VIETNAM NATIONAL UNIVERSITY, HANOI INTERNATIONAL SCHOOL GRADUATION PROJECT PROJECT NAME CIRCULAR SUPPLY CHAIN MANAGEMENT IN VIETNAMESE MANUFACTURING SMES: DYNAMIC CAPABILITIES, PRACTICES AND FIRM SUSTAINABILITY PERFORMANCE. Student’s name: Nguyen Thi Nga Hanoi - Year 2023 VIETNAM NATIONAL UNIVERSITY, HANOI INTERNATIONAL SCHOOL GRADUATION PROJECT PROJECT NAME CIRCULAR SUPPLY CHAIN MANAGEMENT IN VIETNAMESE MANUFACTURING SMES: DYNAMIC CAPABILITIES, PRACTICES AND FIRM SUSTAINABILITY PERFORMANCE. TRAN CONG THANH STUDENT: NGUYEN THI NGA STUDENT ID: 19071434 COHORT: IB2019C SUBJECT CODE: INS401101 MAJOR: INTERNATIONAL BUSINESS Hanoi - Year 2023 Table of contents Acknowledge. 5 Letter of declaration.
5 List of figures. 6 List of tables. 6 List of abbreviations .1 Circular supply chain management (CSCM) .2 Theoretical background and hypotheses development .1 Circular supply chain management practices (CSCM practices) .2 Supply chain dynamic capabilities (SCDCs) .4 Supply chain collaboration .3 Firm sustainability performance .1 CSCM Practices and Firm sustainability performance .2 SCDCs and firm sustainability performance .3 The moderating effect of SCDCs .1 Variable measurement and questionaire design.2 Sample data collection. 33 4 Data analysis and results .2 Structural model: structural equation analysis .1 Direct effect analysis .2 Indirect moderating effect analysis.
42 6 Conclusion and future research .3 Limitations and future research. 46 Acknowledge First and foremost, I sincerely thank my supervisor, Dr. Tran Cong Thanh – Lecturer at International School, Vietnam National University Hanoi, for his invaluable guidance and supports. This research would not have been completed without his continued support and guidance throughout our research work.
I hope that I may have a chance to work with him as much as in the near future. Besides, his encouragement is one of the motivate powers which help me to pursuit and finish this study. Due to limited knowledge and time, the thesis still has many shortcomings. I’m looking forward to the comments of teachers and everyone to improve the thesis.
Letter of declaration I hereby declare that the Project entitled “Circular Supply Chain Management in Vietnamese manufacturing SMEs: Dynamic capabilities, Practices and Firm sustainability performance.” 5 is my own research. I has seriously taken research ethics and findings of this study were drawn from our own data. The research findings have not been published elsewhere. I take full responsibility for the fidelity of the number and data and other contents of this research.
Hanoi, 12/04/2023 Nguyen Thi Nga List of figures Figure 2-1: Research Framework. 22 Figure 4-1: The structural model relationships using bootstrapping technique. 40 List of tables Table 2-1:CSCM practices vs SCM sustainability practices. 13 6 Table 3-1:Constructs and their measurements.
27 Table 3-2:Demographic characteristics. 34 Table 4-1: Reliability and convergent validity analysis. 36 Table 4-2: Fornell and Larcker Criterion for Discriminant Validity. 38 Table 4-3: Heterotrait-Monotrait Ratio of Correlations (HTMT).
38 Table 4-4: Predictive Relevance and R2 of the Model. 39 Table 4-5: Results for structural model evaluation. 39 Table 4-6: Hypotheses testing. 41 Table 4-7: CSCM practices implementation level by firm partner.
