Helpful for research

1. Resources, Conservation and Recycling 55 (2011) 559–566
Contents lists available at ScienceDirect
Resources, Conservation and Recycling
journal homepage: www.elsevier.com/locate/resconrec
Green management practices and firm performance: A case of container terminal
operations
Lun Y.H. Venus
Department of Logistics and Maritime Studies, The Hong Kong Polytechnic University, Hong Kong
a r t i c l e i n f o
Keywords:
Green management practice
Container terminal operations
Firm performance
Container transport
a b s t r a c t
This study aims to investigate the elements of green management practices (GMP) and its association
with firm performance. A GMP model that consists of the key elements of GMP is proposed and firm
performance indicators are formulated to provide a foundation for the adoption of GMP. Hutchison Port
Holding (HPH) is selected as the case to illustrate the application of the proposed GMP model in a real-
life situation. The findings suggest that GMP consists of the following elements: (1) cooperation with
supply chain partners, (2) environmentally friendly operation, and (3) internal management support.
Findings of this study also indicate a positive relationship exists between the adoption of GMP and firm
performance. Hence, operators in the container terminal industry should strive to adopt GMP in order to
achieve good firm performance including improvement in terminal throughput, profitability, and efficient
and cost-effective operation.
© 2010 Elsevier B.V. All rights reserved.
1. Introduction
The concept of a sustainable economy has been a significant area
of concern to society and industry. A sustainable economy can be
defined as ‘one that satisfies the needs and wants of the present
generation without compromising the ability of future generations
to meet their needs and aspirations’ (O’Brien, 2002). Studies on the
rate of depletion of natural resources can be dated back to at least
the 1970s. The report ‘Limits to Growth’ by Meadows et al. (1972)
concluded that ‘the economic growth would have to be carefully
limited if catastrophe was to be avoided’. In recent years, the con-
cept of sustainability is very different from that proposed in the
early seventies. ‘Limits to Growth’ will no longer be accepted by
societies and industries. Nowadays, the challenge to sustainability
is to ensure that industries support economic growth while ensur-
ing environmental protection. The growing interest in sustainable
development has led many firms to examine ways to deal with
environmental issues (Bevilacqua et al., 2007). Environmentally
sustainable management, or the so-called ‘green management’, has
emerged as an important managerial topic for firms to achieve
profit and market share on the one hand and commit to protect-
ing the environment on the other hand (Hock and Erasmus, 2000).
Green management is becoming an important issue as customers
and suppliers are increasingly demanding minimal negative impact
on the natural environment.
E-mail address: lgtvlun@polyu.edu.hk
The costs of environmental protection for firms have increased
considerably since the 1970s and are expected to increase even
further (Christmann, 2000). It implies cost-effective green man-
agement practice is a key determinant of a firm’s competitive
position. Hence, research on environmental issues has extended
from a narrow focus on the concept of pollution control to green
management practices (Klassen and Whybark, 1999). The environ-
mental management literature (Shrivastava, 1995) suggested firms
can enhance their competitive positions and simultaneously reduce
the negative effects of their activities on the natural environment
by implementing green management practices (GMP). The topics of
economic performance and environmental performance cannot be
neglected by firms. Integrating environmental concerns into man-
agement practices has become increasingly important for firms to
gain competitive advantage. However, many firms are still reluc-
tant to take a more aggressive approach to implement GMP due to
‘a perceived lack of evidence that the benefits exceed the costs of
pursuing these initiatives’ (Montabon et al., 2007). There is a need
to examine performance improvement opportunities through the
implementation of GMP. This study aims to develop a GMP model
that consists of the elements of GMP and its performance outcomes.
A container terminal operator is selected as the case to illustrate the
application of the proposed GMP model.
In the context of container transport, a container terminal is a
vital part of the transport infrastructure (Lun et al., 2010). Con-
tainer terminals are nodes that link with other inland transport
modes such as highways, railways, and inland waterway systems
(Lun et al., 2008). Container terminals have evolved from a cargo
handling point to a distribution centre with physical infrastruc-
0921-3449/$ – see front matter © 2010 Elsevier B.V. All rights reserved.
doi:10.1016/j.resconrec.2010.12.001

2. 560 Y.H.V. Lun / Resources, Conservation and Recycling 55 (2011) 559–566
ture serving as transport hubs in the container supply chains
(Almotairi and Lumsden, 2009). Hence, the container terminal
becomes an interface between the areas of production and con-
sumption, attracting the attention of players in the shipping and
transport related areas (Song et al., 2010; Ugboma et al., 2009).
Container terminals link key actors in the international container
transport chain such as shippers, shipping lines and intermodal
transport operators (Lun and Browne, 2009). Container terminal
operators handle the activities from receiving containers to load-
ing onto ships and from dispatching containers to discharging from
ships. In addition, container terminal operators undertake a series
of planning activities such as yard planning, quayside planning and
vessel stowing planning.
Given the academic and practical importance of developing a
GMP in the container transport community, the objective of this
study is to introduce a GMP model to demonstrate the adoption
of GMP and examine its linkage with performance. Understand-
ing the adoption of GMP is important for a number of reasons.
