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Green Practices and Corporate Sustainability Performance Of GREEN PRACTICES AND CORPORATE SUSTAINABILITY PERFORMANCE OF CHEMICAL MANUFACTURING ORGANISATIONS IN MALAYSIA: THE MODERATING ROLE OF ISLAMIC WORK ETHICS, ORGANISATION SIZE, AND ORGANISATION AGE MARYAM JAMILAH ASHA’ARI COLLEGE OF GRADUATE STUDIES UNIVERSITI TENAGA NASIONAL 2020 GREEN PRACTICES AND CORPORATE SUSTAINABILITY PERFORMANCE OF CHEMICAL MANUFACTURING ORGANISATIONS IN MALAYSIA: THE MODERATING ROLE OF ISLAMIC WORK ETHICS, ORGANISATION SIZE, AND ORGANISATION AGE MARYAM JAMILAH ASHA’ARI A Thesis Submitted to the College of Graduate Studies, Universiti Tenaga Nasional in Fulfilment of the Requirements for the Degree of Doctor of Philosophy (Business Management) AUGUST 2020 DECLARATION I Ihereby hereby declare declare that that the the thesis thesis is ismy my original original work work except except for for quotations quotations and and citationscitations which which have have been been duly duly acknowledged. acknowledged. I Ialso also declare declare that that it ithas has not not been been previously,previously, and and is isnot not concurrently concurrently submitted submitted fo forr any any other other degree degree at at Universiti Universiti TenagaTenaga Nasional Nasional or or at at any any other other institutions. institutions. This This thesis thesis may may be be made made available available withinwithin the the university university library library and and may may be be photocopies photocopied and and loaned loaned to to other other libraries libraries for for thethe purpose purpose of of consultation. consultation. _______________________________ MARYAM JAMILAH ASHA’ARI Date: ii ABSTRACT Sustainability is a crucial issue for many sectors in Malaysia, including the manufacturing sector. Many businesses, especially the chemical manufacturing industry, aim to achieve a sustainable business through the implementation of green practices. Green practices provide guidelines for the employees to simultaneously sustain the organisation in a sustainable manner and carry out the required manufacturing activities. Focusing on that, this study aimed to examine the effects of green practices on corporate sustainability performance through Islamic work ethics, organisation size, and organisation age as moderators. Using the stratified random sampling technique, 344 chemical manufacturing organisations in Malaysia were invited to participate in a survey. Data from 130 completed questionnaire sets were subjected to partial least square (PLS) analysis. The results demonstrated significant effects of green practices on corporate sustainability performance via Islamic work ethics and organisation size. However, organisation age was found to exhibit no moderation effect on the relationship between green practices and corporate sustainability performance. Conclusively, as part of the organisational strategies, the sustainability of chemical manufacturing organisations must involve successful implementation of green practices, Islamic work ethics, and organisation size. This study offered several theoretical and practical contributions on green practices, Islamic work ethics, organisation size, and organisation age, and corporate sustainability performance. Theoretically, this study extended literature on the resource-based view theory, natural-resource-based view theory, and stakeholder theory. Al-Quran and hadith were used to support this study to link the relationships of the variables under study, particularly in the context of chemical manufacturing organisations in Malaysia. Practically, this study was expected to assist chemical manufacturers in selecting the appropriate green practices to achieve corporate sustainability performance and good implementation of Islamic work ethics. Additionally, it is recommended for future research to explore other types of industries in the manufacturing sector given the focus of this study on the chemical manufacturing industry only. Keywords: Green practices; Corporate sustainability performance; Islamic work ethics; Organisation size; Organisation age; Chemical manufacturing organisations; PLS. iii ACKNOWLEDGMENT Alhamdulillah, I would like to thank Allah (S.W.T) for this opportunity and strength to complete my study. I am blessed and very grateful to have Allah (S.W.T) by my side; I am never alone, as Allah (S.W.T) is always with me. I hold on to the sayings of Allah (S.W.T): ―Balillaahu maulaakum wahuwa khoirunnaasiriin‖ (But Allah (S.W.T) is your protector, and He is the best of helpers) [3:150]. I would like to thank Allah (S.W.T) and Prophet Muhammad (S.A.W) for being my source of happiness and strength. Besides that, I would like to express my gratitude to my mother, Pauziah Mahmood, and my father, Asha‘ari Yusoff, for guiding me well