41 List of abbreviations AVE – Average variance extract HTMT – Heterotrait-monotrait CE – Circular economy CSCM – Circular supply chain management CR – Composite reliability SCDCs – Supply chain dynamic capabilities SEM – Structural equation model SEMs – Small and medium enterprises SSCM – Sustainable supply chain management SRMR – Standardized root mean square residua VIF - Variance inflation factor Abstract Circular supply chain management practices and supply chain dynamic capabilities are critical to achieving firm sustainability. However, it has yet to be discovered how circular supply chain management practices and supply chain dynamics capabilities influence the sustainable performance of SMEs in developing countries. By adopting a resource-based view perspective, this study explores how circular supply chain management practices and supply chain dynamic capabilities impact firm sustainable performance in developing countries through survey research on 53 Vietnam SMEs. Data is analyzed using Smart PLS, and the results show that circular supply chain management practices positively influence firm social, economic, and environmental performance while supply chain dynamic capabilities impact only healthy 7 environment performance.
Interestingly, the results indicate that supply chain dynamic capabilities moderate the relationships between circular supply chain management practices and Vietnamese SMEs' social, economic, and environmental performance. The study thus highlights the moderating role of supply chain dynamic capabilities in facilitating firm circular supply chain management practices and sustainable performance. 1 Introduction Globally, companies face increasing pressure to implement sustainable strategies in their supply chains, such as circular economy principles, for expected performance gains. While the concept's sustainability is well-documented in the extant literature, the concept's circularity has only recently been researched, emphasized, and adopted (Kumar et al., 2021; Mahroof et al., 2021; Modgil et al., 2021; Ranta et al.
Basing on business models that replace the "end- of-life" concept with principles like reuse, reduction, recycling, and recovery (Walker et al., 2021), considered to be a means to attain sustainable benefits by maximizing the utilization of input resources in a regenerative system that reduces emissions, energy consumption, and waste (Atabaki et al. Moreover, the circular economy (CE) requires a complete reform of the human activities system, including production processes and consumption activities of the supply chain (Sehnem et al., 2019), based on the 6R principles: reuse, reduction, recycling, redesign, remanufacturing, and repair operations of utilized products, by-products, and services (Lüdeke‐ 8 Freund et al. These activities are related to the supply chain, so the integration of the circular economy in the supply chain is called Circular Supply Chain Management (CSCM). According to Lahane, Kant, and Shankar (2020), CSCM is a restorative and regenerative process that maximizes resource values until the end of life.
From a broader perspective, small and medium-sized enterprises (SMEs) play a critical role in the national economy due to their significant contribution to GDP and social employment (Dadhich & Hiran, 2022; N. Despite their substantial contribution to society, SMEs negatively affect the environment, such as pollution, emissions, resource waste, and climate change (Ormazabal et al., 2018; Pizzi et al. Tanco, Kalemkerian, and Santos (2021) pointed out that SMEs, in particular, need to include sustainable practices in their business operations management. As a result, it is crucial to encourage SMEs to adopt a CE model to transform traditional, based processes into circular practices, which is a pivotal foundation for realizing sustainable development goals (Pizzi et al.
The transition to a more sustainable and circular economic model is only possible with a thorough understanding of the primary forces encouraging SMEs to embrace circular practices (Pizzi et al. The transition to a circular supply chain (CSC) poses formidable obstacles for SMEs. For risk-averse businesses working with limited resources, SMEs have to pay less attention to financial performance and consider the social and environmental repercussions into account (Games & Rendi, 2019); as a result, they are struggling with implementing CSCM practices (Dey et al., 2020), which causes a delay in the growth of these businesses. SMEs are crucial to the circular supply chain implementation because of their combined contribution to the different nations (Woodard, 2021).
According to the Vietnamese General Statistical Office in Viet Nam, SMEs made up more than 97% of all businesses in 2022. They employed 60% of the country's labor force in construction, manufacturing (particularly the food and beverage industry), and trading (Nguyen et al. CSCM practices can help to manufacture SMEs reduce resource consumption, achieve workplace safety, and meet environmental regulations (Afum et al., 2022a; b; Baah et al. Unfortunately, environmental deterioration, plastic waste, the depletion of natural resources, and excessive carbon emissions limit the sustainable growth of these businesses (Nguyen et al.
Additionally, there is a widespread belief that CSCM practices can improve a firm's environmental performance (Del Giudice, Chierici, Mazzucchelli, & Fiano, 2021). However, the ability of CSCM practices to achieve all dimensions of sustainability performance is still a topic of debate. Previous research on the relationship between CSCM practices and 9 sustainability performance has produced conflicting results when evaluated. For example, Jabbour, Fiorini, Ndubisi, Queiroz, and Piato (2020); Kamble et al.
(2021) found a significant positive relationship between CE practices and firm sustainability performance. In contrast, Edwin Cheng et al. (2022) did not investigate the direct relationship between SSCM practices and sustainability performance. Mixed results of prior studies, attributed to the lack of consideration for environmental orientation, can interact with CSCM practices to enhance firm sustainable performance.
While prior studies have explored the topic of circular supply chains, there is still a need for additional research (Elia et al. The extant literature includes past published studies on the circular supply chain that provide insights into digital-enabled decisions (B., 2020b), risks and barriers (Lahane & Kant, 2021; Ozkan-Ozen et al., 2020), supplier selection criteria (Prosman & Sacchi, 2018), performance measurement (Kazancoglu et al., 2018), and optimal pricing (Sun et al. Although some studies have attempted to link CSCM practices with firm sustainable performance (Agyabeng-Mensah et al., 2023), they have neglected to include supply chain dynamic capabilities (SCDCs) as a critical antecedent to the adoption of CSC in the manufacturing industry, particularly SMEs in Vietnam. Moreover, SCDCs have received limited attention, while SCDCs play an essential role in enabling firms to conduct and apply value-creating strategies to improve effectiveness and efficiency.
Therefore, to bridge the knowledge gap in the literature and advance the contemporary understanding of CSCM, this research investigates the relationships among CSCM practices, SCDCs, and firm sustainability performance. This study contributes to the existing knowledge related to circular supply chain management in Vietnamese manufacturing SMEs through the following research objectives: (1) To investigate how CSCM Practices and SCDCs associate with firm sustainability performance to achieve CSCM in Vietnamese manufacturing SMEs, (2) To examine how SCDCs moderate on the relationship of CSCM Practices and firm sustainability performance. In order to achieve these objectives, two research questions are addressed as follows: 1. How do CSCM Practices and SCDCs associate with firm sustainability performance to achieve CSCM in Vietnamese manufacturing SMEs? 2.
How do SCDCs moderate on the relationship of CSCM Practices and firm sustainability performance (including economic, environmental and social performance) in context of Vietnamese manufacturing SMEs? The remaining sections of this research are structured as follows: In Section 2, the literature on CSCM is presented. The proposed research methodology is presented in Section 10 3 with the steps of the questionaires design and data collection duly explained. The data analysis and result discussions are outlined in Section 4 and Section 5, respectively. In Section 6, the conclusion of the study is highlighted with the limitations and future research directions.1 Circular supply chain management (CSCM) According to a recent literature review on CSCM by Farooque, Zhang, Thürer, Qu, and Huisingh (2019b), the term “circular supply chain” first appeared in 2006.
Since then, several studies (for example, Genovese, Acquaye, Figueroa, and Koh (2017); Nasir et al. (2017)) linked CE with SCM. However, it was not until Farooque et al. (2019) that a formal definition of CSCM was established as “the integration of circular thinking into the management of the supply chain and its surrounding industrial and natural ecosystems.
It systematically restores technical materials and regenerates biological materials toward a zero-waste vision through system-wide innovation in business models and supply chain functions from product/service design to end-of-life and waste management, involving all stakeholders in a product/service lifecycle including parts/product manufacturers, service providers, consumers, and users” (p. Recently, Zhang, Wang, Farooque, Wang, and Choi (2021) conducted a comparison of academic research and real-world implementation instances to demonstrate how CSCM incorporates a variety of dimensions, including closed-loop SCM, reverse SCM, remanufacturing SCM, recycling SCM, and industrial symbiosis. The newly-developed CSCM concept makes three significant advancements in the supply chain sustainability domain. Firstly, CSCM uses cycles, which are restorative for technical materials and regenerative for biological materials, created to apply the CE principle.
It signifies a paradigm shift in supply chain sustainability research from a "cradle-to-grave" to a "cradle-to-cradle" perspective of Genovese et al.