The role of environmental commitment and green creativity on business performance mediated by circular economy implementation
DOI:
https://doi.org/10.36096/ijbes.v4i4.355Keywords:
Environmental Commitment, Green Creativity, Circular Economy Implementation, Business Performance,Abstract
This study aims to examine and analyze the influence of green creativity and environmental commitment on business performance by considering the mediating influence of circular economy implementation in batik craft small and medium industries in Sleman Regency. This study is carried out using a quantitative method, with several samples of 120 respondents, the owner or manager of the natural dye batik crafts enterprise in Sleman Regency. The sampling technique is using a non-probability sampling technique. The data is collected by distributing questionnaires electronically. The research variables used in this study are green creativity and environmental commitment as the exogenous variable, business performance as the endogenous variable, and circular economy implementation as mediating variable. The data analysis is carried out using Partial Least Square (PLS) with the software of SmartPLS 3.0. The results of this study show that: (1) Green creativity has a significant favorable influence on the business performance of batik craft SMEs in Sleman Regency; (2) Environmental commitment has a significant positive influence on circular economy implementation; (3) Circular economy implementation has a significant positive influence on business performance, and (4) Circular economy implementation is not proven as mediating variable in the relationship of environmental commitment and business performance in batik craft SMEs in Sleman Regency. This study provides suggestions for batik owners to increase the creation of product samples for customers by utilizing virtual services to reduce the exploitation of natural resources. Further research is required at different times since this study is carried out during the Covid-19 pandemic.
Downloads
References
Aeknarajindawat, N., & Jermsittiparsert, K. (2019). The mediating role of green creativity in the relationship between proactive green innovation, reactive green innovation and the performance of Green product development: A case of Thai sports manufacturing firms. Journal of Human Sport and Exercise, 14(5proc), S2290-S2303. https://doi.org/10.14198/jhse.2019.14.Proc5.45 DOI: https://doi.org/10.14198/jhse.2019.14.Proc5.45
Agyabeng-Mensah, Y., Afum, E. and Ahenkorah, E. (2020). Exploring financial performance and green logistics management practices: examining the mediating influences of market, environmental and social performances. Journal of Cleaner Production, 258, 120613 DOI: https://doi.org/10.1016/j.jclepro.2020.120613
Badhotiya, G. K., Avikal, S., Soni, G., & Sengar, N. (2021). Analyzing barriers for the adoption of circular economy in the manufacturing sector. International Journal of Productivity and Performance Management. https://doi.org/10.1108/IJPPM-01-2021-0021 DOI: https://doi.org/10.1108/IJPPM-01-2021-0021
Bai, C., J. Sarkis, F. Yin, and Y. Dou. (2020). Sustainable Supply Chain Flexibility and Its Relationship to Circular Economy Target Performance. International Journal of Production Research, 58 (19), 5893–5910 DOI: https://doi.org/10.1080/00207543.2019.1661532
Barczak, G., Lassk, F., & Mulki, J. (2010). Antecedents of Team Creativity: An Examination of Team Emotional Intelligence, Team Trust and Collaborative Culture. Creativity and Innovation Management, 19(4), 332–345. https://doi.org/10.1111/j.1467-8691. 2010.00574.x DOI: https://doi.org/10.1111/j.1467-8691.2010.00574.x
Basheer, M., Siam, M., Awn, A., & Hassan, S. (2019). Exploring the role of TQM and supply chain practices for firm supply performance in the presence of information technology capabilities and supply chain technology adoption: A case of textile firms in Pakistan. Uncertain Supply Chain Management, 7(2), 275-288. https://doi.org/10.5267/j.uscm.2018.9.00 DOI: https://doi.org/10.5267/j.uscm.2018.9.001
Bastein, A. G. T. M., Roelofs, E., Rietveld, E., & Hoogendoorn, A. (2013). Opportunities for a Circular Economy in the Netherlands (pp. 1-13). Delft: TNO
