IMPACT OF SUSTAINABLE SUPPLY CHAIN PRACTICES ON FIRM PERFORMANCE RELATED TO MANUFACTURING COMPANIES IN SRI LANKA

Abstract

The history of the world reveals a pattern of development in human life. Nonetheless, the current industrial growth is increasingly jeopardizing the future sustainability of the earth and its natural resources and environment. One of the most observable trends in countries such as Sri Lanka, the open market economy is dominant in all the areas in sociocultural spheres. The management of private sectors attempt to maximize profit in their businesses without caring much for its environmental and social conditions. However, the true development of a country depends not only on economic growth. Sustainable development meets the needs of people today without compromising the ability of people in the future to meet their needs. Therefore, it is very clear the concept of sustainability is the most appropriate tool for preventing or minimizing the jeopardy created by the industrial growth in the world. This study is carried out as a survey related to manufacturing firms in Sri Lanka. Manufacturing is one cog of the whole supply chain wheel. Sustainability in the supply chain encapsulates a number of different priorities: environmental stewardship, conservation of resources, reduction of carbon footprint, financial savings and viability and social responsibility. Therefore, this survey study focuses on identifying the impact of sustainable supply chain practices on firm performance. Sustainable supplier selection criteria are used as sustainable supply chain practices in this study. For the purpose of measuring the success of sustainable supply chain practices, financial and market performance will be measured using the data which will be gathered from all listed manufacturing companies under the Colombo Stock Exchange in Sri Lanka. Further, return on assets and return on equity will be used to measure the financial performance and Tobin’s Q will be used to measure the market performance in this study. Since this study will identify supplier selection criteria implemented by manufacturing companies in Sri Lanka, and measure firm performance related to sustainable supplier selection criteria, these findings will give a novel contribution to the body of knowledge.