Relationship between Green Supply Chain Practices, Green Transformational Leadership and Sustainable Performance of Multinational Tea Firms in Kenya

Abstract

Performance of firms has remained a global issue based on changes in climate and global warming among others. This issue has forced countries to adopt green strategies so as to reduce the effect of climate change on business sustainability. Climate change affect agricultural-processing firms directly leading to poor performance. Green supply chain practices and green transformational leadership are concepts introduced to businesses as a leap to solving problem of sustainable performance. The aim of this study was to determine the relationship between green supply chain practices, green transformational leadership and sustainable performance of multinational tea firms in Kenya. The specific objective were; to determine the relationship between eco-design practices; to establish the relationship between green purchasing practices, to examine the relationship between green logistics practices and to assess the relationship between environmental regulation and sustainable performance of multinational tea firm in Kenya. Further, the study sought to determine the moderating effect of green transformational leadership on the relationship of green supply chain practices on sustainable performance of multinational tea firm in Kenya. Sustainable resource theory, stakeholder theory, ecological modernization theory and Porter’s value chain model were adopted in the study. The study adopted positivism philosophy with correlational and cross- sectional research design. A sample of 225 managers were selected using stratified sampling technique from a target population of 512 managers from the three multinational tea firms in Kenya. The study mainly used primary data collected using structured questionnaires. Content, face, criterion and construct validity of the instrument were achieved through interrogation of instrument by supervisors and experts. Reliability was tested using Cronbach Alpha coefficient having a threshold of more than 0.7 which was deemed reliable. Descriptive statistics were analyzed in form of Mean and Standard deviation. Multiple linear regression model and correlation analysis was used for data analysis. The multiple linear regression analysis indicated a weak relationship (R 2 = 0.034, F= 7.411; p<0.05). The results further showed that eco-design predicted significant relationship with sustainable performance (β1= .051, t= 2.722; p<0.05). The results further indicated that the linear relationship between green purchasing and sustainable performance was weak (R 2 = 0.073, F= 16.578; p<0.05). Green purchasing predicted significant relationship with sustainable performance (β1= .119, t= 4.072; p<0.05). The results (R 2 = 0.017, F= 3.640; p<0.05) indicated a weak linear relationship between green logistics and sustainable performance. The correlation results between environmental regulation and sustainable performance was insignificant (r = 0.013, p>0.05). The results on green transformational leadership indicated significant relationship with sustainable performance (β1= .207, t= 5.16; p<0.05).The R 2 value showed that green transformational leadership had a positive impact on sustainable performance (R 2 = 0.113, F=26.621; p<0.05). On the moderator there was a positive change of R 2 (0.099) indicating that it had a moderating effect on the relationship between Green supply chain practices and sustainable performance. The study recommends that multinational tea firms in Kenya should put resources in not only developing eco-design, green logistics, green purchasing and environmental techniques but also on the operationalization of the same. The study further recommends that the multinational tea firms should consider having a green transformational leader in place who will be charged with ensuring green procurement practices are operationalized. The findings may be useful to agricultural manufacturing companies in curbing wastage, improve environment as well as economic benefit. This may benefit the Kenyan government in implementing green solutions.