufacturing or green production themes, while the second
stream is concerned with relevant sustainability issues indirectly
related to sustainable manufacturing. The review indicated that SM
research is highly fragmented and the link between the drivers of
SMP and performance is not well established. The main themes of
SM research tend to develop environmental indicators or to assess
the environmental impact of SM (e.g., Singh et al., 2014, 2016a;
2016b). Seuring and Müller (2008) argued that sustainability is
often abridged to environmental improvements, which call for an

https://doi.org/10.1016/j.jclepro.2017.12.053
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208 M. Aboelmaged / Journal of Cleaner Production 175 (2018) 207e221

Table 1
Prior research on SM and pertinent sustainability issues.

Author(s) Theme Country Industry Method Results

Prior research on SM
Rusinko (2007) Evaluation of SM USA Carpet Survey -Some SM practices are associated with competitive outcomes.
Seliger (2007) SMP ns ns Conceptual -Formation of ‘Rs’ strategies (e.g., reduction, remanufacturing,
recycling and reuse, etc.)
Phungrassami Eco-efficiency for Thailand Repairing metal Case study -Reducing pollution loads, cost of using raw materials, and amount
(2008) cleaner production plates LCA water and energy can be realized as a result of substantially.
Sangwan (2011)a, b Benefits of SM India Cross-section Survey -Identifying the quantitative and a literature survey
Despeisse et al. SMP ns ns Review -Sustainable practices include product design, supply chain,
(2012) production technology and waste avoidance activities.
Garetti et al. (2012) New trends in SM ns ns Conceptual -SM can be from a factory point of view as beginning of Life, middle of
life (during operations), and end of life (recycling logistics).
Ramayah et al. The extent of Malaysia SMEs Cross-section Survey -There is an encouraging level of green practices among the SMEs
(2012) implementing green -Green practices within manufacturing lifecycle significantly affect
practices manufacturing performance
Thomas et al. (2012) Qualitative UK Musical Case study -Reducing operating cost allows for achieving long-term economic.
characteristics for instruments -Sustainability and making it more robust to market changes
achieving SM
Trianni and Cagno Barriers to energy Italy SMEs Multiple -Understanding internal and external barriers to energy efficiency
(2012) efficiency cases impact future energy policies
-Developing a novel approach that includes all relevant barriers.
Var

zinskas et al. DSS for packaging Lithuania Paper mill Case study -The developed model is capable of identifying the preferable aseptic
(2012) recycling LCA packaging recycling options and their combinations
Wong et al. (2012) GM and environment China Manufacturing Survey -Process stewardship influences performance outcomes
firms -Technical knowledge competence enhances the performance of
green product innovation
Fatimah et al. (2013) Assessing SM through Indonesia Altern-ators Case study -Identifying improvement opportunities, including eco-efficiency,
re-manufacturing cleaner production and green technology to make existing remanu-
strategies factured products technically, economically, environmentally and
socially sustainable.
Heidrich and Tiwary Environmental UK Drainage products Case study -LCA requires a vast amount of data to evaluate environmental
(2013) assessment of GP LCA performance and expert elicitation. SMEs do not have the resources
and expertise to research all the issues associated with LCA
Sezen and Çankaya GM and innovation Turkey Cross-section Survey GM positively impact sustainable performance through enhancing
(2013) performance production efficiency and occupational safety, and minimizing
production cost.
Chen et al. (2014) Assessment tool for SM Sweden ns Case study -Presenting a holistic sustainability assessment tool for manufacturing
SMEs that provides decision support for improvements and enables a
cross-industry comparison
Chuang and Yang Evaluating SM Taiwan Resistors and Case study- -Proposing three-dimension assessment model for SM include green
(2014) performance inductor ANP design, green process and green packaging and 10 strategic subjects
and 74 assessment factors.
Deif (2011) A system model ns Wood Case study -Describing GM transformation process from starting, developing to
for GM sustaining improvements
Govindan et al. Drivers of GM India ns FBS -Compliance with regulations (e.g., ISO 14001) and maintaining GM
(2015) processes are key GM drivers
Mittal and Sangwan Prioritizing drivers ns ns Case study -Incentives, public pressure and legislations are top ranked drivers for
(2014) for GM FBS GM
Paul et al., 2014 GM practices ns ns Review -Sustainable energy, green operations and supply chain are the best
options for daily and industrial uses.
Roni et al., 2014 SM and firm ns ns Conceptual -Regulation, strategic leadership, resource availability and market
performance forces are related to firm performance
Singh et al. (2014) Assessing SM India Auto electrical Case study -Proposing a model for assessing SM in SMEs and selecting an
indicators in SMEs FBS appropriate strategy to reduce environmental impacts.
Tikul (2014) Assessing Thailand Ceramic tile Case study -Small plant is higher than medium plant in energy consumption
environmental impact -Medium plant should emphasize the accelerated transfer of
of SMEs environmental knowledge to its personnel
Wadhwa (2014) Synergies between lean, ns SMEs Conceptual -A broad sense of social responsibility and awareness of
EMS and SM environmental considerations at all levels in SMEs should be ensured.
Bi et al. (2015) Using industrial robots USA Cooling Case study -Reuse manufacturing resources could bring significant
to achieve SM products competitiveness to an SME
-Robots can be highly utilized in a manufacturing environment with
low or medium product volumes.
Dayaratne and Carbon footprint Sri Lanka SMEs Multiple -Identifying the factory specific amount of carbon footprint emission
Gunawardana, reduction Rubber Cases that match sustainable production in rubber factories.
2015
€ rster (2015)
Fo SM and enabling Germany Auto-motive Delphi -Drivers (cost reduction, customer demands, and legal requirements)
technologies method and hindrances (costs associated with large investments) for the
implementation of various technologies in automotive suppliers
Ghazilla et al. (2015) Drivers and barriers Malaysia ns Delphi -Improved company image, competitiveness and product quality are
for GM key drivers of GM.
-Weak organizational structure is the top critical barrier to GM
Zhou et al. (2015) Public Demonstration China Electric motor Case study -Demonstration projects face a different set of diffusion barriers in
Projects for GM testing GM technologies
-A new policy model may be needed in order to cope with GM
barriers.
 M. Aboelmaged / Journal of Cleaner Production 175 (2018) 207e221 209

Table 1 (continued )