First, it is argued that more attention needs to be paid to the
external factors affecting the operations of firms when adopt-
ing environmental strategies. For instance, ‘environmental product
differentiation’ suggested that whether or not a firm can gain dif-
ferentiation advantage depends on external contingencies such as
the structure of the industry (Reinhardt, 1998). This study focuses
on not only cooperating with supply chain partners but also imple-
menting internal environmental operations to create opportunities
to gain competitive advantage. Second, the environmental manage-
ment literature suggested it is possible for firms to enhance their
firm performance and simultaneously reduce the negative effects
of their activities on the natural environment by implementing
GMP (Shrivastava, 1995). However, the current research has not
provided insights on how firms manage GMP to achieve desired
benefits. This study proposes a GMP model to illustrate the key
elements of GMP and examine its linkage with firm performance.
Third, managers of many firms are faced with making a strategic
decision about whether or not to adopt GMP (Darnall and Edwards,
2006). By understanding the key elements of GMP and its implica-
tions on firm performance, decision makers may be able to assess
their business operations and build internal support to adopt GMP.
Fourth, the application of sustainability to business strategy has
been actively debated (Sharma and Henriques, 2005). However,
research on firm performance of ‘best practices’ on GMP adopted
by container terminal operators has so far been ignored. Case study
research is used in this study to illustrate the desirable performance
outcomes for the adoption of GMP from the perspective of container
terminal operations.
2. GMP as a source of comparative advantage
The study of GMP focuses on identifying best practices that
simultaneously reduce the negative impacts of firms’ activities on
the natural environment and contribute to better firm performance.
Unlike regulatory requirements which are derived from the out-
side, a GMP consists of operational processes that arise from within
a firm. A GMP is a collection of internal efforts at business plan-
ning and implementation. GMP consists of a business policy and a
set of business processes that require firms to assess their envi-
ronmental impacts, determine environmental goals, implement
environmental operations, monitor goals attainment, and undergo
management review. Darnall and Edwards (2006) used a ‘five-
step’ approach to illustrate GMP adoption. The first step in GMP
adoption is securing a pledge for responsible environmental man-
agement. Environmental pledges, supported by top management,
incorporate commitments for continual improvement of pollution
prevention and to comply with relevant environmental legislation
(Starkey, 1998). The second GMP adoption step is the evaluation of
business operations and goal setting. During this stage, decisions
on how to translate its environmental policy into action and busi-
ness priorities are made (Netherwood, 1998). The third stage of
GMP adoption involves the creation of a management structure and
linkage with business partners to realise its environmental goals.
As GMP is a tool to improve a firm’s environmental management,
the fourth stage, i.e. monitoring and taking corrective action if nec-
essary, is crucial for continuous environmental improvement. The
final stage is a management review to provide critical assessments,
new environmental concerns and recommendations.
Costs are accrued during the GMP adoption stages. For instance,
resources are required at the stage of evaluation and goal setting
because firms have to undertake extensive internal evaluations,
employee training and plan development. On the other hand, GMP
can help firms to assure that their management practices conform
to environmental regulations. GMP also assists firms to scruti-
nise their internal operations, engage employees in environmental
issues, continually monitor for environmental improvement, and
increase their knowledge about their operations. All of these actions
also can help firms improve their internal operations and achieve
greater efficiencies. As these activities develop knowledge-based
skills and difficult for competitors to imitate, GMP creates oppor-
tunities to gain competitive advantage (Hart, 1995).
Adoption of GMP also encourages firms to use more sophis-
ticated environmental strategies that build on their basic
environmental protection principles. For example, firms may
implement life cycle cost analysis and assess their activities at
each stage of their value chain to determine business priorities
and actions to be taken. These advanced environmental strate-
gies facilitate the integration of external stakeholders into business
operations. Hence, adoption of GMP can eliminate environmentally
hazardous operating processes and redesign existing operating
systems to reduce life cycle impacts (Hart, 1995). GMP offers
an excellent opportunity for firms to assess all aspects of their
operations jointly to minimise the shift of environmental harms
from one subsystem to another (Shrivastava, 1995) and achieve
greater organisational efficiency (Welford, 1992). Through con-
tinual environmental and organisational improvement, firms may
enjoy further opportunities for comparative advantage.
3. Conceptualisation and model development
GMP has emerged as an effective management tool for firms to
achieve superior performance (Montabon et al., 2007). This new
paradigm of GMP is oriented towards both economic and environ-
mental aspects by applying ecological criteria. The scope of GMP
adoption ranges from green purchasing to life cycle management.
Life cycle design can be seen as ‘the development of a holistic con-
cept for the entire life cycle’ (Niemann et al., 2009). In the context
of container terminal operations, life cycle management includes
the planning of possible operations for the handling, loading and
unloading of containers, equipment and materials recycling meth-
ods, reducing waste, and cutting the use of energy. The field of GMP
is arguably in its early development phases both academically and
practically. Academically, to empirically validate research models
in the field of GMP, using literature in operations and environmen-
tal management to identify key elements of the GMP are needed
(Zhu et al., 2008). Practically, firms can benefit from the identi-
fication of these elements for their self-assessment in GMP and
evaluate its impact on firm performance (Melnyk et al., 2003).
