Supplier integration, green sustainability initiatives, and financial performances of fashion enterprises under global financial crisis

Abstract

Supplier integration (SI) and green sustainability program (GSP) adoption are common in fashion supply chain management. It is widely believed that these practices would lead to competitive advantages of the enterprises, and help enhance their operational and financial performances.The fashion industry is one of the sectors that are greatly influenced by the economic situation of the market. Any economic recession or disruption would significantly hurt the fashion enterprises' business performances.Motivated by the importance of SI and GSPs in fashion supply chain management and the big impact of financial tsunami, this thesis empirically studied the effect of SI and GSP adoption on fashion enterprises' financial performances under the 2008 financial tsunami. A total of 90 fashion enterprises were selected from Thomson Reuters Knowledge database according to a list of criteria for this research. Content analysis and statistical methods were employed to collect and analyze data. In order to study the impact of the financial tsunami on business performance, this thesis explored the fashion enterprises' financial performances in 1) the pre-recession period, 2) the post-recession period, and 3) between these two periods of time. Besides, the relationship between SI of a fashion enterprise and its GSP adoption was also examined. As the fashion supply chain is complex and varies with different contextual factors, this study also examined the moderating effect brought by fashion content and revealed whether there would be different findings for fashion enterprises which mainly sell "fashionable" from those sell "basic" products.The findings of this study indicated that (1) both SI and GSP adoption were beneficial to fashion enterprises' financial performances, especially after financial tsunami; and (2) fashion content did exert the moderating effect on the above relationships. Comparing between the "fashionable" group and the "basic" group, using SI and GSPs were effective for the "fashionable" group to improve its profit against financial tsunami but not for the "basic" group. This study also demonstrated that a high level of SI would encourage fashion enterprises to establish GSP. On the other hand, no mediating effect of GSP adoption was found on the relationship between SI and fashion enterprises’ financial outcomes. Based on these results, specific managerial recommendations were then given.