Author(s) Theme Country Industry Method Results

Ali and Suleiman Linking food production Malaysia Food Mixed - Halal food production can achieve sustainable production.
(2016) to sustainability - Not all halal standards demonstrated a connection with the
principles of sustainable production in SMEs
Khatri and Metri Using SWOT to explore India metal recycling Case study -Operational excellence and high resource utilization have emerged
(2016) SM AHP as the two most important factors for achieving SM.
Routroy and Kumar Green capability in India ns Case study -Technology applications are key antecedents for implementing GM
(2016) manufacturing -Technology infrastructure make manufacturing operations more
sustainable
Shankar et al. (2016) Analyzes the drivers ns ns Case study -Quality is the primary driver that leads to SM adoption.
of SM AHP
Singh et al. (2016a) Assessing SM indicators India Survey -Developing indicators for economic, environmental and social
aspects of respectively.
Singh et al. (2016b) Assessing SM indicators Malaysia SMEs Case study -Proposing an expert system for evaluating SM in SMEs.
FBS
Thanki et al. (2016) Impact of lean and green India ns Case study -TPM, Kaizen and 5 S are the most influential lean practices, while ISO
practices on performance AHP 14001, 3 R and DFE are leading green practices.
-Greenness is dictated by a reduction in noxious emissions and energy
consumption
Vinodh et al. (2016) Factors influencing SM India Automotive Survey -Top management commitment is a main force that shoves SMP in
Indian automotive companies.
Winroth et al. (2016) Assessing SM indicators Sweden Cross-section Mixed
27 proposed indicators were relevant and statistically significant
Yusoff et al. (2016) employee empowerment Malaysia MNCs. Survey -Employee empowerment influences SM performance
and SM
Chan et al. (2017) Mathematical problems ns ns Review -Production planning, inventory control and manufacturing network
in SM are key categories related to mathematical problems in SM
Mafini and Muposhi Impact of green supply South Africa Cross- section Survey -GM exert a positive effect on environmental collaboration.
(2017) and GM -Higher levels of environmental collaboration inspired higher levels of
SME financial performance.
Prior research on pertained sustainability issues
Abdel Wahaab Environmental impact Egypt ns Concep-tual -Laws activate environmental actions regarding standards of air
(2003) assessment emission, coastal zone management, land- and marine-based pollu-
tion, and disposal and treatment of hazardous waste in Egypt
Lefebvre et al. (2003) Impact of environmental USA SMEs Cross-section Survey -Environmental performance significantly impact product, process
performance in and organizational innovations.
Menguc and Ozanne Challenges of the green Australia Factories Survey -using NRBV
(2005) imperative -The higher order construct of environmental orientation is
significantly related to profit and market share
El-Zayat et al. (2006) Industry's response to Egypt Cross section Survey -Positive attitude toward the environment was not translated into a
environmental full compliance with environmental regulations. The response of firms
regulations was limited to adopting ‘end-of-pipe’ environmental measures.
Hefnawy (2006) Sustainable Development Egypt Cross-section Survey Egyptian SMEs used to show more tolerance in meeting stakeholders'
expectations due to their simple structure and a community-like
culture.
 n-Correa et al. Environmental strategy
Arago Spain SMEs Auto- repair Survey -Environmental strategies and leadership are associated with shared
(2008) and performance vision, stakeholder management, and strategic proactivity
Bos-Brouwers (2009) Sustainable innovation Nether-lands SMEs rubber Conceptual -Sustainable innovation improves eco-efficiency and to -production
cost in SMEs
Rasi et al. (2010) Environmental initiatives Malaysia electric and Survey -Recycling activities, reduce wastes, discharges and emissions are the
in SMEs electronic top environmental strategies.
Clarke-Sather et al. Developing sustainability USA SMEs Case study -SMEs has a different perspective on sustainability than that of large
(2011) indicators Bags company
-SMEs cannot possess enough knowledge to create unbiased
sustainability measurement system. External expertise is needed.
Angeles (2012) Using TOE to analysis Canada Retailing Case study -TOE is an effective framework to examine sustainable packing in
Sustainable packaging Wal-Mart retailing sector
-systems analysis and design, and use of socio-technical approach are
vital for sustainable packing
Schoenherr (2012) Sustainable business Global Plants Survey -using RBV to confirm that environmental management has a
development significant impact on plant performance
Agan et al. (2013) Drivers of environmental Turkey SMEs Survey -Expected Benefits is the most significant driver.
processes Cross-section -ISO 14001 certification facilitates environmental processes
-Government regulations are not an effective way to deal with
environmental pollution and climate change
Bey et al. (2013) Drivers and barriers of EU ns Expert -Main barriers to environmental strategies are lack of knowledge and
environmental strategies opinion resources, while customer demands and competitiveness are the
main drivers
Zhu and Geng (2013) Drivers and barriers of China Plants Survey -Government should enact stricter regulations and strengthen their
extended supply chain enforcement level to influence supply chain practices.
practices - Mimetic and normative drivers motivate manufacturers to
implement sustainable purchasing.
Aboelmaged Predicting e-readiness at UAE Cross-section Survey -TOE is an effective framework to link drivers of innovation adoption
(2014a) firm-level -Technology dimension TOE involves technology infrastructure and
technology competence
Aboelmaged (2014b) Operations performance UAE Cross-section Survey -Organizational capabilities significantly impact operational
and knowledge capability performance
-Delineating 14 operational performance items that reflect cost,
quality, delivery and flexibility
(continued on next page)
210 M. Aboelmaged / Journal of Cleaner Production 175 (2018) 207e221

Table 1 (continued )

Author(s) Theme Country Industry Method Results

Angeles (2014) Using TOEs to analyze g Canada Sport ware Case study -TOE is proved to be helpful in understanding why and how firms
Nike's Green Initiative Nike pursue their sustainability initiatives.
- supplier performance could hasten supplier responsiveness to
sustainability requirements
Hernandez and Ona Green IT ns Outsourcing firm Case study Using TOE formwork to examine green IT adoption
(2014)
Lopes and de Environmental Brazil Furniture Case study -Economic factors determine the way in which the firms respond to
Azevedo (2014) requirements the environmental issues and how adequate their companies
according to laws and regulations.
Woo et al. (2014) Effects of environmental South Korea SMEs Survey -Using NRBV to delineate that environmental innovation can enhance
innovation on labor productivity.
productivity
Madsen and Ulhøi Environmental impact Denmark SMEs Longitudinal -Employees exercise great power over sustainable practices
(2015)
Singh et al. (2015) Impact of ISO 14001 on India Cross section Survey -ISO 14001 certification helped account for a 25% waste reduction in
waste minimization certified SMEs
Zafeirakopoulos and Environmental aspect Turkey Hand blender Case study -Firms need to focus first on energy consumption to
Genevois (2015) selection LCA have a general perspective about the environmental performance of
their product
Bhardwaj (2016) Role of green policy on India Cross section Survey -Using RBV and delineating that environmental policy and the green
GSCM human resource management are the main drivers of GSCM
De Stefano et al. NRBV of innovation ns Automotive Financial -Using NRBV to categorize technological innovations into product
(2016) challenges data stewardship and clean technology.
analysis - Clean technology innovations lead to significant reductions of CO2
emissions from vehicles.
Hwang et al., 2016 Green supply chain Taiwan Semiconductor Case study -Developing a decision framework and explore the causal
adoption relationships among the decision factors concerning green supply
chains adoption
Langwell and Heaton Human resource and USA SMEs Qualitative -Employees’ engagement is the most common activity in
(2016) sustainability interviews implementing sustainability. Training, incentives and recruitment are
underutilized.
Miemczyk et al. Execution of closed-loop EU Multiple Case study -using NRBV to explain the importance of new resources in
(2016) supply chains technology
- strategic resources help companies achieve successful SC designs
Schrettle et al. (2014) Impact of sustainability ns ns Conceptual -Developing a framework concerning the effect of strategic long-term
efforts on performance considerations on strategic decision
-firms' sustainability decisions are influenced by past performance,
firm size and current level of sustainability action.
Hamann et al. (2017) Motives for South Africa SMEs Wine Case Studies -Environmental stewardship and legitimacy-seeking motivate win-
Environmental eries' environmental responsiveness.
Responsiveness

Note: SM, sustainable manufacturing; SMP, sustainable manufacturing practices; GM, green manufacturing; GP, green production; AHP, Analytical Hierarchy Process; LCA, Life
Cycle Assessment; FBS, Fuzzy based system; DSS, Decision support system.