3.1. Review on GMP
From the literature search, three key elements of GMP
(i.e. cooperation with supply chain partners, environmentally

3. Y.H.V. Lun / Resources, Conservation and Recycling 55 (2011) 559–566 561
friendly operations and internal management support) can be
identified:
• Cooperation with supply chain partners: From the supply chain
perspective, Sarkis (2003) developed a decision framework to
evaluate alternatives to GMP adopted by firms that affects their
external relationships with suppliers and customers. Further-
more, Sheu et al. (2005) used a modelling approach to optimise
the operations of forward and reverse logistics in a green supply
chain. These models and frameworks emphasise the cooper-
ation with supply chain partners (Wong et al., 2009a,b) and
define a variety of characteristics and attributes for GMP. In addi-
tion to these researches, Zsidisin and Hendrick (1998) provided
empirical evidence and identified several factors influencing GMP
such as investment recovery, product design and supply chain
relationships. Increasingly, firms have established linkages of
suppliers (Lun, 2008; Lun et al., 2009a). These linkages and
growth in globalisation can be an element for firms to improve
environmental performance (Yang et al., 2009).
• Environmentally friendly operations: Several GMP models have
been developed from the operational perspective. Handfiled
et al. (2002) developed a decision model to measure environ-
mental practice by using the multiple attribute utility theory
approach. Kainumaa and Tawarab (2006) also adopted the mul-
tiple attribute utility theory method to assess supply chain
performance throughout the life cycle of products and ser-
vices. Using the tool of life-cycle assessment, Faruk et al. (2002)
advanced the adoption of GMP by identifying material acqui-
sition, preproduction, production, distribution, and disposal as
key measures to assess the adoption of GMP. Using a case
study approach, Walton et al. (1998) identified several dimen-
sions to enhance environmental purchasing. Examples of these
dimensions include materials used in product design for the envi-
ronment, product design process, supplier process improvement,
supplier evaluation, and inbound logistics processes.
• Internal management support: There are a number of studies to
examine the relationship between GMP and internal manage-
ment support. Carter et al. (1998) conducted an empirical study to
examine GMP. The study identified six key factors related to GMP
including top management support, middle management sup-
port, firm’s mission, department goals, training for personnel to
purchase environmentally friendly input, and evaluation of pur-
chasing management on GMP. The findings demonstrated that
management support and department goals are factors affecting
GMP. In addition, Zhu and Sarkis (2004) identified commitment
from senior managers, support from mid-level managers, and
cross-functional cooperation from environmental improvements
as factors affecting internal environmental management. In short,
previous studies (Shrivastava, 1995; Guimaraes and Liska, 1995)
suggested that a number of benefits can be achieved by integrat-
ing environmental issues with corporate strategy.
On the other hand, the subject of performance is receiving
increasing interest from both the academic and managerial aspects
(Koufteros et al., 2007; Panayides and Lun, 2009). Environmental
protection activities are embedded in business operations. Enhanc-
ing the business operations efficiently through GMP may bring
benefits to firms. Thus, economic performance may be one of the
drivers for firms to implement GMP. Potential benefits gained
through GMP include decreased cost of energy consumption, mate-
rial purchasing, waste treatment, and waste discharge (Zhu and
Sarkis, 2004). Proactive GMP can prepare an enterprise for supe-
rior performance through improvement of environmental risk
and the development of capabilities for continuous environmental
improvement (Alvarez et al., 2001). There are a number of findings
to support the view that GMP is positively related to firm perfor-
mance (Klassen and McClaughlin, 1996; Judge and Douglas, 1998).
For instance, Rosso and Fouts (1997) linked environmental perfor-
mance to economic performance based on the resource-based view
of the firm. They suggested that improved environmental perfor-
mance resulted in a competitive advantage that was reflected by
the economic benefits. There are two categories of mechanism for
explaining the linkage between environmental performance and
economic performance (Montabon et al., 2007). The first was mar-
ket gains which include experienced based scale economies and
higher margins. This implies that terminal throughput and profit
can be used as performance indicators in the container terminal
industry. The second was ‘cost savings’ such as greater productiv-
ity or lower operating cost due to reduced energy and material
consumption. Hence, operating cost can be used as another per-
formance indicator from the perspective of container terminal
operations.
3.2. Research method
Building on previous studies and earlier exploratory research,
several key elements of GMP are identified. These key elements
of GMP include cooperation with supply chain partners, environ-
mentally friendly operations and internal management support.
This study aims to use a case study to examine these key elements
and the implications on firm performance. A case study research
method can be defined as ‘an empirical inquiry that investigates a
contemporary phenomenon within its real-life context’ (Yin, 1984).
The case study method involves an in-depth examination of a single
instance or event (i.e. a case). It provides a systematic way of look-
ing at the case, collecting data, analysing information, and reporting
the results. A case study is a research strategy to investigate a phe-
nomenon within its real-life context. Case study research relies on
multiple sources of evidence and benefits from the prior model
development and can be based on any mix of quantitative and
qualitative evidence (Eisenhardt, 1989). Therefore, it is an excel-
lent research method to understand a complex issue and extend
experience to what is already known through previous research.