Bocken, N.M.P., Pauw, I.D., Bakker, C & Grinten, B.V.D. (2016). Product design and business model strategies for a circular economy. Journal of Industrial and Production Engineering, 33(5), 308-320. https://doi.org/10.1080/21681015.2016.1172124 DOI: https://doi.org/10.1080/21681015.2016.1172124
Boso, N., Donbesuur, F., Bendega, T., Annan, J., & Adeola, O. (2017). Does organizational creativity always drive market performance? Psychology & Marketing, 34(11), 1004–1015. https://doi.org/10.1002/mar.21039 DOI: https://doi.org/10.1002/mar.21039
Chang, Y.Y., Hughes, M., Hotho, S., (2011). Internal and external antecedents of SMEs' innovation ambidexterity outcomes. Management Decision, 49 (10), 1658–1676 change: assessing and simulating the willingness of the firm to adopt/develop cleaner technologies. The case of the In-Bond industry in northern Mexico. Journal of Cleaner Production. 11(4), 411–426. https://doi.org/10.1016/S0959-6526(02)00063-X DOI: https://doi.org/10.1108/00251741111183816
Chen, H. L., Hu, Y. C., Lee, M. Y., & Yen, G. F. (2020). Importance of Employee Care in Corporate Social Responsibility: An AHP-Based Study from the Perspective of Corporate Commitment. Sustainability, 12(15), 5885. https://doi.org/10.3390/su12155885 DOI: https://doi.org/10.3390/su12155885
Chen, Y. S. & Chang, C. H. (2013). The determinants of green product development performance: Green dynamic capabilities, green transformational leadership, and green creativity. Journal of business ethics, 116(1), 107-119. https://doi.org/10.1007/s10551-012-1452-x DOI: https://doi.org/10.1007/s10551-012-1452-x
Chen, Y.-S., Chang, T.-W., Lin, C.-Y., Lai, P.-Y., & Wang, K.-H. (2016). The Influence of Proactive Green Innovation and Reactive Green Innovation on Green Product Development Performance: The Mediation Role of Green Creativity. Sustainability, 8(10), 966. https://doi.org/10.3390/su8100966 DOI: https://doi.org/10.3390/su8100966
Daddi, T., Ceglia, D., Bianchi, G., & Barcellos, M.D.E. (2018). Paradoxical tensions and corporate sustainability: A focus on circular economy business cases. Corporate Social Responsibility and Environmental Management, 26(4), 770-780. https://doi.org/10.1002/csr.1719 DOI: https://doi.org/10.1002/csr.1719
Diabat, A., Khodaverdi, R. & Olfat, L. (2013). An exploration of green supply chain practices and performances in an automotive industry. The International Journal of advanced Manufacturing Technology, 68, 949–961. https://doi.org/10.1007/s00170-013-4955-4 DOI: https://doi.org/10.1007/s00170-013-4955-4
Edwin Cheng, T. C., Kamble, S. S., Belhadi, A., Ndubisi, N. O., Lai, K. H., & Kharat, M. G. (2021). Linkages between big data analytics, circular economy, sustainable supply chain flexibility, and sustainable performance in manufacturing firms. International Journal of Production Research, 1-15. https://doi.org/10.1080/00207543.2021.1906971 DOI: https://doi.org/10.1080/00207543.2021.1906971
Ferreira, J., Coelho, A., & Moutinho, L. (2020). Dynamic capabilities, creativity and innovation capability and their impact on competitive advantage and firm performance: The moderating role of entrepreneurial orientation. Technovation, 92-93, 102061. https://doi.org/10.1016/j.technovation.2018.11.004
Ferreira, J., Coelho, A., & Moutinho, L. (2020). Dynamic capabilities, creativity and innovation capability and their impact on competitive advantage and firm performance: The moderating role of entrepreneurial orientation. Technovation, 92-93, 102061. https://doi.org/10.1016/j.technovation.2018.11.004 DOI: https://doi.org/10.1016/j.technovation.2018.11.004
Ghozali, I., & Latan, H. (2015). Partial Least Square Konsep Teknik dan Aplikasi Menggunakan Program SmartPLS 3.0 (2nd Edition). Semarang: Badan Penerbit Universitas Diponegoro
Hair, R., & JJ, S. M., & Ringle, CM (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/EBR-11-2018-0203 DOI: https://doi.org/10.1108/EBR-11-2018-0203
Hesari, A. E., Shadiardehaei, W., Shahrabi, B. (2021). The effect of corporate social responsibility on brand performance with the mediating role of corporate reputation, resource commitment and green creativity. Technicki Glasnik, 15(1), 84-91. https://doi.org/10.31803/tg-20200922163131 DOI: https://doi.org/10.31803/tg-20200922163131
Hussain, N., Rigoni, U., Orij, R. P. (2018). Corporate governance and sustainability performance: Analysis of triple bottom line performance. Journal of Business Ethics, 149 (2), 411-432 DOI: https://doi.org/10.1007/s10551-016-3099-5
Jabbour, C.J.C., Seuring, S., Jabbour, A.B.L.D.S., Jugend, D., Fiorini, P.D.C., Latan, H., Izeppi, W.C. (2020). Stakeholders, innovative business models for the circular economy and sustainable performance of firms in an emerging economy facing institutional voids. Journal of Environmental Management, 264, 110416. https://doi.org/10.1016/j.jenvman.2020.110416 DOI: https://doi.org/10.1016/j.jenvman.2020.110416
Jia, J., Liu, H., Chin, T., & Hu, D. (2018). The continuous mediating effects of GHRM on employees' green passion via transformational leadership and green creativity. Sustainability, 10(9), 3237. https://doi.org/10. 3390/su10093237 DOI: https://doi.org/10.3390/su10093237
Khan, O., Daddi, T. and Iraldo, F. (2020). The role of dynamic capabilities in circular economy implementation and performance of companies. Corporate Social Responsibility and Environmental Management, 27(6), 3018-3033. https://doi.org/10.1002/csr.2020 DOI: https://doi.org/10.1002/csr.2020
Kock, N., & Lynn, G. (2012). Lateral collinearity and misleading results in variance-based SEM: An illustration and recommendations. Journal of the Association for information Systems, 13(7) DOI: https://doi.org/10.17705/1jais.00302
Kok, L., Wurpel, G., & Ten Wolde, A. (2013). Unleashing the power of the circular economy. Available at http://www.imsa.nl/uploads/Unleashing_the_Power_of_the_Circular_Economy-Circle_Economy.pdf
Kraus, S., Rigtering, J. C., Hughes, M., & Hosman, V. (2012). Entrepreneurial orientation and the business performance of SMEs: a quantitative study from the Netherlands. Review of Managerial Science, 6(2), 161-182 DOI: https://doi.org/10.1007/s11846-011-0062-9
Kristoffersen, E., Mikalef, P., Blomsma, F., Li, J. (2021). The effects of business analytics capability on circular economy implementation, resource orchestration capability, and firm performance. International Journal of Production Economics, 239, 108205. https://doi.org/10.1016/j.ijpe.2021.108205 DOI: https://doi.org/10.1016/j.ijpe.2021.108205
Kwarteng, A., Simpson, S. N. Y., & Agyenim-Boateng, C. (2021). The effects of circular economy initiative implementation on business performance: the moderating role of organizational culture. Social Responsibility Journal. http://dx.doi.org/10.1108/SRJ-01-2021-0045 DOI: https://doi.org/10.1108/SRJ-01-2021-0045
Li, W., Bhutto, T. A., Xuhui, W., Maitlo, Q., Zafar, A. U., & Bhutto, N. A. (2020). Unlocking employees’ green creativity: The effects of green transformational leadership, green intrinsic, and extrinsic motivation. Journal of Cleaner Production, 255, 120229. https://doi.org/10.1016/j.jclepro.2020.120229 DOI: https://doi.org/10.1016/j.jclepro.2020.120229
Moktadir, M.A., Kumar, A., Ali, S.M., Paul, S. K, Sultana, R., Rezaei, J. (2020). Critical success factors for a circular economy: Implications for business strategy and the environment. Business Strategy and the Environment, 29(3), 3611-3635. https://doi.org/10.1002/bse.2600 DOI: https://doi.org/10.1002/bse.2600
Moric, L., Jovanovic, J.S., Dokovic, R., Pekovic, S., Perovic, D. (2020). The Effect of Phases of the Adoption of the Circular Economy on Firm Performance: Evidence from 28 EU Countries. Sustainability, 12(6), 2557. https://doi.org/10.3390/su12062557 DOI: https://doi.org/10.3390/su12062557
Nadeem, S. P., Garza-Reyes, J. A., Anosike, A. I., & Kumar, V. (2017). Spectrum of circular economy and its prospects in logistics. In Proceedings of the 2017 International Symposium on Industrial Engineering and Operations Management (IEOM) (pp. 440-451)
Ormazabal, M., Prieto-Sandoval, V., Puga-Leal, R., Jaca, C. (2018). Circular Economy in Spanish SMEs: Challenges and Opportunities. Journal of Cleaner Production, 185, 157-167. https://doi.org/10.1016/j.jclepro.2018.03.031 DOI: https://doi.org/10.1016/j.jclepro.2018.03.031
Ozkan-Ozen, Y.D., Kazancoglu, Y. and Mangla, S.K. (2020). Synchronized barriers for circular supply chains in industry 3.5/industry 4.0 transition for sustainable resource management. Resources, Conservation and Recycling, 161, 104986. https://doi.org/10.1016/j.resconrec.2020.104986 DOI: https://doi.org/10.1016/j.resconrec.2020.104986
Pearce, D. W., Turner, R. K., & Turner, R. K. (1990). Economics of natural resources and the environment. Johns Hopkins University Press
Prieto-Sandoval, V., Jaca, C. and Ormazabal, M. (2018). Towards a consensus on the circular economy. Journal of Cleaner Production, 179, 605-615. https://doi.org/10.1016/j.jclepro.2017.12.224 DOI: https://doi.org/10.1016/j.jclepro.2017.12.224
Rhein, S., Strater, K. F. (2021). Corporate self-commitments to mitigate the global plastic crisis: Recycling rather than reduction and reuse. Journal of Cleaner Production, 296, 126571. https://doi.org/10.1016/j.jclepro.2021.126571 DOI: https://doi.org/10.1016/j.jclepro.2021.126571
Riva, F., Magrizos, S., Rubel, M.R.B. (2021). Investigating the link between managers' green knowledge and leadership style, and their firms' environmental performance: The mediation role of green creativity. Business Strategy and the Environtment, 1-13. https://doi.org/10.1002/bse.2799 DOI: https://doi.org/10.1002/bse.2799
Singh, M. P., Chakraborty, A., Roy, M. (2018). Developing an extended theory of planned behavior model to explore circular economy readiness in manufacturing MSMEs, India. Resources, Conservation & Recycling, 135, 313-322. https://doi.org/10.1016/j.resconrec.2017.07.015 DOI: https://doi.org/10.1016/j.resconrec.2017.07.015
Song, W., & Yu, H. (2018). Green innovation strategy and green innovation: The roles of green creativity and green organizational identity. Corporate Social Responsibility and Environmental Management, 25(2), 135-150. https://doi.org/10.1002/csr.1445 DOI: https://doi.org/10.1002/csr.1445
Song, W., Wang, G. Z., & Ma, X. (2020). Environmental innovation practices and green product innovation performance: A perspective from organizational climate. Sustainable Development, 28(1), 224–234. https://doi.org/10.1002/sd.1990 DOI: https://doi.org/10.1002/sd.1990
Weaver, G.R., Trevino, L.K., Cochran, P.L. (1999). Corporate ethics programs as control systems: influences of executive commitment and environmental factors. Academy of Management Journal, 42 (1), 41–57. https://doi.org/10.5465/256873 DOI: https://doi.org/10.2307/256873
Wu, G. C. (2017). Environmental innovation approaches and business performance: effects of environmental regulations and resource commitment. Innovation, Organization & Mangement, 19(4), 407-427. https://doi.org/10.1080/14479338.2017.1358102 DOI: https://doi.org/10.1080/14479338.2017.1358102
York, J.G. (2009). Pragmatic sustainability: translating environmental ethics into competitive advantage. Journal of Business Ethics, 85 (1), 97–109 DOI: https://doi.org/10.1007/s10551-008-9950-6
Yu, T. K., Lin, F. Y., Kao, K. Y., & Yu, T. Y. (2019). Encouraging environmental commitment to sustainability: An empirical study of environmental connectedness theory to undergraduate students. Sustainability, 11(2), 342. https://doi.org/10.3390/su11020342 DOI: https://doi.org/10.3390/su11020342
Zameer, H., Wang, Y., & Yasmeen, H. (2020). Reinforcing green competitive advantage through green production, creativity and green brand image: implications for cleaner production in China. Journal of Cleaner Production, 247, 119119. https://doi.org/10.1016/j.jclepro.2019.119119 DOI: https://doi.org/10.1016/j.jclepro.2019.119119
Zeng, H., Chen, X., Xiao, X., Zhou, Z. (2017). Institutional pressures, sustainable supply chain management, and circular economy capability: empirical evidence from Chinese eco-industrial park firms. Journal of Cleaner Production, 155(2), 54-65. https://doi.org/10.1016/j. jclepro.2016.10.093 DOI: https://doi.org/10.1016/j.jclepro.2016.10.093
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2022 Ayu Widhiastuti, Muafi Muafi
This work is licensed under a Creative Commons Attribution 4.0 International License.
© 2025 retained by the authors. Licensee BSC International Academy, Istanbul, Turkey. This article is an open-access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0/).