integrated perspective that combines sustainability issues. More-
over, an absence of relevant theoretical frameworks that lay the
foundation for such SM practices, drivers and outcome drivers is
evident. In contrast, the review of pertinent sustainability research
stream indicated that using RBV or its natural extension (NRBV) are
relevant theoretical frameworks for studying sustainability issues.
Also, the technology-organisation-environment (TOE) framework
has been applied to group various sustainability factors and drivers.
Diverse research contexts including both large plants and SMEs are
also observed. Researchers articulated a need for further SM
research within the context of SMEs that link SME's adoption of
SMP to performance benefits (Agan et al., 2013).
Table 1 shows that case study using a single setting is a domi-
nating method in SM research. There is insufficient room for other
types of research methods, such as cross-sectional survey, that can
capture the status of sustainability practices in various settings at a
specific point in time. Similarly, SM research has mainly focused on
the context of western and Asian countries, while other
geographical contexts (e.g., Africa) have received minor attention.
Geographical attention seems to be balanced in sustainability
research in general. Although this review does not claim to be
inclusive, it provides reasonable insights into the current trends in
SM research compared to sustainability research in general.
1.1. Problem statement
Despite recent SM research, there have been limited studies in
SMEs concerning the drivers, practices and impact on their
competitive capabilities when using SM. In addition, the use of a
relevant theoretical framework is lacking in most SM research.
Moreover, SM research has hardly been undertaken in Africa.
Realising the above-mentioned gap, the key objective of this study
is to investigate the impact of technology, organisational and
environmental (TOE) drivers on SMP as well as reviewing the ef-
fects of these practices on the competitive capabilities of a wide
range of Egyptian SMEs by using the PLS-SEM model.
The current understanding of SMP assumes that SMEs are a
particularly pertinent context to study for many reasons. First, global
industrialisation has given SMEs tremendous opportunities to adopt
regulations concerning their environmental responsibilities and
manufacturing standards that lead to less waste (Thanki et al., 2016).
Second, sustainable development pressures such as increasing
energy prices, pollution rates and foreign currency crises urge SMEs
in developing countries to adopt manufacturing paradigms that
allow them to compete globally. This is particularly relevant as SMEs
are responsible for about 64% of industrial environmental impact
(Entr, 2004). Third, there is a great deal of ambiguity concerning
 M. Aboelmaged / Journal of Cleaner Production 175 (2018) 207e221
SMEs’ knowledge of the best ways for sustainable improvement
which is accompanied with a shortage of capital, personnel and
other resources (Chen et al., 2014). Fourth, prior research on the key
drivers and operational outcomes of SM in SMEs in Egypt barely
exists. According to Ramayah et al. (2013), it is vital to validate the
link between implementing SMP and the corresponding perfor-
mance benefits in developing countries. Thus, we may assert that
this study contributes to theory and practice of SM as well as SMEs
research.
1.2. Research objectives
The following objectives guided this study:
a). To identify the landscape of SMEs and their sustainability
efforts in the context of Egypt
b). To relate SM drivers within the TOE framework to SMP
practices
c) To relate SMP to competitive capabilities
d). To test the above-mentioned relationships using the PLS-
SEM model.
In the remainder of this paper, we start by briefly describing the
landscape of Egyptian SMEs and their sustainability efforts and
depicting the natural-resource-based view of the firm (NRBV) as a
theoretical foundation. We then develop the research hypotheses
within the TOE framework and review previous literature in section
three. The research methodology is presented in section four, while
data analysis and results are shown in section five. Reflections on
the research findings are discussed in section six. Building on these
reflections, we conclude by highlighting a number of implications
for managers and policy makers in section seven. Finally, the
limitations of the current research and future research directions
are presented.
2. Theoretical background
Before delineating the main research hypotheses, the theoretical
backdrop of this study is unveiled. It begins by establishing the
landscape of SMEs and sustainability in the context of Egypt. This is
followed by the introduction of the natural-resource-based view of
the firm (NRBV) as a guiding theory emphasising the impact of
firm's resources and capabilities on competitive advantage.
2.1. The landscape of SMEs and sustainability efforts in Egypt
According to a report by the Union of Arab Banks (UAB), Egypt is
considered as one of the largest countries in the Middle East and
Africa with working SMEs in terms of their density and number
(Samir, 2015). Law No. 141/2004, as well as the Egyptian Central
Agency for Public Mobilization and Statistics (CAPMAS), defined
SMEs as any enterprises having less than 50 employees (small) or
between 51 and 99 employees (medium) (MOPIC, 2012). There are
approximately 2.46 million SMEs operating in the trade, services,
manufacturing, and construction sectors in Egypt that comprise
more than 95% of the private sector and contribute about 80% of the
GDP of the country (CAPMAS, 2013). They also accommodate over
6.3 million workers that account for approximately 70% of the
labour force (Samir, 2015). Trading appears to be the most impor-
tant sector among small enterprises as it accounts for 57%, whereas
transformational industries represent 16% of the activities, and
other activities represent 27%. This composition varies if we look at
medium enterprises, where transformational industries account for
27% of the activities of SMEs, trading represents 22%, and other
activities comprise 51% (CAPMAS, 2013). From the ownership
211
perspective, about 60% of Egyptian SMEs are owned and run by one
individual (i.e., sole-proprietorship) where there is no legal
distinction between the owner and the business (El-Said et al.,
2014).
Accordingly, the enterprise's owner obtains all net profits and
has full responsibility for losses and debts which, in turn, limits
risks to all investors. Other main ownership forms of Egyptian SMEs
include joint liability and partnership in commendam.
Realising the important role played by SMEs in developing and
supporting the Egyptian economy, the sustainable development of
SMEs should be a vital part of Egypt's sustainability strategy for
2030 (MOIC, 2015), where sustainable manufacturing is considered
as a high priority in promoting energy efficiency, waste manage-
ment, water saving, renewable energy, sustainable storage prac-
tices, and sustainable innovation (MOE, 2016). Although Egypt is
not among the largest global contributors to greenhouse gas (GHG)
emissions, yet it is among the highest in Africa with 2.6 metric
tonnes CO2 of which industrial operations are responsible for 29%
in 2005 and are expected to be elevated to 36% by 2030 (IMCe
McKinsey, 2010). Historically, the environmental policy of the
Egyptian government seeks to achieve environmental protection
through the establishment of proper frameworks at the national
and regional levels. For instance, the Egyptian Environmental
Affairs Agency (EEAA) was established in 1982 to be responsible for
applying environmental measures and controlling pollution. This is
followed by the ratification of law 4/1994 and its executive clarifi-
cation no. 338/1995. This law made the EEAA in charge of activating
environmental actions regarding standards of air emission, coastal
zone management, land- and marine-based pollution, and disposal
and treatment of hazardous waste (Abdel Wahaab, 2003). The
period 1999e2000 witnessed another environmental initiative that
was adopted by the Ministry of State for Environmental Affairs
(MSEA) to introduce cleaner technological practices and reduce
pollution loads in five new industrial cities through various
mechanisms involving funding and transfer of environmentally
sound technologies (EST), increasing awareness and the pressure of
media and NGOs, in-house training and development, and coordi-
nating efforts with other governmental and private institutions
(Mobarak, 2001). In 2007, Article 59 was added to the 1971
constitution revealing that “safeguarding the environment is a
national duty”.
Afterwards, further articles have been added to the 2012
constitution, following the outbreak of the Arab spring uprising,
concerning the right to have a healthy and undamaged environ-
ment as well as enforcing the state's commitment to protect natural
resources and safeguard the nation from pollution in everyday life.
Finally, the 2014 constitution recognised the citizens' right to a
healthy environment and broadened the state's commitment to
support research related to water security (article 44), renewable
energy sources (article 32), and to protect natural resources in a
way that fulfils sustainable development and ensures the rights of
future generations (article 46). However, five years after the Arab
spring in 2011, Egypt's environmental performance has yet to
recover since most of the regulations and plans have remained at a
standstill.
2.2. Natural-resource-based view of the firm (NRBV)
The natural-resource-based view of the firm (NRBV) (Hart, 1995)
is an extension of the resource-based view of the firm (RBV)
(Wernerfelt, 1989) that emphasises the role of the firm's resources