A case study analyses a limited number of events and their rela-
tionships, and it is a widely used research method to examine
real-life situations and provide a foundation for the application of
constructs. It is a common practice in case study research to divide
the factors of interest into parameters, i.e. dependent variable and
independent variable (Meredith, 1998). It is the aim of this study
to investigate GMP in container terminal operations. Case study
attempts to monitor and selectively observe how the independent
variables influence the dependent variables. More specifically, this
study seeks to identify the factors (independent variables) that
affect GMP (dependent variable) in container terminal operations
and examine its association with firm performance.
3.3. Model development
A case study can be used to generate theory or test theory
(Eisenhardt, 1989). A theory is an analytical tool for understanding,
explaining and making predictions about a given subject matter.
To better understand the world, researchers often describe a par-
ticular phenomenon mathematically by means of a function or an
equation (Giordano et al., 2009). A mathematical model is a set of
mathematical relationships (Render et al., 2009). There are a num-
ber of advantages in using a mathematical model: (1) the model
can accurately represent reality, (2) the model can help a decision
maker formulate problems, and (3) the model can provide insight
and information. To generate theory, a research model that uses
mathematical language to represent the essential components of
GMP is developed. The case of Hutchison Port Holdings (HPHs) is
used to test the theory in the next section.

4. 562 Y.H.V. Lun / Resources, Conservation and Recycling 55 (2011) 559–566
The research model of GMP in this study consists of two func-
tions. The first function stipulates that GMP consists of several
elements. Cooperation with supply chain partners, environmen-
tally friendly operation and internal management support are the
three key elements of GMP. The concept of set is used as a funda-
mental tool to construct relations between GMP and its elements.
A set is simply a collection of distinct objects. The objects in a set
are called the elements of the set. If GMP (g) represents the set of
three elements (i.e. cooperation with supply chain partners, envi-
ronmentally friendly operation and internal management support),
the first function can be written as:
g = {c, e, i}
where g is the green management practice;c is the cooperation with
supply chain partners; e is the environmentally friendly operations;
i is the internal management support.
The second function lays down the condition that GMP is related
to firm performance. Hence,
g = r(f )
where g is the green management practice; r is the coefficient that
indicates the strength of the association between g and f; f is the
firm performance.
From the perspective of container terminal operations, firm
performance consists of several elements including terminal
throughput, profitability and efficiency, and cost-effective opera-
tion. If firm performance (f) represents the set of three elements (i.e.
terminal throughput, profitability, and efficient and cost-effective
operation), the second function can be written as:
f = {t, p, o}
where t is the terminal throughput; p is the profitability; o is the
efficient and cost-effective operation.
Hence, GMP consists of the elements of cooperation with sup-
ply chain partners (c), environmentally friendly operations (e) and
internal management support (i) on one hand, and GMP is also
associated with firm performance (f) on the other hand. After the
development of the GMP model, i.e. {c, e, i} = r (f), a case firm
is used to test the theory by examining real-life situations and
provide a foundation for the application of the research model.
The case study approach is useful for identifying the underlying
variables that influence GMP. The ability to accurately identify
the variables from a case study depends on how well the study
correctly develops the research model. The research model of
this study is derived from the two functions, i.e. g = {c, e, i} and
g = r (f) serves as a base to examine GMP in container terminal
operations.
4. The case of Hutchison Port Holdings (HPH)
This study used Hutchison Port Holding (HPH) as the case to
illustrate the application of the research model in a real-life situ-
ation. HPH is the world’s largest container terminal operator with
interests in a total of 300 berths in 49 ports spanning 25 countries
throughout the world. The history of HPH began in 1866 when the
Hong Kong and Whampoa Dock Company was established in Hong
Kong. In 1969, HPH’s flagship operation, Hong Kong International
Terminals (HIT), was established. Drawing on HIT’s operating capa-
bility, HPH has expanded worldwide and become the top global
container terminal operator. HIT is the flagship operation of the
HPH Group, the world’s leading port investor and operator. Pioneer-
ing terminal management techniques and cutting-edge technology,
HIT has become the centre of excellence for the HPH Group. HIT
has diversified its business activities from the traditional role of
a container port operator to develop excellence in terminal oper-
ations based on the principles of efficiency and state-of-the-art
operations.
4.1. Cooperation with supply chain partners
HIT has created an integrated supply chain network with total
logistics management services. HIT responded to the needs of its
supply chain partners by developing service-enhancing initiatives
to deliver a new Terminal Management System (TMS) named as
‘n-Gen’ representing Next Generation. The new TMS uses industry
standard technology such as Java and XML to ensure the system is
able to communicate effectively with partners’ computer systems.
The new TMS consists of a number of unique features to facili-
tate the information flow among supply chain partners within the
terminal community.
The TMS has a number of features. Some examples are listed
below:
◦ Electronic communications: HIT has developed electronic com-
munications to link with its customers and business partners.
Through electronic communications, container shipping docu-
ments are converted into electronic form to improve operational
efficiency and reduce the use of paper. Shipping-related data such
as export booking data, storage instructions, loading/discharging
container data, tractor pre-advice, and empty container deliv-
ery and collection data are communicated with customers and
business partners electronically via the TMS.
◦ Tractor appointment system: The tractor appointment system is
HIT’s scheduling system for collecting containers from truckers.
The system allows business partners to contact HIT by tone-dial
phone or via the Internet. The appointment system enhances cost
efficiency and customer service by ensuring rapid turnaround.
