Key Performance Indicators (KPIs) ··········································· 40

The impact of environmental performance on the adoption of SSCM by companies, both financially and competitively, has been thoroughly analyzed. However, most of these studies have examined it either from a case studies approach (Geffen & Rothenberg 2000), on very limited geographical areas (Zhu & Sarkis 2004), few industrial branches (Zhu et al. 2007a), or from narrow functional silos (Hervani et al. 2005) within the organizations. Moreover, Dubey et al. (2015) have identified that institutional pressures, operational practices, and organizational managers, are seldom observed collectively. When added to the identification by Montabon et al. (2007), that there is a lack of proof about the connection between firm financial performance and its environmental performance, therefore, the question is whether companies present themselves in a better light compared to reality or not (Tate et al. 2010). Some research has demonstrated that commercial performance is positively correlated and directly proportional to environmental performance (Russo & Fouts 1997; Al-Tuwaijri et al. 2004; Montabon et al. 2007; Iraldo et al. 2009). Meanwhile, various research has looked into the discrepancies that exist between reported actions and reality, as well as their underlying reasons for this (Cerin 2002; Solomon & Lewis 2002; Kolk 2003; Jose & Lee 2007). Conversely, other studies support the “conventional” idea that the relationship between environmental and commercial performance is inversely proportional (Freedman & Jaggi 1992; Hamilton 1995; Klassen 2000). This belief stems from the idea that expenses for regulation would increase costs

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and detrimentally impact performance (Montabon et al. 2007). This leads to the question of how organizations present their sustainability activities and KPIs, as well as whether it is purely in a manner that appeases stakeholders, a question that is tackled within research objective RO2

and addressed in Chapter IV.

Thus, in accordance with the set parameters outlined by governments and regulatory authorities, organizations have adopted various metrics for assessing environmental performance (Dangelico & Pujari 2010). Such CSR reports have been deemed a suitable, reliable, and credible source of information pertaining to the organization’s actions, performance, and CSR (Montabon et al. 2007; Sroufe et al. 2003; Cerin 2002). It is noteworthy that the limited volume of research that addresses the relationship between organizational competitiveness and environmental performance has been conducted solely from the perspective of organizational profitability (Fahimnia, Sarkis & Eshragh 2015). This entailed the identification of either weak or insignificant relationships (Hamilton, 1995; Jaggi & Freedman, 1992) while others identified strong and significant relationships (Iraldo et al. 2009; Al-Tuwaijri et al. 2004) between organizations competing in environmental performance.

According to dictionary definitions, “metrics” refers to a standard of measurement (Merriam-Webster 2004), while a “Key Performance Indicator” refers to a quantifiable measure that is utilized in evaluating organizational success in meeting outlined objectives (Reh 2016). In reviewing previous research, many issues, perspectives and criteria of GSCM and SSCM as well as environmental impacts on organizations have been researched. After reviewing the literature, several KPIs and measures were identified and collated in Table 12. It has been identified that future references refer to the subsequent references, and any overlaps were removed, with KPIs being primarily limited to their first initiating research. This was to facilitate the development of a more holistic perspective of the interrelated KPIs within the SSCM literature. This also further shows the different perspectives from which SSCM has been evaluated.

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Table 12 – Collated KPIs from literature

Source Key Performance Indicator Description and interpretation

Alkhidir and Zailani (2009) Regulations The regulations and their importance which are imposed upon the organization

Customer pressures The pressures customers put on the organization for sustainability implementation

Supplier pressures The pressures suppliers impose on the organization for sustainability implementation

Competition The competitive forces that cause organizations to implement SSCM

Market demand The demand presented from the market for sustainability in activities and products provided

Community pressures The pressures exerted by the community on the organization

Social responsibility The overarching perception of the organization’s social responsibility

Expected business benefits The perceived business benefits to SSCM implementation

Employee pressures The pressures employees exert on the organization for sustainability implementation

(Beamon 1999) Customer Retention Rate of customer retention and turnover Resource Utilization The utilization of all resources (Dubey, Gunasekaran & Samar

Ali 2015) Waste Management Management of the waste

Reverse Logistics Operations based on reusing products and materials (Gunasekaran & Kobu 2007) Inventory costs Costs of inventory holding

Production flexibility Flexibility of production processes Logistics Costs Costs related to logistics and transportation Capacity utilization The utilisation of the facilities’ capacity Compliance to regulations Organizational adherence to regulations Labour efficiency Efficiency of labour employment and production (Gunasekaran et al. 2001) Stakeholders involvement Involvement of stakeholders within organization

Product cost Overall costs involved in manufacturing the product Product quality The ability to maintain the quality of the product Speed of delivery The impact on the speed with which the product is

delivered to customers

Capacity utilization The ability to make the most of the capacity available within the organization

Production Efficiency Efficiency of production rates

Supplier Selection Costs Decisions relating to selection of suppliers Perceived value of product The perceived value of the product Planning and Product

Design Designing the products and planning their production (Hofer et al. 2012) Environmental Quality

management Managing quality with attention to environment Hussain et al. (2015) Governmental Regulations Regulations imposed by governmental bodies

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Risk Management The management for risks

Injury prevention Preventative precautions within facilities Adoption of Safety Practices Safety practices implemented within organization Labour Equity Equality and diversity in employment

Quality of employee life Employee life-quality balance

(Kaplan & Norton 1996) Innovation & improvement Innovation & improvement of processes and products

(Morali & Searcy 2013)

Operational costs Costs of running operations Customer satisfaction rates Rates of customer satisfaction Investment costs Costs of investment in sustainability Return on investment Return on Investment (ROI) rates Greenhouse gas emission

rates GHG emissions from facilities

Employment creation rates Rate of new job creation and hiring cycles Training Rates Rate of employee developmental trainings Noise rates Noise rates causing disturbance

As can be seen, the literature has identified several KPIs within SSCM. The two questions that arise, and which hinge on the research gaps, are: which of these KPIs are most influential within the organizations, and which are most important for SSCM implementation. The identification of the most influential KPIs within organizations will be addressed in Research Objective 2 (RO2), while Research Objective 4 (RO4) endeavours to weight the KPIs to identify which of

the most influential KPIs are more important. This is a promising area for further research, especially with the growing importance, consideration and implementation of environmental sustainability practices. To develop a viable approach to resolve this, there must be a devised and structured approach that is grounded in theoretical background. The Key Organizational Theories (KoTs) within the realm of this domain are discussed in the following subsection.

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