and capabilities in establishing its competitive advantage. NRBV
research has asserted that the firm's interaction with its natural
environment through sustainable development, pollution preven-
tion and product stewardship is a source of competitive advantage
212 M. Aboelmaged / Journal of Cleaner Production 175 (2018) 207e221
(Hart, 1995). Thus, firms should focus on resources and capabilities
that facilitate this interaction. For example, removing pollutants
and preventing waste will decrease cost and enhance efficiency
throughout the entire value chain of the firm. In addition, the NRBV
appreciates pressures from stakeholders that reflect the “environ-
ment voice” which can be successfully combined with the firms'
functions and processes to achieve sustainable development.
NRBV has attracted the attention of researchers in various dis-
ciplines. For instance, based on NRBV, Menguc and Ozanne (2005)
found a positive impact on the natural environmental orientation of
the firm on profit and market share in Australian manufacturing
firms. Fraj et al. (2013) used NRBV to analyse the influence of green
marketing strategies on B2B performance. They confirmed the
significant impact of managers on designing and developing green
marketing strategies through the integration of environmental
values into the organisational culture. Recently, De Stefano et al.
(2016) applied NRBV as a basis to categorise technological
innovations and validate their impact on reducing vehicles’ CO2
emissions. Similarly, Miemczyk et al. (2016) used NRBV to explain
the vital role of technology and knowledge to address successful
changes in the strategic supply chain. NRBV has also been applied in
the SME context. Arago  n-Correa et al. (2008) found that Spanish
SMEs demonstrated organisational capabilities (i.e., strategic pro-
activity, stakeholder management and shared vision) that are
associated with environmental leadership, pollution prevention
and regulatory compliance which, in turn, lead to enhanced
financial performance. Likewise, Aragon-Correa and Matias-Reche
(2010) drew on NRBV to define the advantages and disadvantages
of SMEs while facing the environmental challenges at micro and
macro levels. Recently, Woo et al. (2014) used NRBV to examine the
effect of environmental innovation on labour productivity in
Korean SME manufacturers. They showed that environmental
innovation can be used as a green business strategy in SMEs to
enhance labour productivity.
3. Research hypotheses
The research hypotheses are organised into four groups. Six
hypotheses related to the impact of SM drivers according to the TOE
framework are firstly delineated in three groups, while the final
group covers four hypotheses concerning the impact of SMP on
competitive capabilities. The following section introduces the TOE
framework.
3.1. Technology, organisation, and environmental (TOE) framework
The TOE framework has been developed by DePietro et al.
(1990) to reflect three contexts through which a firm implements
innovative practices. The technological context reflects technical
infrastructure, processes and capabilities that influence the
implementation of innovative practices, while the organisational
context involves resources and interactions concerned with the
new innovation. The environmental context reflects external
aspects such as competition, stakeholder pressures and the regu-
latory environment that influence the new innovation. According to
the TOE, a firm can effectively implement innovative practices
when the right balance of internal and external drivers can be
established. One of the key advantages of the TOE framework is its
flexible nature to reflect a taxonomy of factors that stimulate or
hinder the implementation of various types of innovations
(Aboelmaged, 2014a). However, studies that have used the TOE
framework in sustainability research is scarce. Current examples
involve the green supply chain (Hwang et al., 2016) and green IT
initiatives (Hernandez and Ona, 2014). Based on the preceding
argument, identifying the key drivers of SMP using the TOE
framework is an apt choice due to its generic nature and applica-
bility across a wide variety of contexts. The framework is also
appropriate as the theoretical foundation for diagnosing sustain-
able initiatives and practices (Angeles, 2012, 2014). The following
section will elaborate on the technological, organisational and
environmental drivers of SMP and develop research hypotheses.
3.2. Technology drivers of SMP
Advanced technology has a vital impact on sustainable initia-
tives from different perspectives. Aboelmaged (2014a) divided the
technology dimension in the TOE into two factors involving
technology infrastructure and technology competence. Technol-
ogy infrastructure is concerned with information and communi-
cation (ICT) platforms, hardware, software, networking, and smart
devices, while technology competence, on the other hand, reflects
the knowledge, expertise and skills required to effectively utilise
the components of technology infrastructure. Routroy and Kumar
(2016) contended that technology applications are key anteced-
ents for implementing green practices in manufacturing organi-
sations. Technology infrastructure can also make manufacturing
operations such as material movement in the production line,
power transmission, water management and waste control more
sustainable through reducing the consumption of energy and
cost of operations as well as increasing the throughput ratio.
Chuang and Yang (2014) indicated that green design, green
manufacturing processes, and green packaging are a result of
advanced applications and innovation. ICT, for example, is capable
of improving operations' safety and traceability. Smart devices, on
the other hand, allow for better use of energy in buildings,
transportation, machine operations, the performance of appli-
ances and logistics. With regard to technology competence,
Ifinedo (2011) assumed that when technology competence con-
cerning specific innovative practices is high, firms are more
inclined to effectively implement these practices. This can also be
applied to SMP when technical knowledge and expertise related
to sustainable technologies are high. For example, promoting
technical knowledge and skills concerning pollution, waste pre-
vention, and the value of green technology are essential drivers of
firm's sustainable practices (Bhardwaj, 2016). Technical knowl-
edge competence also contributes in enhancing the performance
of green product innovations in manufacturing firms (Wong et al.,
2012). As a result, the following hypotheses are established:
H1a. Technology infrastructure positively impact SMP.
H1b. Technology competence positively impact SMP.
3.3. Environmental drivers of SMP
Environmental regulations have emerged as a key driver of
sustainable practices in many contexts. Regulations guide sustain-
ability policies and processes in organisations and offer guidelines
that shape sustainable behaviours and actions. Section 2 of this
paper shows that Egypt's environmental regulations have been
gradually underpinned by laws, executive orders and ministerial
decrees for the protection and development of many aspects of the
local environment. Government regulations impose direct pressure
over organisations and reflect local and international concerns
regarding clean production, resource utilisation and social
responsibilities. In this regard, it is not surprising that sustainability
research initially recognised the significant influence of govern-
mental regulations on sustainable manufacturing. Roni et al. (2014)
considered that legislation and incentives imposed by the local
government have forced Malaysian manufacturers to consider SMP
 M. Aboelmaged / Journal of Cleaner Production 175 (2018) 207e221
as of high priority. Using the analytical hierarchy process (AHP),
Shankar et al. (2016) and Mittal and Sangwan (2014) analysed
common drivers of green manufacturing in Indian and Malaysian
organisations. They indicated that current and imminent legislation
are one of the top factors that lead to efficient resource utilisation
and clean production in manufacturing organisations. This notion is
also supported by Govindan et al. (2015) who drew on a fuzzy
multi-criteria approach to revisit the link between compliance with
regulations (e.g., ISO 14001) and maintaining green manufacturing
processes. With regard to the sustainable supply chain, Zhu and
Geng (2013) contemplated regulations as coercive pressures that
have the potential to force the implementation of supply chain
practices in Chinese factories.
Researchers have also highlighted the contribution of environ-
mental pressures that are brought about by the power of customers,
media, competitors, suppliers, investors, and non-governmental
organisations, etc. that affect an organisation's decisions to imple-
ment sustainability initiatives. For instance, Schrettle et al. (2014)
considered environmental pressures as exogenous factors that in-
fluence an organisations' sustainability practices besides local and
international environmental regulations. Mittal and Sangwan (2014)
revealed that environmental pressures are ranked second by experts
in terms of their influence on sustainable manufacturing. Customer's
environmental concerns, for example, drive firms to make their
products and services green sensitive since customers usually prefer
products that are environmentally friendly (Roni et al., 2014). Simi-
larly, pressure from non-governmental and voluntary organisations
supported by public media can play a crucial part in influencing
sustainable practices in organisations in general, and in developing
countries in particular (Schrader et al., 2013). These pressures can
also be extended to drive strategic green initiatives in organisations.