The system also benefits traffic flow with HIT scheduling vehicle
arrivals to avoid congestion in the port area.
◦ Barge identity card system: HIT introduced the bar-code-based
barge identity system (BID) to verify the identity of barge ves-
sels using bar-coding instead of a manual verification process.
BID has the benefits of streamlining barge movements, reduc-
ing paper work, strengthening terminal security, and extending
linkage with barge operators.
To adopt GMP, HIT has launched recycling initiatives for mate-
rials such as paper and polystyrene. HIT also influences its business
partners to adopt GMP by making a demand on the contracts to
its suppliers to use environmentally-friendly materials and dis-
pose of hazardous substances in a responsible manner. To reduce
the amount of paper used, HIT’s Procurement Department has
developed an e-Procurement platform to remove the need for staff
members and vendors to print and circulate paper documents. The
adoption of e-Procurement reduces the use of more than 250,000
sheets of paper a year. As a result, HIT cut paper consumption by
21% in 2007.
4.2. Environmentally friendly operations
HIT actively participates to reduce pollution and promotes the
adoption of GMP throughout its business community. In early 2007,
HIT launched an Environmental Protection Programme (EPD) to
demonstrate its commitment to meet Hong Kong’s Clean Air Char-
ter to reduce sulphur dioxide emissions which is one of the root
causes of acid rain and smog. The Charter, which was drawn up
according to internationally recognised protocols, pledges busi-
ness enterprises to quantify and reduce the energy consumption
of their business activities. Cutting energy consumption reduces
greenhouse gas emissions. To support the reduction of energy con-
sumption, HIT looks for new ways to improve energy efficiency

5. Y.H.V. Lun / Resources, Conservation and Recycling 55 (2011) 559–566 563
and reduce its carbon footprint. HIT supports the EPD because
the programme facilitates the identification of ways to reduce the
negative impact on the environment and contributes to the sustain-
able development of Hong Kong. To implement the EPD, HIT made
building operations environmentally friendly by installing energy-
saving lighting and using solar water heaters. HIT also regulates the
office temperature to maintain a comfortable but energy efficient
working climate.
From the perspective of container terminal operations, an exam-
ple of HIT’s achievement in GMP is the reduction in sulphur dioxide
emission by 90% in 2008. The reduction in emission is gained by
switching many rubber-tyred gantry cranes (RTGCs) from indus-
trial diesel oil (IDO) to ultralow sulphur diesel (ULSD) which is
a cleaner fuel containing a hundredth of the sulphur content. In
addition, HIT adopts GMP by designing environmentally friendly
operation of vehicles such as front loaders, internal tractors and
forklift trucks. Although these green initiatives create an extra
financial burden due to the conversion and modification of equip-
ment, the investment in new equipment can bring operational
savings. For example, converting RTGCs to run on electricity brings
about a reduction in engine-maintenance costs of about 90% plus a
65% reduction in fuel costs. HIT plans to convert 70% of RTGCs from
diesel to electricity by 2010 to eliminate black smoke emissions and
reduce noise levels. For the remaining 30% of RTGCs which will con-
tinue to run on diesel, a variety of innovative modifications will be
implemented. Fuel saving of 57% can be achieved by coupling diesel
engines with heavy-duty batteries, and 12–15% saving is made pos-
sible by reducing the idling speed of crane diesel engines from 1800
to 1500 rpm. HIT also explores the potential of a flywheel system
to generate energy during container moves within the terminals.
4.3. Internal management support
As a leading global container terminal operator, HIT is commit-
ted to adopt GMP. The management team of HIT clearly defines its
environmental policy as follows:
◦ Legal compliance: to comply with environmental regulations and
set guidelines to achieve good environmental performance.
◦ Pollution protection and waste minimisation: to incorporate envi-
ronmental concerns in planning operational decisions to prevent
pollution and reduce energy consumption.
◦ Continual monitoring and improvement: to conduct periodic
internal and external audits to monitor the environmental per-
formance.
◦ Sustainable development: to communicate environmental objec-
tives throughout the firm and its business partners for pursuing
the adoption of GMP.
HIT’s top management commits resources to implement its
environmental policy. HIT also established an ‘Environmental Com-
mittee’ within its organisational structure. The senior management
of HIT, including the Managing Directors, General Managers and
Department Heads are members of the Environmental Steering
Committee. The Environmental Steering Committee is responsible
for formulating environmental policy and monitoring its perfor-
mance. Fig. 1 illustrates HIT’s formal organisational framework by
which environmental tasks are identified and controlled.
4.4. Firm performance
The research model of this study consists of two functions. The
first one proposes that GMP (g) consists of three elements, i.e. coop-
eration with supply chain partners (c), environmentally friendly
operation (e) and internal management support (i). The second
function of the research model suggests that GMP (g) is related
Fig. 1. HIT’s environmental organisational structure.
to firm performance (f). In this study, firm performance consists
of the elements of terminal throughput (t), profitability (p), and
efficient and cost-effective operation (o). A case study approach
is used to test these two functions. A case study can employ an
embedded design, i.e. multiple levels of analysis (Yin, 1984). In this
study, two levels of analysis are conducted: firm level to investigate
adoption of GMP in HPH to examine the first function, i.e. g = {c, e,
i}, and industry level to compare HPH’s performance with other
operators in the industry to evaluate the second function, i.e. g = r
(f). Evidences to validate the research model may be qualitative
and quantitative (Eisenhardt, 1989). This study uses the qualita-
tive (i.e. words) approach to illustrate the first function of the GMP
model and quantitative (i.e. numbers) approach to examine the
second function of the GMP model. Secondary and objective data
taking from Lun and Cariou (2009) are used to validate the link
between environmental performance and economic performance.
Data of the container terminal operators is shown in Table 1. The
total terminal throughput of these seven sample container terminal
operators is 40.70%. It indicates that this study uses 40.70% of the
population size to evaluate the performance implications of GMP.
The terminal throughput and the profit level of HPH rank the
highest among the sample container terminal operators indicat-
ing that the case firm HPH performs well in terms of terminal
throughput and profitability. To examine the operating efficiency
Table 1
Data to evaluate the performance of container terminal operators.
Terminal operator Terminal
throughputa
% of global
throughput
Terminal
profitb
Operating
costb
Eurogate 12.20 2.70% 92.36 647.07
HPH 62.00 13.80% 1456.00 2767.00
ICTSI 2.30 0.50% 51.04 191.56
K Line 4.80 0.70% 61.34 875.26
OOCL 4.80 1.10% 80.30 419.70
PSA 51.29 10.10% 965.60 1470.90
APMT 52.10 11.80% 333.00 1732.00
a
In million TEU.
b
In million USD.

6. 564 Y.H.V. Lun / Resources, Conservation and Recycling 55 (2011) 559–566
Table 2
The DEA results.
DMU HPH ICTSI PSA APMT Eurogate OOCL K Line
Score 1 1 1 0.906 0.696 0.612 0.293
Rank 1 1 1 4 5 6 7
of container terminal operators, it is useful to identify the efficient
container terminal operators by using data envelopment analysis
(DEA). In DEA, efficiency can be defined as the ratio of the out-
put to the input of a production or operation system and the firm
under study is called a Decision Making Unit (DMU). This study
uses the quantitative analytical tool DEA to identify the efficient
DMU. DEA is a quantitative analytical tool to measure and evalu-
ate the efficiency of organisations under study (Boussofiane et al.,
1991). This quantitative analytical tool has grown into a power-
ful analytical tool for measuring and evaluating firm performance.
DEA is a benchmarking technique based on linear programming to
convert input and output measures into a single comprehensive
measure of performance in terms of an ‘efficiency score’ for each
group of DMUs. DEA, as proposed by Charnes, Cooper and Rhodes
(CCR), involves the derivation of efficiency scores of a set of compa-
rable DMUs, relative to one another. The advantages of using DEA
include: (1) it does not require the relative importance or weights
of input and out measures and (2) each input and output variable
can be measured independently in any useful unit, without being
transformed into a single metric (Shimshak et al., 2009).
To examine the efficiency and cost-effectiveness of a DMU, this
study uses the DEA model which was initially proposed by Charnes
et al. as a tool to evaluate the input (i.e. operating cost) and outputs
(terminal throughput and profit). To deal with multiple outputs,
one way to simplify the calculation of efficiency score would be
to weight the various outputs and inputs. In the DEA model, linear
programming is used to determine the weight so as to maximise the
ratio of output to input (Cooper et al., 2007). The optimal weights
generally vary from one DMU to another DMU. Thus, the weights
in DEA are derived from the data instead of being fixed in advance.
Each DMU is assigned a set of weights with values that may vary
from one to another. This study uses DEA-Solver software to run
the data. According to Table 2, the DEA results show that three
DMUs obtained a score equal to 1 while the scores of other DMUs
are 0.906, 0.606, 0.612 and 0.293, respectively. The results indicate
that three DMUs are efficient container terminal operators and four
DMUs are inefficient container terminal operators when using one
input (i.e. operating cost) and two outputs (i.e. terminal throughput
and profit) to evaluate their firm performance. The results also sug-
gest that HPH (with DEA score = 1) is an efficient container terminal
operator. The results support that the case firm, HPH, performs well
in terms of terminal throughput (t), profitability (p), and efficient
and cost-effective operation (o).
With DEA, each DMU is evaluated by comparing its performance
with other DMUs. DEA assigns an efficiency score of 100% (i.e. 1.00)
to the efficient DMUs. Inefficient DMUs receive lower efficiency
scores depending on how efficiently they use their inputs to gen-
erate outputs compared to the efficient DMUs. One of the greatest
values of DEA is that DEA identifies a set of efficient DMUs that
constitute its benchmarking for the inefficient DMUs. It provides
targets for the inefficient DMUs to improve their performance.
The results suggest that HPH (with DEA score = 1.00) is one of the
efficient DMUs after adopting GMP. A longitudinal study is also
conducted to evaluate the performance differences with the imple-
mentation of GMP in HPH. A longitudinal study involves repeated
observations of the same items and compares the results over peri-
ods of time. HPH started to implement GMP practices in early 2003.
It is one of the companies committed to improving the environ-
mental performance in Hong Kong and received the Environmental
Table 3
Data to evaluate the performance of container terminal operator (in 2002).
Terminal operator Terminal
throughputa
Operating
costb
Terminal
profitb
HPH 27.00 1245.30 742.40
ICTSI 1.00 71.70 13.60
PSA 19.10 652.20 586.30
a
In million TEU.
b
In million USD.
Performance Certificate of Merit from the Business Environment
Council in October 2003. To identify the variation of firm perfor-
mance, data of terminal throughput, operating cost and terminal
profit in 2002 are collected from Drewry (2002). Table 3 shows the
secondary data of the three efficient DUMs (i.e. HPH, ICTSI and PSA).
The DEA results (as shown in Table 4) indicate that one DMU
obtained a score equal to 1 while the other DMUs can be classified
as ‘inefficient firms’ when using one input (i.e. operating cost) and
two outputs (i.e. terminal throughput and profit) to evaluate their
firm performance in 2002. The results suggest that HPH was an
inefficient container terminal operator as its DEA score was 0.740
(i.e. lower than 1.00) in 2002. On the other hand, the findings of
this study indicate that the performance of the case firm, HPH, has
evolved to an efficient DMU (with DEA score = 1.00 as shown in
Table 2) after the adoption of GMP.
5. Discussions
This study develops a GMP model which consists of two func-
tions. According the first part of the model, i.e. g = {c, e, i}, GMP
consists of three elements including cooperation with supply chain
partners (c), environmentally friendly operation (e) and inter-
nal management support (i). The results appear to adequately fit
the proposed linkage which illustrates that GMP of the case firm
consists of these three elements. To investigate the performance
implication of GMP, the results of this study also indicate that
the case firm (i.e. HPH) has good performance in terms of termi-
nal throughput (t), profitability (p) and efficient and cost-effective
operation (o). Hence, using a case study approach, elements of GMP
are verified and its relationship with firm performance is also vali-
dated. The implications of these results are that GMP should be well
rounded and include various elements. From a research perspec-
tive, the identification of GMP elements in this study could be used
as a base to develop a comprehensive picture of organisational GMP
adoption. Practically, firms should strive to improve on the multi-
ple dimension of GMP implementation in order to arrive at the full
realisation of benefits which may include performance enhance-
ment in terminal throughput (t), profitability (p), and efficient and
cost-effective operation (o).
The findings suggest that GMP consists of a number of elements.
Cooperation with supply chain partners (c) has been identified as
one of the elements of GMP. The success of GMP requires internal
Table 4
The DEA results (in 2002).
DMU HPH ICTSI PSA
Score 0.740 0.476 1
Rank 2 3 1

7. Y.H.V. Lun / Resources, Conservation and Recycling 55 (2011) 559–566 565
cross-functional cooperation and external cooperation with other
partners in the whole supply chain. Experiences of GMP to improve
environmental performance can be shared across the networks of
suppliers (Lun et al., 2009b). Adoption of GMP by a dominant firm
may also influence the supplier-selection criterion which provides
pressure to suppliers in the supply chain to self-regulate and adopt
GMP (Christmann and Taylor, 2001). The second GMP element is
environmentally friendly operation (e). Zhu and Sarkis (2004) indi-
cated that GMP is directly linked with business operations and firm
performance. For instance, GMP may result in cost saving in terms
of a decrease of cost for energy consumption, and fees for waste
treatment and discharge. Environmentally friendly operation (e)
is an emerging tool to improve environmental performance by
addressing product functionality while simultaneously minimis-
ing environmental impacts. Over its life cycle, a high proportion of
operational cost and quality of product is determined in the opera-
tion design. Design of container terminal operations has been used
as a cost minimisation and quality control tool. With the adoption of
GMP, container terminal operations should be more environmen-
tally focused. Besides, the pressure from regulatory requirements
may be one of the reasons for firms to adopt an environmentally
friendly operation. Internal management support (i) has been iden-
tified as the third element of GMP. Carter et al. (1998) found that
support from management was a key to implementing GMP suc-
cessfully. A firm’s top management is in charge of maximising
shareholder benefits through their strategic leadership and deter-
mining the direction of the firm (Hamel and Prahalad, 1989). Hence,
commitment from top management is one of the most important
functions of GMP as these are not only green initiatives but also due
to technological and commercial reasons (Bowen et al., 2001).
Due to stricter regulations and increased concerns from the
community, firms need to effectively adopt GMP into their busi-
ness operations. The examination of the second function of this
study illustrates that the relationship between GMP and firm per-
formance is promising. Findings of this study indicate a positive
relationship exists between the adoption of GMP and firm perfor-
mance. The adoption of GMP does not have a negative impact on
firm performance and demonstrates that opportunities do exist in
the container terminal industry to enhance the adoption GMP, and
these evidences play a role in lessening the barrier to GMP adoption.
GMP can emerge as an important prototype for firms to achieve
the objectives of profit and market share on the one hand, and to
enhance a sustainable economy on the other hand. Hence, firms
should strive to adopt GMP in order to arrive at the full realisa-
tion of benefits including enhancement in terminal throughput (t),
profitability (p), and efficient and cost-effective operation (o). Firms
should also incorporate performance measurement systems, con-
tinuous improvement and benchmarking of GMP in their business
operations to provide a good overview of how the adoption of GMP
affects its firm performance.
6. Conclusions
Contributions of this study can be seen from both the manage-
rial and theoretical perspectives. The container terminal industry
seems to have reached the phase of examining sustainability prac-
tice. This is a timely study to provide an insight for mangers from
several aspects. First, supplemented with other studies that focus
on external drivers to adopt sustainability practices, this study
suggests that internal operations of a firm (e: environmentally
friendly operations) is one of the key elements of GMP. Second,
this study proposes a function of the GMP model, i.e. g = {c, e, i},
to illustrate the three key elements of GMP. By using a case firm
to validate the research model, GMP in HPH can serve as a role
model for other operators to benchmark. Third, by understanding
the key elements of GMP and the linkage with firm performance,
results of this study facilitate managers of container terminal oper-
ators to make a strategic decision about whether or not to adopt
GMP. Fourth, research on firm performance of ‘best practices’ on
adoption GMP in the container terminal industry has so far been
ignored although the application of sustainability practices has
been actively debated. This study provides an insight for managers
to understand the best practices of GMP adoption.
Theoretically, this study proposes a linkage between GMP and
the opportunities to achieve comparative advantage. Adoption
of GMP involves a set of business processes that require firms
to assess their environmental impacts, determine environmental
goals, implement environmental operations, monitor goals attain-
ment, and undergo management review. During the adoption
stages, GMP assists firms to scrutinise their internal operations,
engage employees in environmental issues, continually monitor
for environmental improvement, and increase their knowledge
about their operations. These actions facilitate the improvement
of firms’ internal operations and create opportunities to gain com-
petitive advantage. GMP also provides opportunities for firms to
evaluate their internal operations and linkage with other firms
to achieve greater organisational efficiency. As GMP involves con-
tinual environmental and organisational improvement, firms may
enjoy further opportunities for comparative advantage.
Overall, this study provided an insight into an emerging field of
the relationships between sustainability and operational practices
and firm performance. In summary the following GMP issues and
lessons are learned from this study: (1) adoption of GMP seems to
have a win-win relationship in terms of economic and environmen-
tal and performance, (2) cooperation with supply chain partners
and environmentally friendly operations quality management are
key elements of GMP, and (3) internal management support is
important for firms to adopt GMP. Although the findings arrive at
these overall results, there are several limitations of this study. First,
the sample is based on a leading global container terminal operator.
The firm only recently adopted many of the elements of GMP and
may have very different characteristics compared to other firms in
the industry. The issue of whether firms in other forms of opera-
tions have similar results needs to be further investigated. Second,
due to difficult empirical data collection, we used secondary data to
examine the second function of the GMP model. An advantage of the
convenience sample is that it avoids data collection problems and
it provides a basis for comparison. However, reliability and validity
is a concern when using secondary data. Third, the study generally
examines the relationship between GMP and performance. Further
analyses for other company characteristics will be needed to gener-
alise the industrial practices. Fourth, this study examines the firm
performance influenced by GMP. Other aspects such as strategic
financial and organisational performance should also be investi-
gated. In container terminal operations, these strategic measures
may include ownership in the forms of state, multinational and
joint venture operations.
Acknowledgment
The author is thankful to the referees for their constructive
comments on the earlier versions of this paper. This research is
supported in part by The Hong Kong Polytechnic University under
grant number J-BB77.
References
Almotairi B, Lumsden K. Port logistics platform integration in supply chain
management. International Journal of Shipping and Transport Logistics
2009;1(2):194–210.
Alvarez G, Jimenez JB, Lorente JC. An analysis of environmental management, organi-
zational context and performance of Spanish hotels. Omega 2001;29(6):457–71.

8. 566 Y.H.V. Lun / Resources, Conservation and Recycling 55 (2011) 559–566
Bevilacqua M, Ciarapica FE, Giacchetta G. Development of sustainable product life
cycle in manufacturing firms: a case study. International Journal of Production
Research 2007;45(18/19):4073–98.
Boussofiane A, Dyson RG, Thanassoulis E. Applied data envelopment analysis. Euro-
pean Journal of Operational Research 1991;52:1–15.
Bowen FE, Cousins PD, Lamming RC, Faruk AC. The role of supply manage-
ment capabilities in green supply. Production and Operations Management
2001;10(2):174–89.
Carter CR, Ellram LM, Kathryn LM. Environmental purchasing: Benchmarking our
German counterparts. International Journal of Purchasing and Material Man-
agement 1998;34(4):28–38.
Christmann P. Effects on best practices of environmental management on cost
advantage: the role of complementary assets. Academy of Management Journal
2000;43(4):663–80.
Christmann P, Taylor G. Globalization and the environment: determinants
of firm self-regulation in China. Journal of International Business Studies
2001;32(3):439–58.
Cooper WW, Seiford LM, Tone K. Data envelopment analysis. New York: Springer;
2007.
Darnall N, Edwards D. Predicting the cost of environmental management system
adoption: the role of capabilities, resources and ownership structure. Strategic
Management Journal 2006;27:301–20.
Drewry. Annual review of global container terminal operators. London, UK: Drewry
Shipping Consultants Limited; 2002.
Eisenhardt KM. Building theories from case study research. Academy of Manage-
ment Review 1989;14(4):532–50.
Faruk AC, Lamming RC, Cousing PD, