The influence of lean management and environmental practices on relative competitive quality advantage and performance

Abstract

Purpose – Firms are adopting strategies to advance product quality and environmental sustainability to achieve improved profitability and shareholders’ wealth. The study investigates strategies that create a superior quality performance to competitors and improve both environmental and business performances. This paper explores the direct and indirect influence of lean management and environmental practices on relative competitive quality advantage, environmental performance, and business performance. Design/methodology/approach – The study uses a quantitative method where data is gathered from 259 manufacturing firms in Ghana. The data is gathered through customized questionnaires. The partial least squares structural equation modeling (SmartPLS 3.2.8) is used to analyze the data. Firm size, industry type, and importance of environmental issues are used as control variables in this study. Findings – The findings of the study indicate that both lean management and environmental practices create relative competitive quality advantage and improve environmental performance and business performance. Environmental performance and relative competitive quality advantage mediate the influence of lean management and environmental practices on business performance. The results further indicate that lean management creates a higher relative competitive quality advantage than environmental practices, while environmental practices have more potential to enhance environmental performance than lean management. Originality/value – The study develops and proposes a comprehensive theoretical framework that examines the potency of environmental practices and lean management in creating a relative competitive quality advantage and improving environmental performance and business performance from a Ghanaian perspective, which is an emerging economy in Africa. Lean management and environmental practices may jointly help firms create relative competitive advantage and improve environmental performance to enhance business performance.