Accordingly, the following hypotheses can be delineated:
H2a. Environmental pressures positively impact SMP.
H2b. Environmental regulations positively impact SMP.
3.4. Organisational drivers for SM
Although we have offered insights into the role of the tech-
nological and environmental drivers in influencing SMP, organ-
isational drivers highlighted by top management support and
employees' engagement in sustainability initiatives provide the
bond that ensures the effectiveness of SMP. Using survey data and
case studies from wine producing SMEs in South Africa, Hamann
et al. (2017) demonstrated that managers' environmental
responsibility is a vital driver for wineries' environmental prac-
tices. Vinodh et al. (2016) identified the mutual relationship as
among the most influential factors that drive the implementation
of a lean sustainable manufacturing system. Their study revealed
that top management commitment is the main force that pushes
SMP in Indian automotive companies. Bhardwaj (2016) used
resource-based theory and value chain analysis to develop a
sustainability strategy model in Indian organisations. His findings
suggested that management support is a key success for executing
sustainable strategies in Indian organisations. In summary, top
managers can stimulate their employees, spread a positive atti-
tude and provide financial support for employing sustainable
initiatives (Agan et al., 2013). In the same vein, employees'
engagement in rethinking traditional manufacturing operations
and their impact on the environment could enhance sustainable
practices by establishing a culture of shared responsibility, control
and goal internalisation concerning sustainability (Yusoff et al.,
2016). Employees’ engagement can also drive sustainable
manufacturing when they affect decisions and champion
213
sustainable efforts at various organisational levels. Thus, the
former argument may lead to the following hypotheses:
H3a. Management support positively impact SMP.
H3b. Employees' engagement positively impact SMP.
3.5. Impact of SMP on competitive capabilities
Competitive capabilities reflect the power of generating supe-
rior value for consumers that outperform competitors. It usually
covers dimensions of competitiveness such as quality, cost, effi-
ciency, delivery, flexibility, innovation, productivity, etc. For the
purpose of our study, we focus only on quality, cost, delivery and
flexibility as the most acceptable measures of competitive capa-
bilities in operations research (Schoenherr, 2012). A firm can enjoy
these capabilities by affording a product or service that meets
customer's expectations, is offered at a low cost, responds to
circumstances and customer's desires and is delivered fast. In their
seminal article, Porter and van der Linde (1995) argued that green
practices are highly associated with competitiveness. Green prac-
tices can lead to vast savings in all types of resources, less down-
time, better utilisation of by-products, safer workplace conditions,
reductions in operations and product handling costs, higher prod-
uct quality, and higher product resale and scrap value (Porter and
van der Linde, 1995). As a result, these enhancements in products
and processes can also increase the flexibility of manufacturing
operations and speed up product and service delivery to customers
(Bhardwaj, 2016). Hence, sustainable manufacturing can yield
valuable products with a high sustainable impact through the
efficient use of resources (e.g., energy, raw materials, and labour)
(Mittal and Sangwan, 2014).
In total, SMP can minimise the cost of production and add value
to the final product with less environmental and social impact (Paul
et al., 2014). Besides, SMP can improve production processes
leading to quality products that satisfy customers' expectations and
help grow an enterprise's market share (Deif, 2011). Ramayah et al.
(2013) examined the impact of SMP in 544 Malaysian SMEs and
indicated that practices such as reducing solid waste have a positive
effect on competitive performance. In their study of 53 companies
from varied sectors in Turkey, Sezen and Çankaya (2013) inferred
that green manufacturing applications positively impact operations
performance through enhancing production efficiency and occu-
pational safety, and minimising production cost. The effects of SMP
are incremental and can boost competitive advantages and profit in
the long term (Agan et al., 2013). Based on the above discussion, we
can hypothesise that SMP has a positive impact on competitive
capabilities as follows:
H4a. SMP have a positive impact on product cost.
H4b. SMP have a positive impact on product quality.
H4c. SMP have a positive impact on product delivery.
H4d. SMP have a positive impact on production flexibility.
Fig. 1 illustrates the proposed research model and hypotheses
based on the former discussion.
3.6. Research methodology
The research methodology is conducted in three phases. The
cross-sectional survey instrument was firstly designed and vali-
dated based on prior research. Then, the instrument was sent to a
stratified random sample of managers in a wide spectrum of SMEs.
Finally, the responses were validated by relevant statistical tests to
ensure their adequacy for further analysis.
214 M. Aboelmaged / Journal of Cleaner Production 175 (2018) 207e221
Fig. 1. Research model. Note: TI, technology infrastructure; TC, technology competence; EP, environmental pressures; ER, environmental regulations; SMP, sustainable
manufacturing practices; MS, management support; EE, employees' engagement; OPC, cost; OPQ, quality; OPD, delivery, OPF, flexibility.
3.7. Instrument development and validity
The survey entails multiple reflective items that are measured
using the Likert scale, ranging from 1 “strongly disagree” to 5
“strongly agree”. Operationalisation of these items is derived from
previous literature which lends high validity to the results (see
Table 2). Items representing SMP are adapted from Despeisse et al.
(2012) and Rusinko (2007). The items reflect the use of energy,
water and materials as well as reducing emissions and the waste of
water and solids. Competitive capabilities are assessed by 14 items
that reflect the cost (OPC), quality (OPQ), delivery (OPD) and
flexibility (OPF) dimensions. The items are adapted from
Aboelmaged (2014b). Environmental regulations (ER) are pre-
sented as two items that reflect the level of national and regional
regulations regarding waste, emissions, cleaner production, etc.,
while the environmental pressures (EP) items include pressures
from customers, media and competitors. Items of both variables are
adapted from Zhu and Geng (2013). Technology infrastructure (TI)
is assessed by three items adapted from Aboelmaged (2014a) to
manifest using information, communication, networking, smart
devices and manufacturing technology. Items measuring technol-
ogy competence (TC) are adapted from Shankar et al. (2016). The
items represent technology skills, training and resources. Man-
agement support (MS) is evaluated using two items concerning top
managers' commitment to reduce waste, save energy and take
necessary decisions to foster sustainability. The items are adapted
from Agan et al. (2013) and Roni et al. (2014). Employees' control
over their work and responsibility for protecting the environment
are used to delineate the employees’ engagement (EE) variable. The
items are adapted from Yusoff et al. (2016). The second part of the
questionnaire is designed to collect demographic information.
Content validity is further assessed following the guidelines of
Cooper and Schindler (2014). A panel of 3 operations management
professors and 12 MBA students assessed the survey. They
suggested minor modifications concerning clarity and the length of
the items. The survey is finally translated from English to Arabic
and then a reverse independent translation from Arabic to English
is applied. Consequently, minor wording modifications are applied
to ensure consistency.
3.8. Data collection
The frame of the SMEs population is originated from datasets of
the Central Agency for Public Mobilization and Statistics (CAPMAS)
and the Egyptian Cabinet Information and Decision Support Center
(IDSC). The sample is drawn from SMEs in Greater Cairo (Cairo and
Giza) and Alexandria that account together for about 38.1% of the
6.3 million employees in Egyptian SMEs (CAPMAS, 2013) and
ensures a variety of manufacturing activities. These governorates
are also occupied with many industrial zones and manufacturing
activities. 300 SMEs were selected by means of stratified random
sampling to reflect various sizes and manufacturing areas including
furniture, food and beverages, textiles, wearing apparel and leather,
wood and upholstering, rubber and plastics, paper and printing,
chemicals and allied products, basic pharmaceutical products, basic
metal products, electronics and optics, building materials and
refractories, basic trailers, machinery and repairs. In addition, the
selected SMEs are screened and revised based on their accessibility
using active contact data (e.g., phone, email, websites, social
media). 600 self-administering questionnaires with cover letters,
that assure confidentiality and aggregation of data, were distrib-
uted to owners and top managers in manufacturing and operations
positions using personal contact (phone calls and face-to-face),
email and even social media to ensure an acceptable response
rate. Follow-up phone calls and email rounds were conducted every
two weeks to maximise the response rate. Of 279 returned ques-
tionnaires, 238 are completed and ready for further analysis,
yielding an acceptable response rate of 39.66% (Hair, 2014). To
 M. Aboelmaged / Journal of Cleaner Production 175 (2018) 207e221 215

Table 2 Table 3
Research constructs. Sample profile.

Competitive capabilities (Aboelmaged, 2014b) Industry n % Respondents n %

OPC1 Overhead cost is low Industry Position
OPC2 Price of goods/services is low Furniture, wood and 18 13.5 Owner/CEO/GM 141 59.2
OPC3 Cost of materials is low upholstering
OPQ1 Our goods/services are of high quality Food and beverages 23 17.3 Manufacturing/OP 62 26.1
OPQ2 Defects in our goods/services are low Manager
OPQ3 Specifications of good/services are appropriate Rubber and plastics 6 4.5 Other 35 14.7
OPQ4 Working conditions and safety are appropriate Paper and printing 13 9.8
OPQ5 Goods/services do not harm the environment Chemicals and 8 6 Experience
OPD1 Delivery of our goods/services is dependable allied products
OPD2 Delivery of our goods/services is fast Basic pharmaceutical 16 12 0e5 39 16.5
OPF1 Amount of goods/services are quickly altered products
OPF2 We introduce new goods/services quickly Basic metal products 12 9 5e10 64 26.8
OPF3 We offer a broad range of goods/services Electronics and optics 7 5.3 > 10 135 56.7
OPF4 We customize goods/services to customer needs Trailers, machinery 8 6
Sustainable Manufacturing Practices (SMP) (Despeisse et al., 2012; Rusinko, and repairs
2007) Building materials and 7 5.3 Gender
SMP1 Reducing energy use refractories
SMP2 Improving water use Textiles, wearing 15 11.3 Male 212 89.07
SMP3 Reducing material use apparel and leather
SMP4 Reducing emissions Female 26 10.93
SMP5 Reducing waste water Size
SMP6 Reducing solid waste Small 79 59.4 Education
Environmental Regulations (Zhu and Geng, 2013) Medium 54 40.6 No formal Education 13 5.4
ER1 Level of national environmental regulations (e.g., waste emissions, School (Primary/ 81 34
cleaner production etc.) Secondary)
ER2 Level of regional environmental regulations (e.g., waste emissions, University 102 42.9
cleaner production etc.) Postgraduate 42 17.6
Environmental Pressures (Zhu and Geng, 2013)
EP1 Extent of environmental pressures from customers
EP2 Extent of environmental pressures from news and media
EP3 Extent of environmental pressures from competitors 10 years of working experience (56.7%) and have at least a
Technology Infrastructure (Aboelmaged, 2014a) university education (60.5%). The respondents’ profile shows that
TI1 Our firm uses information, communication and networking respondents have an adequate position, experience and education
technology
to respond to our survey questions. A significant portion of the
TI2 Our firm uses smart devices and appliances that can be used to save
waste and energy surveyed SMEs are small firms (59.4%). While the sample repre-
TI3 Our firm uses new manufacturing innovations sents a wide spectrum of industrial sectors (11 various sectors), 4
Technology Competence (Shankar et al., 2016) sectors including furniture and wood, food and beverages, basic
TC1 Our employees have the skills to manage new technology and smart
pharmaceutical products, and textiles, apparels and leather account
devices
TC2 Our employees are trained in using new technology and smart devices
for only 54.1% of the total. This distribution reflects that the sample
TC3 Our firm recruits staff with advanced technology skills is not dominated by a particular sector.
Management Support (Agan et al., 2013; Roni et al., 2014)
MS1 Top managers are committed to reduce waste and save energy
MS2 Top managers take necessary decisions to foster sustainability in the 3.10. Data analysis and results
firm
Employees' engagement (Yusoff et al., 2016) The partial least squares approach to structural equation
EE1 Our employees have control over their work modelling (PLS-SEM) using the SmartPLS 3.0 software is applied to
EE2 Our employees share the responsibility for sustainability
EE3 Our employees are concerned with protecting the environment
analyse the research data through two phases involving assessing
the measurement model and testing the structural model.

ensure the adequacy of the responses, preliminary t-tests were
conducted following Armstrong and Overton's (1977) and Lohr's
(2010) extrapolation procedures for non-response bias. The inde-
pendent sample t-test between late and early returned responses is
found to be insignificant (p ¼ 0.21, 0.26 and 0.15, respectively).
Additionally, a truncated version of the questionnaire is randomly
sent again to 200 non-respondent managers via email, and were
followed-up on a weekly basis to secure a comparative non-
response sample. The t-test between the earliest 30 complete
responses from non-respondents and the original respondents'
answers concedes an insignificant difference (p ¼ 0.26, 0.12 and
0.18, respectively). Accordingly, non-response bias cannot be
considered as a critical issue.
3.9. Respondents’ profile
Table 3 shows that the majority of respondents are owners,
CEOs or general managers (59.2%) who are male (89.07%) with over
3.11. The measurement model
Hair (2017) indicated that PLS-SEM was originally designed
for prediction purposes so that it is preferred over covariance-
based SEM software (e.g., AMOS). PLS-SEM is also less sensitive
to sample size so that multivariate normal sample data is not
strictly necessary (Henseler and Sarstedt, 2013). Moreover, the
results of the kurtosis and skewness values of the measurement
model are between ±1 which indicate no violation of normality
assumptions of the sample data. The quality of the measurement
model is also evaluated by various measures. The standardised
outer factor loading for constructed items in Table 4 are
considered highly satisfactory as they exceed the threshold value
of 0.70 (p < 0.001), except for two constructs that are considered
adequate as they exceed the acceptable threshold value of 0.60
(Hair 2017).
Table 5 shows that the values of Cronbach's alpha, composite
reliability (CR) and rho_A are greater than 0.709 which indicates
the acceptable internal reliability of all variables (Straub et al.,
216 M. Aboelmaged / Journal of Cleaner Production 175 (2018) 207e221

Table 4
Standardized factor loading.

EE EP ER MS OPC OPD OPF OPQ SM TC TI VIF

EE1 0.714 1.208

EE2 0.810 1.274
EE3 0.757 1.289
EP1 0.981 2.002
EP2 0.730 2.046
EP3 0.635 2.297
ER1 0.856 1.208
ER2 0.825 1.208
MS1 0.928 1.853
MS2 0.903 1.853
OPC1 0.774 1.217
OPC2 0.757 1.280
OPC3 0.711 1.169
OPD1 0.888 1.474
OPD2 0.882 1.474
OPF1 0.805 1.729
OPF2 0.860 1.967
OPF3 0.739 1.655
OPF4 0.790 1.769
OPQ1 0.814 1.877
OPQ2 0.713 1.527
OPQ3 0.805 1.852
OPQ4 0.783 1.697
OPQ5 0.767 1.772
TC1 0.858 1.761
TC2 0.863 1.809
TC3 0.817 1.630
TI1 0.756 2.079
TI2 0.865 2.045
TI3 0.923 1.835
SM1 0.729 2.025
SM2 0.808 2.514
SM3 0.665 1.700
SM4 0.872 3.192
SM5 0.866 3.717
SM6 0.708 2.100

Table 5
Reliability and validity measures.

Variable Cronbach's alpha rho_A CR AVE EE EP ER MS OPC OPD OPF OPQ SM TC TI

EE 0.709 0.75 0.805 0.579 0.76

EP 0.732 0.72 0.810 0.591 0.25 0.77
ER 0.765 0.91 0.867 0.769 0.18 0.24 0.88
MS 0.808 0.82 0.912 0.839 0.19 0.10 0.06 0.92
OPC 0.772 0.71 0.792 0.560 0.33 0.37 0.10 0.19 0.75
OPD 0.724 0.72 0.879 0.784 0.43 0.45 0.00 0.14 0.46 0.89
OPF 0.813 0.83 0.876 0.639 0.38 0.38 0.04 0.26 0.37 0.62 0.80
OPQ 0.836 0.84 0.884 0.604 0.52 0.58 0.09 0.18 0.58 0.71 0.60 0.78
SM 0.867 0.88 0.902 0.606 0.57 0.50 0.09 0.34 0.49 0.63 0.57 0.76 0.78
TC 0.802 0.81 0.883 0.716 0.01 0.02
0.02 0.12 0.06 0.10 0.06 0.04 0.13 0.85
TI 0.839 0.94 0.886 0.724
0.09
0.04 0.05
0.28
0.10
0.05 0.03
0.08
0.12
0.18 0.85

Notes: EE, employees' engagement; EP, environmental pressures; ER, environmental regulations; MS, management support; OPC, cost; OPD, delivery, OPF, flexibility; OPQ,
quality; SM, sustainable manufacturing; TC, technology competence; TI, technology infrastructure. The square roots of the AVE are shown as italic values along the diagonal
line.

Table 6
2004). In addition, the minimum average variance extracted (AVE)
Heterotrait-monotrait ratio (HTMT).
value (0.560) surpasses the required cut-off value of 0.5 (Henseler
et al., 2016), which reveals an adequate convergent validity level. EE EP ER MS OPC OPD OPF OPQ SM TC
Additionally, we follow the Fornell and Larcker (1981) criterion to EE
assess discriminant validity. The square root of the AVE (italic di- EP 0.38
agonal elements), as shown in Table 5, are higher than the inter- ER 0.25 0.45
MS 0.25 0.16 0.11
construct correlations. Henseler et al. (2015) devised another OPC 0.54 0.55 0.21 0.28
measure of discriminant validity using Monte Carlo simulation (i.e., OPD 0.63 0.62 0.06 0.19 0.68
Hetrotrait Monotrait correlations) (HTMT) with a threshold value OPF 0.52 0.47 0.09 0.31 0.50 0.79
less than 0.90. Table 6 shows that 0.88 is the greatest HTMT cor- OPQ 0.70 0.73 0.11 0.23 0.80 0.88 0.71
SM 0.76 0.60 0.08 0.40 0.67 0.80 0.67 0.88
relation ratio which establishes an acceptable discriminant validity
TC 0.09 0.10 0.09 0.15 0.14 0.13 0.13 0.11 0.17
level and reflects a satisfactory quality level of the measurement TI 0.09 0.12 0.11 0.32 0.17 0.06 0.10 0.12 0.13 0.23
 M. Aboelmaged / Journal of Cleaner Production 175 (2018) 207e221 217

Fig. 2. Structural model with path coefficients (b) and adjusted R2 values Note: TI, technology infrastructure; TC, technology competence; EP, environmental pressures; ER,
environmental regulations; MS, management support; EE, employee engagement; SMP, sustainable manufacturing practices; OPC, cost; OPQ, quality; OPD, delivery, OPF, flexibility.

model. technology drivers positively impact sustainable manufacturing in

SMEs. As Table 7 shows, the impact of technology infrastructure
(b ¼ 0.021, t ¼ 0.29, ns) and technology competence (b ¼ 0.099,
3.12. Testing the structural model
t ¼ 1.43, ns) are not significant. Thus, H1a and H1b are not supported.
With regard to environmental drivers, we have found that envi-
According to Henseler and Sarstedt (2013), the standardised
ronmental drivers partially support sustainable manufacturing in
path coefficients and R2 values of endogenous latent variables
SMEs through the significant effect of environmental pressures
determine the quality of the structural model and its predictive
(b ¼ 0.392, t ¼ 6.89, p < 0.001). This provides stronger support to
competence. The bootstrap method with 1000 subsamples using
hypothesis H2a. Unexpectedly, we found a negative and insignificant
the SmartPLS 3.0 software is applied to test the direction, strength
effect of environmental regulations on sustainable manufacturing in
and significance of the hypothesised path coefficients. SEM-PLS
SMEs (b ¼ -0.099, t ¼ 1.41, ns) which denotes no support for
indices for model fit include SRMR ¼ 0.0744 (<0.08), dULS ¼ 0.679
hypothesis H2b. Organisational drivers show a strong impact on
(<0.95), dG ¼ 0.852 (<0.95), Chi-Square ¼ 0.972 and NFI ¼ 0.833
sustainable manufacturing which explains a great deal of its vari-
demonstrate a significantly reliable and adequate fit (Henseler
ance. Both management support (b ¼ 0.218, t ¼ 2.54, p < 0.01), and
et al., 2016). Fig. 2 indicates that 50 percent of the variance,
employees’ engagement (b ¼ 0.448, t ¼ 6.86, p < 0.001), positively
adjusted R2, in sustainable manufacturing is explained by three
and significantly influence sustainable manufacturing as assumed,
factors (t ¼ 6.742, p < 0.001). Hypotheses H1a and H1b predicted that
supporting hypotheses H3a and H3b. Hypotheses H4a, H4b, H4c and
H4d capture the effect of SMP on competitive capabilities. The
Table 7 hypotheses are all significant at p < 0.001 where R2 ¼ 24%, 0.57%, 40%
Path coefficient and t-values of the structural model. and 32%, respectively. The coefficients of sustainable manufacturing
Hypothesis Path b t-value Result are positive and significant for cost performance (b ¼ 0.492, t ¼ 6.79,
p < 0.001), quality performance (b ¼ 0.759, t ¼ 16.17, p < 0.001),
H1a TI / SM 0.021 0.29 Not supported
H1b TC / SM 0.099 1.43 Not supported
delivery performance (b ¼ 0.633, t ¼ 11.31, p < 0.001) and flexibility
H2a EP / SM 0.392 6.89** Supported performance (b ¼ 0.572, t ¼ 9.40, p < 0.001).
H2b ER / SM
0.099 1.41 Not supported
H3a MS / SM 0.218 2.54* Supported
H3b EE / SM 0.448 6.86** Supported 4. Discussions
H4a SM / OPC 0.492 6.79** Supported
H4b SM / OPQ 0.759 16.17** Supported Drawing on NRBV theory and the TOE framework, this study
H4c SM / OPD 0.633 11.31** Supported introduces a model that extends our knowledge regarding the
H4d SM / OPF 0.572 9.40** Supported
drivers of SMP in SMEs and their impact on cost, quality, delivery
218 M. Aboelmaged / Journal of Cleaner Production 175 (2018) 207e221
and flexibility as dimensions of competitive capabilities. An anal-
ysis of survey data from 238 respondents yielded important results
that provide support for the influence of the organisational drivers
and environmental pressures on SMP. In contrast, the results show
no support for the effect of technology drivers on SMP, while the
influence of environmental drivers is partially maintained. With
regard to the consequences of SMP, the findings demonstrate a
positively significant impact on competitive capabilities of SMEs.
These findings, while partially supporting our hypotheses, provide
intriguing insights, especially when compared to the results of prior
research.
First, as for the effect of technology drivers on SMP, our result
did not confirm their significance in influencing SMP. This is
inconsistent with previous research (e.g., Routroy and Kumar,
2016) which perceived that technology infrastructure and com-
petencies tend to have no influence on SMP. A potential expla-
nation is the lack of technical capacity of SMEs, particularly in
developing countries, to recognise, evaluate and take advantage of
opportunities associated with sustainability. Hefnawy (2006)
argued that a large segment of Egyptian SMEs depend on tradi-
tional manufacturing tools and methods that were inherited from
previous generations and gradually developed over the long-run.
He further concluded that associations between Egyptian SMEs
and technology vendors are immature owing to SMEs’ poor
capacity (Hefnawy, 2006). Also, limited access to financial
resources, following the outbreak of the Arab spring in 2011, may
have negatively affected the allocation of technical resources
toward SMP.
Second, our result suggests that while environmental pressures
from customers, competitors and media significantly influence SMP
in Egyptian SMEs, environmental regulations do not. This result
contradicts prior research that patronises the role of environmental
laws and rules in influencing SMP (e.g., Shankar et al., 2016). A
plausible interpretation of this finding is the weak enforcement of
environmental laws in Egypt. For example, Ramadan and Nadim
(2004) argued that environmental laws concerning hazardous
waste were halted, not only due to the lack of necessary funds being
allocated but more importantly because of the lack of an institu-
tional framework to enforce these laws at higher levels of authority,
as a top priority. In addition, there is a lack of technical capacity
within the higher environmental authority in Egypt to monitor and
coordinate environmental legislations (Mobarak, 2001). “It seems
that the environmental regulation enforcement authorities did not
wish to be ‘tough’ on the industries in this regard for justifiable
social and economic reasons” (El-Zayat et al., 2006: p. 213). In the
same vein, previous research also found environmental regulations
hardly play any role in regulating SMEs such as Hamann et al.
(2017) study on wine producing SMEs in South Africa.
With regard to the impact of stakeholder's environmental
pressures on SMP, the finding is in harmony with other researchers
(e.g., Schrettle et al., 2011) who emphasised the significant impact
of customers, suppliers, media and other stakeholders on imple-
menting SMP. One may argue that many SMEs are subcontractors to
large firms, so they are not under direct stakeholder pressures to
adopt SMP. A contrary interpretation of this argument contem-
plates the nature of Egyptian SMEs where their locations are
scattered across Egyptian governorates, they comprise more than
95% of the private sector and contribute about 80% of the Egyptian
GDP. These features show that they are actually accountable for a
notable environmental impact that attracts the attention of various
stakeholders. Additionally, Egyptian SMEs used to show more
tolerance in meeting stakeholders' expectations due to their simple
structure and a community-like culture (Hefnawy, 2006).
Third, the results confirm prior research concerning the signif-
icant impact of organisational drivers on SMP (e.g., Vinodh et al.,
2016). For SMEs, employees' engagement and top management
support are vital for the effective implementation of sustainable
programs (Langwell and Heaton, 2016). In developed countries,
SMEs' employees exercise great power over sustainable practices as
a result of local authorities' adoption of a dialogue-based rather
than a control-based approach concerning sustainable programs at
work, as in the case of adopting environmental health and safety
schemes in Denmark (Madsen and Ulhøi, 2015). However, this
impact within a developing country context may have an alternate
interpretation. Egyptian SMEs are mainly owned and run as sole-
proprietorships where there is no legal distinction between the
owner and the business. Accordingly, managers are likely to influ-
ence the enterprise’ ethos and the implementation of sustainable
practices as a result. Likewise, the limited number of employees,
smaller and flatter organisational hierarchies, and an informal
working culture allow for effective knowledge transfer among all
members and upsurge their engagement to make swift decisions
concerning sustainability programs. Though Egyptian SMEs lack
financial and technological capabilities, their managers and
employees tend to recognise and influence SMP to a great extent.
Fourth, the findings are similarly in line with our hypotheses on
the influence of SMP on competitive capabilities. The findings
confirm past research on the impact of sustainable practices on
cost, quality, flexibility and delivery (e.g., Schoenherr, 2012).
Though there are various constraints facing SMEs in developing
countries, SMP tends to be valuable in promoting competitive
performance, which in turn, can reduce the effect of these con-
straints over the long term. This is in line with Schoenherr (2012)
who confirmed that the impact of environmental initiatives on
quality, cost, flexibility and delivery is greater in enterprises located
in developing countries when compared to enterprises located in
industrialised countries. This is also in line with the NRBV (Hart,
1995) that strongly bonds environmental initiatives in product
design, production processes, packaging, quality control, delivery,
sourcing, etc. to competitive advantages, which can be facilitated by
the flexible nature and structure of SMEs.
5. Conclusions
Understanding the drivers and outcomes of sustainable prac-
tices is an essential quest at the heart of sustainability research. In
contrast to previous studies, this paper is an early attempt to
examine SMP in the Egyptian context. The study also contributes to
the existing body of sustainable manufacturing literature by
expanding our knowledge about key drivers of SMP in SMEs and
introducing the TOE framework to delineate the tenets of these
drivers. Another significance of this study is linking SMP to
competitive capabilities. This link has been barely established in
previous sustainable manufacturing research. Drawing upon the
NRBV, as an underlying principle, and synthesised with previous
research, we proposed a research model that posits the impact of
six drivers (i.e., technology infrastructure, technology competence,
environmental pressures, environmental regulations, management
support and employees’ engagement) on SMP, and the impact of
these practices on four competitive capabilities (i.e., cost, quality,
delivery and flexibility).
The model is empirically validated by means of the PLS-SEM
method using data from 238 owners and managers from a wide
spectrum of Egyptian SMEs. This study demonstrates that envi-
ronmental pressures, management support and employees'
engagement predicts SMP in Egyptian SMEs. In contrast to existing
literature, this study establishes that technology infrastructure,
technology competence, and environmental regulations do not
significantly influence SMP. Interestingly, the relationship between
SMP and competitive capabilities of Egyptian SMEs is positively
 M. Aboelmaged / Journal of Cleaner Production 175 (2018) 207e221
significant which supports the contribution of SMP to enhance
firms' competitive performance. From a managerial perspective,
the present research offers policy makers and managers a frame of
reference to boost SMP in the context of SMEs not only to patronise
managers' and employees' environmental responsibility towards
various pressures from customers, suppliers and public media but
also to encourage their engagement in developing sustainable
programs. Therefore, increasing managers' awareness, knowledge
and specialised training concerning sustainability issues in SMEs
will be of great importance. Furthermore, Egyptian environmental
authorities need to establish an institutional framework and
organizational capacity that reflect SMEs’ variations and feedback
to enforce the implementation of environmental regulations. So
that, accessing, monitoring and reporting actual environmental
data by the managers of SMEs will no longer be a difficult process
that is scattered among numerous authorities. Great prospects are
also expected from sustainable manufacturing technology when
the government considers SMEs capacity building by matching
technology investments with actual sustainability needs whilst
monitoring the SMEs role in creating sustainable value at a strategic
level.
6. Limitations and future research directions
Although this study provides new insights into SMP in SMEs, the
work still has inherent limitations related to data collection and
generalisation. First, it is suggested that future research on SMP
should use a larger sample to better validate the current study in
different settings, which further contributes to sustainable
manufacturing in organisations. Second, snapshot survey research
does not reflect a deep understanding of the context, as in the case
of Egyptian SMEs, when compared to theory building methods.
Therefore, future research should follow a constructive research
perspective where reality is created by actors when trying to
discover and understand sustainable manufacturing issues (e.g., the
role of culture) in similar contexts. Third, it is worth revealing that
the impact of environmental regulations and technology drivers on
SMP necessitate more exploration, and/or comparison between
SMEs and large enterprises to confirm or refute their effect. Fourth,
with regard to the consequences of SMP, the study does not reflect
the single impact of each SMP on competitive capabilities. Thus,
further research may bring more insights into the relative impor-
tance of each practice. Fifth, although the PLS algorithm considers
model complexity, discrepancies and uncertainties in the model-
ling process concerning structural parameters, distributional
characteristics, the number of reliable indicators and measurement
errors may allow for the application of other approaches that take
these uncertainties into consideration. For example, forthcoming
research may develop an alternative model using a generic pro-
gramming method which can capture dynamic non-linear
relationships between the input and output data (Panda et al.,
2016; Garg et al., 2016) and compare the results to those
mentioned in our study. Finally, upcoming research may use actual
performance outcomes rather than self-reported or perceptual data
when examining post-implementation practices to gain a true and
substantial understanding of the impact of SMP.
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