CHAPTER ONERESEARCH FRAMEWORK1. Introduction The challenge posed on the industry in developing countries due to the current economic turbulence is immense; As Industry’s production systems are often unsustainable, Only if they are able to produce more with less will they reach a higher level of sustainability.
Enterprises can have a negative impact on their surrounding local environment. In response, there has been an acknowledged growth in legislation aimed at getting organizations to “clean up their act”, and the new environmental services sector has gone a long way in the developed countries. As the enforcement of environmental legislation has been laxer in developing countries, for instance, a sector is growing up noticeably slowly there. As in the developed countries; the environmental awareness and social performance of enterprises have significantly been used as a factor in determining whether to or not do business with them, and this concludes that environmental demands are being obliged on enterprises. Enterprises in the developing countries desiring to enter into global value chains and retain their position in them, are acknowledging that they have to adapt to the environmental demands made of their products as well as their manufacturing procedures, and to accomplish this they need companies that can offer specialized services related to the development and certification of several management systems and products. In developing countries, the response to the problems outlined lies within enabling output to continue to grow with minimizing growth in inputs of materials and energy, for instance , by adopting the “three R’s” strategies; reducing the usage of raw materials in production processes , switching to renewable sources of energy and materials and finally redesigning products to contain a lower number of materials and consume less energy, water, etc. during use; Governments tend to play a significant role in supporting, capacity building, awareness raising , and the creation of industry support institutions and of accreditation and certification bodies; They also need to reduce their environmental impacts on their surrounding environments. Therefore, governments have a key role to play, both by setting regulations and laws as well as enforcing them.
They can invest directly in publicly owned waste-management and pollution-control infrastructures, and encourage business creation in the environmental services sector, they can also support the establishment of institutions that assist enterprises to meet standards and certify that these standards are established the right way, As well as monitor the development of environment-related standards that have an effect on trade, inform their industry of new standards, and help it to meet these standards. The development aid community has a significant role to play in supporting governments to guide their industrial development into ongoing pathways by assisting the industry to overcome the barriers of the lack of knowledge and skills, fragmented and ineffective policy frameworks and difficulties in accessing finance, as well as in encouraging the growth of a recycling industry. Governments also must support removing other financial disincentives to efficiency and creating a strategic science and technological frameworks that encourage green innovation and the transfer, development, and adaptation of environmentally sound technologies. For starters, the development aid community can focus on areas where entrepreneurs are able to get an adequate financial return, even when the normative framework is defective. (Kushwaha ; Sharma, 2016); Stating the previous.
. this research will discuss three main green initiative methods: First of all it will discuss green marketing , which is known to be an effective tool in turning the consumers level of awareness when it comes to greenness an actual buying behavior that benefits the company and generates profit(Hong ; Guo, 2018), as well as discussing green supply chains where CSR holds an internal motivations which play a very important role in keeping the sustainability of the supply chain on the long run by creating environmentally conscious customers who gain confidence and utility from the environmental offerings of green products. A global survey by Accenture shows that over 80% of interviewees considered green products when making purchasing decisions. Carbon Trust surveys states that almost 20% of customers prefer to buy green products even if they cost more than regular products, customers environmental awareness is a significant market-driven factor that helps the environmental long term sustainability of the supply chain, and last but not least this research paper will discuss green products, as consumers current green purchasing behavior is directly related to their awareness of green products, which partly depends on the green marketing implemented by the company as a product provider where the manufacturing department designs and produces green products to meet and satisfy the needs of environmentally cautious customers. (Hong ; Guo, 2018) 1.
2 Research ProblemRegardless of the immense significance and advantages of green initiatives, manufacturer’s involvement in green initiatives is still under the level expectations; Some manufacturers are afraid of engaging in green initiatives due to the difficulties and risks involved and remain stuck in their established routines.Accordingly, the research problem can be formulated in the following questions: what is the impact of green initiatives on the financial performance of companies, and what are the benefits derived from following the trend from both the company and the consumer perspectives?1.3 Research ObjectiveThis research aims to examine the impact of following green initiative processes on the financial performance of company’s and the reason behind following such trend as well as the benefits derived from green initiatives. This will be done through the discussion of the main results of literature and highlighting the views regarding the implementation of green initiatives, followed by a comparison between company’s profits before and after the implication of green initiatives, for attitudes and perceptions, business practices, and environmental commercial benefits were determined to be the main factors that affect green process innovations. As to green initiatives innovation, environmental resources, business practices, attitudes and perception, technical barriers, environmental and commercial benefits and, government support presented themselves as the internal and external barriers that need to be addressed. The results have significant implications for managers of manufacturing companies that have plans of promoting green products, processes, and system innovations.(Palmer & Truong, 2017)1.4 Research Importance and MotivationThe importance of this research stems from the importance of raising awareness when it comes to green initiatives and measure the benefits of following this business strategy for both organizations and consumers, as the global concern of environmental health and the recent level of pollution raised a high level of awareness organizations tried to address those concerns by following eco-friendly processes in order to show support to their consumers which in order will generate a significant amount of revenue and can even benefit in expanding the organizations market share as going green has become the latest industrial trend(Kushwaha & Sharma, 2016) , Finally, the significance of this research comes from the expected implication of the green initiative implementation on the financial performance of the company.
1.5 Research Contribution This research contributes to and enriches the existing literature by providing cases of organizations that applied green initiatives as Unilever opposing to others that refused to apply it as in Egypt. Additionally, this research provides guidance with regards to the revelation of different green based products, sales rate based on consumers’ purchases so they can study consumers demand and its effect on organizational financial performance as it will vary due to the customer level of awareness regarding green initiatives. This will be considered as a warning to businesses so that they can develop new strategies and try not to continue in the productions processes they are following as they have a significant impact on the environment.1.6 Research PlanTo address the research problem, answer the research questions and achieve research objectives, this research will be organized to include five chapters: Chapter one presents the general framework of the research which includes the research introduction, and its objective, importance, motivations, problem, contribution, limitations and plan. Chapter Two is designated to theory development and hypotheses formulation. It includes an investigation and evaluation of extant research related to green initiatives and its effect on the financial performance of organizations, in order to build a theoretical foundation necessary to develop the research hypotheses.
Chapter Three includes a description of the research methodology used and the experimental design; whereas Chapter Four displays the statistical analysis and interpretations of the results. Finally, Chapter Five presents the conclusions of the study, implications, and recommendations for future research.CHAPTER TWOLITERATURE REVIEW AND HYPOTHESES DEVELOPMENTPrefaceIn order to apply efficient and beneficial green initiative systems in organizations, we have to study how did other organizations, which had previously applied the green initiative systems in their business processes, achieved its promising purpose of it and the issues they had faced. Moreover, a detailed study must be given regarding the green initiative importance and benefits for organizations in Egypt and the consequences that might be carried on their financial performance. In the next part, we have an overview of the green initiative history, an explanation about green initiatives and how they really works, to what extent green initiatives are important to be adopted as well its advantages and disadvantages, last but not least, we will go through the Egyptian point of view about adopting green initiatives.
2. Introduction(Kushwaha ; Sharma, 2016) A firms financial performance is based on many functions of the organization such as; Operation functions, productions functions and marketing functions and so on, currently firms are undergoing many pressures that influence these organizational functions, Learning , market performance , reinvestment performance and financial performance are some of the most importance performances that outcome of an organization, Manufacturers in many nations are undergoing high levels of pressure regarding producing products that are Eco-friendly (green) especially the manufacturers that compete in global markets and have to comply with the different foreign standards and regulations, consumers are also posing a high demand of the organizational environmental awareness and practices done by the organizations procedures under the light of the environmental health concern, therefore, adopting green practices due to the dual pressures the business undergoes, for instance, external and internal pressures ; the external pressure is derived from the consumers demand that the organization follows green or Eco-friendly procedures in their business procedures when it comes to production, supply chains, and even marketing ; On the other hand continuous development is considered a significant concern of these organization especially in the food and beverage sector. 2.1 Green InitiativesThe meaning of following green initiatives in organizational functions if conductions the ordinary organizational functions in a more environmentally conscious manner the main functions that this research will discuss will be the following ; Green marketing , Green supply chains and green products.
(Líšková, Cudlínová, Pártlová, ; Petr, 2016) Green marketing is known as the advertisement and promotion of products that are considered to be Eco-Friendly ; John grant wrote a book about green marketing called The Green Marketing Manifesto in 2007 which explains the green marketing five I’s , Intuitive , integrative , innovative , inviting and informed to raise awareness regarding green marketing; Green products can be defined as products that are environmentally friendly which means they are decomposable , biodegradable or recyclable (Tariq, Badir, Tariq, & Bhutta, 2017); And finally Green supply chains can be defined as the integrating environmental consideration and awareness into supply chain management, including, material sourcing , product design and selection, manufacturing processes, delivery of the final product as well as end-of-life management of the product after its useful life.(Hong & Guo, 2018)2.1.1 The Importance of Green InitiativesAs customers and stakeholders now days hold organizations accountable for the way they conduct their business functions the level of the organizational involvement in green initiatives have increased significantly over the past few years as going green has become a global trend in attracting customers and keeping the current ones satisfied with how the organizations conduct their business functions , therefore the profitability of organizations increase due to the high demand of their Eco-friendly offerings which is a result of the ongoing increasing levels of awareness the customers gained over time which may be considered as a double edged weapon in the case of an organization being unable to adapt to such procedure changes ; Concluding the previous statements , the main importance of green initiatives is to conduct business operations using green procedures which will help the organization gain the consumers trust thus resulting the organization becoming more and more profitable over time.(Kushwaha & Sharma, 2016)2.1.2 Advantages of Green Initiatives After putting into consideration all that was previously stated the advantages of green initiatives will be stated as followed , for starters green marketing has an immense advantage that it promotes environment friendly products with less usage of banners and flyers , while green products have an advantage of providing customers as well as potential customers a mean of enjoying the products they desire to use without undergoing the significant burden of worrying whether their purchases might negatively affect the environment due to not being recyclable or not biodegradable after usage , and finally repots regarding the usage of green supply chains shows the results of using green supply chains concludes that revenue sharing contract helps enhance the greening levels of products , which leads to organizations becoming more profitable and gaining higher revenue levels there fore increasing their market share as well as enhancing their corporate social responsibility levels regarding environmental concerns; Stating the previous proves that going green and becoming more involves in green initiatives can have a significant positive impact on the organizations financial performance therefore more and more organizations are adopting green initiatives worldwide even in developing countries.(Kushwaha & Sharma, 2016)