to what I am now. Not to forget, my whole family who always support me in life, especially throughout my study. I hope whatever I achieve today is a great present for them. I also hope that my success would grant them happiness and may Allah (S.W.T) grant them jannah. I would like to extend my appreciation and my sincere thanks to my lovely supervisor, Prof. Dato‘ Dr Salina Daud, who has guided me very well throughout my study. Prof. Dato‘ Dr Salina Daud is a great supervisor and has imparted wonderful knowledge that I would not forget. She significantly inspires me, and I am very grateful for that. I pray that Allah (S.W.T) blesses her for life. In addition, I would like to thank my friends who support me throughout this study; to the employees of the chemical manufacturing organisations who participated in the survey; and to everyone who has involved directly or indirectly in the completion of this study. I hope that my success would benefit others and I also hope to contribute so much more within my ability in the future. Thank you very much to everyone. iv TABLE OF CONTENTS Page DECLARATION ii ABSTRACT iii ACKNOWLEDGMENT iv TABLE OF CONTENTS v LIST OF TABLES xi LIST OF FIGURES xiv LIST OF ABBREVIATIONS xv LIST OF PUBLICATIONS xvii CHAPTER 1 INTRODUCTION 1 1.1 Introduction 1 1.2 Background of Study 5 1.3 Problem Statement 10 1.4 Research Questions 16 1.5 Research Objectives 17 1.6 Scope of Study 18 1.7 Significance of Study 18 1.7.1 Theoretical Contributions 18 1.7.2 Practical Contributions 21 1.8 Definition of Key Terms 23 CHAPTER 2 LITERATURE REVIEW 26 2.1 Introduction 26 2.2 Manufacturing Sector 26 2.2.1 Chemical Manufacturing Industry 29 2.3 Sustainability 37 v 2.3.1 Sustainability in Malaysia 38 2.4 Corporate Sustainability Performance 42 2.4.1 Economic Sustainability Performance 45 2.4.2 Environmental Sustainability Performance 46 2.4.3 Social Sustainability Performance 47 2.5 Differences between Corporate Sustainability Performance and Firm Performance 48 2.6 Green Practices 49 2.6.1 Waste Management 55 2.6.2 Sustainable Design 55 2.6.3 Eco-Labelling 56 2.6.4 Sustainable Procurement 57 2.6.5 Sustainable Marketing 58 2.6.6 Sustainable Lifestyles 59 2.7 Islamic Work Ethics 60 2.7.1 Islamic Work Ethics as Organisational Ethics 67 2.7.2 Differences between Islamic Work Ethics and Conventional Work Ethics 69 2.8 Organisation Size 71 2.9 Organisation Age 73 2.10 Research Gaps 74 2.11 Al-Quran and Hadith 77 2.12 Underpinning Theories of Study 82 2.12.1 Resource-Based View Theory 82 2.12.2 Natural-Resource-Based View Theory 84 2.12.3 Stakeholder Theory 86 2.13 Research Framework 92 2.14 Development of Hypotheses 93 vi 2.14.1 Relationship between Green Practices and Corporate Sustainability Performance 93 2.14.2 Relationship between Islamic Work Ethics and Corporate Sustainability Performance 96 2.14.3 Islamic Work Ethics as a Moderator in the Relationship between Green Practices and Corporate Sustainability Performance 98 2.14.4 Relationship between Organisation Size and Corporate Sustainability Performance 100 2.14.5 Moderating Role of Organisation Size in the Relationship between Green Practices and Corporate Sustainability Performance 103 2.14.6 Relationship between Organisation Age and Corporate Sustainability Performance 104 2.14.7 Moderating Role of Organisation Age in the Relationship between Green Practices and Corporate Sustainability Performance 105 2.15 List of Proposed Hypotheses 106 2.16 Chapter Summary 107 CHAPTER 3 MATERIALS AND METHODOLOGY 108 3.1 Introduction 108 3.2 Research Paradigm 108 3.3 Research Approach 109 3.4 Research Time Horizon 110 3.5 Research Design 111 3.6 Research Strategies 111 3.7 Population 112 3.8 Sample 114 3.8.1 Sample Size 116 3.8.2 Sampling Technique 118 3.9 Demographic Profiles 119 3.10 Measurement Items 120 vii 3.10.1 Green Practices 121 3.10.2 Islamic Work Ethics 126 3.10.3 Corporate Sustainability Performance 127 3.10.4 Organisation Size 129 3.10.5 Organisation Age 130 3.11 Validity 130 3.12 Reliability 131 3.13 Measurement Scale 131 3.14 Pilot Study 133 3.15 Data Collection 135 3.16 Data Analysis 136 3.16.1 Structural Equation Modelling (SEM) 136 3.16.2 Partial Least Square-Structural Equation Modelling (PLS-SEM) 137 3.16.3 Descriptive Analysis 139 3.16.4 Assessment of Measurement Model 139 3.16.5 Assessment of Structural Model 141 3.17 Chapter Summary 145 CHAPTER 4 RESULT AND DISCUSSION 146 4.1 Introduction 146 4.2 Survey Response Analysis 146 4.2.1 Response Rate 146 4.2.2 Demographic Profile of Respondents 147 4.3 Data Screening 149 4.3.1 Missing Values 149 4.3.2 Outliers 149 4.3.3 Common Method Variance 152 4.4 Descriptive Analysis 153 viii 4.5 Structural Equation Modelling (SEM) 161 4.5.1 Assessment of Reflective Measurement Model 161 4.6 Assessment of Structural Model 170 4.6.1 Collinearity
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