EFFECT OF GREEN SUPPLY CHAIN MANAGEMENT ON ORGANIZATIONAL PERFORMANCE AMONG TEA PROCESSING FIRMS IN KERICHO AND BOMET COUNTIES IN KENYA

ABSTRACT 
The aim of this study was to investigate the effect of Green Supply Chain Management (GSCM) on Organizational Performance among tea processing firms in Kericho County. The objectives of the study were: to investigate the effect of Green Purchasing on Organizational Performance, to establish the effect of Green Manufacturing on Organizational Performance, to investigate the effect of Green Distribution on Organizational performance, to examine the effect of Green Marketing on Organization Performance and to investigate the effect of Reverse logistics on Organizational Performance. The study adopted a correlational study design and was a census survey. Data was collected from 32 tea processing firms in Kericho and Bomet Counties and analyzed using SPSS. The respondents for this study were Factory managers and Environmental representatives. Multiple regression model was developed and used to establish the effect of GSCM on Organizational Performance. Correlation analysis coupled with single tailed significance test was conducted to test each hypothesis. ANOVA test was used to determine the level of significance of the relationship between the variables. The results were presented using tables. The study established that GSCM has positive effect on organizational performance. The study therefore recommends that managements of tea processing firms and other manufacturing firms adopt GSCM practices. The study suggests that further studies should be conducted in other processing firms other than tea processing firms. Further studies should also be done to relate GSCM with other variables like quality and customer services as well as to explore other GSCM practices other than green purchasing, green manufacturing, green distribution, green marketing and reverse logistics.

CHAPTER ONE 
INTRODUCTION 
Background of the study 
There has been increasing environmental concern from the government and the general public in the recent past and even today. Much of this concern has been on the impact of corporate activities on the natural environment. This is due to the negative impacts some of these activities have on the environment such as global warming and scarcity of some critical resources. This has led to environmental management becoming a critical business consideration for any company that aims to survive from many regulations and tough business requirements. (Yoon et al 2010). Nimawat and Namdev (2012) argued that organizations and people must adopt environmentally responsible production and consumption in order to recover environmental quality, reduce poverty and bring about economic growth, with resultant improvements in healthy working conditions, and sustainability. Every organization including tea processing firms must put measures in place to ensure all dimensions of its operations are environmentally friendly. 

According to Pietro et al (2012), every organization must make better use of natural resources for sustainable growth. Every organization must incorporate environmentally friendly practices in all its activities. Just like other business activities, Supply Chain activities are no exception. Since the early 1990‟s, manufacturers have been forced to address Environmental Management in their supply chains (Wu et al, 2012). Being environmentally conscious in supply chain operations is not only associated with reduced negative impacts on the environment but also improvement in overall company performance (Green et al, 2012). While many organizations have in the past have concentrated on reverse logistics, there is need to adopt green supply chain management (GSCM) practices that looks at the entire supply chain. (Chang 2013) 

Dheeraj (2012) defined GSCM as the practice of monitoring and improving environmental performance in the supply chain by integrating environmental thinking into a supply chain management throughout a product‟s life cycle. As put forward by Manufacturing Research Centre of Michigan State University, GSCM ensures that every agent in the supply chain: suppliers, manufacturers, vendors and consumer and all the processes involved in the entire life of a product: material acquisition, processing, package, transportation and waste processing have no negative impact on the environment. (Bin & Jun, 2009). This is achieved through total integration and coordination of all business processes: purchasing, manufacturing, marketing, logistics, and information systems and strategy alignment of customer focus, efficiency, quality, and responsiveness (Zelbst et al. 2009), and environmental sustainability (Green et al, 2012) throughout the supply chain. 

Green Supply Chain Management 
GSCM is an emerging concept from the traditional Supply Chain Management. Its development can be traced back to late 1980s during the quality revolution and the Supply Chain Revolution in early 1900s when organizations started seeing the need of being environmentally conscious (Srivastava, 2007). According to Ageron et al, (2011), GSCM is the strategic, transparent, integration and achievement of an organization‟s social, environmental, and economic objectives in the systemic coordination of key inter-organizational business processes for improving the long-term performance of the firm and its supply chain partners. 

Toke et al (2012) defined GSCM as a systematic integrated process, from raw material to finished product, up to customers to disposal aimed at protecting the environment from degradation and to improving productivity and profitability. It aims at producing more friendly output from less input through clean manufacturing while integrating economic development, social progress and ecological balance. To Mefford (2011), it is a way of creating economic value through harmonization and control of flow of material, capital, information and work in the product‟s life. Achieving GSCM requires working closely with customers and suppliers, analyzing internal business operations and processes and considering environmental factors in the entire life cycle of a product. (Hasrulnizzam et al, 2013) 

Dheeraj and Vishal, (2012) discussed four major practices of GSCM. These are green purchasing, green manufacturing and materials management, green distribution and marketing and reverse logistics. Green and Zelbst (2012) on the other hand discussed internal environmental management, green information system, green purchasing, cooperation with consumers, eco design and investment recovery while Ninlawan et al (2010) discussed green procurement, green manufacturing, green distribution, and reverse logistics. Irrespective of how the researchers group these practices. An outstanding fact is that the all aim at achieving sustainable operations throughout the organizations. 

Organizational Performance 
As pointed by Pierre et al. (2012) organizational performance comprises three specific areas: financial performance, market performance and shareholders return while to Rha (2010) it is the ability of an organization to achieve high efficiency, high level of customer service and ability to respond to changing business environment. Teuteberg and Wittstruck (2010) on the other hand identified three dimensions of organizational performance. These are environmental performance, economic performance and social performance. A number of studies that have looked at GSCM and organizational performance have focused on operational performance, economic performance, environmental performance and social performance. An understanding of the parameters of organizational performance is paramount in measuring the general organizational performance and effectiveness. This study focused on operational performance, environmental performance and social performance. 

Tea Manufacturing Firms in Kenya 
In Kenya, tea is grown mainly as a cash crop sold both locally and internationally. According to Der wal (2011), Kenya is at third position in global tea production and second position in tea export accounting for 20% of tea exported in the whole world. Much of the tea is grown in the Kenyan Highlands located on the West of the Rift Valley with some grown on highlands east of the Rift Valley as well as in central Kenya. About 60% is grown by small scale farmers with about 40% being grown by large scale privately owned estates. The major tea producers in Kenya, among others are: Kenya Tea Development Agency (KTDA), Unilever Tea Kenya Ltd , James Finlays Kenya limited, Eastern Produce Kenya limited and George Williamson Tea Kenya limited. There are 107 registered tea processing firms in Kenya (Tea Board of Kenya, 2011). 

In Kericho and Bomet Counties, there are thirty two tea processing firms (factories). Eight of these factories are owned by KTDA. Seven are owned by Unilever Tea Kenya limited while James Finlays Kenya limited owns six, Sotik tea owns two tea factories while George Williamson owns one. The rest are owned privately (Kirui, 2013).

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Item Type: Kenyan Project Material  |  Attribute: 69 pages  |  Chapters: 1-5
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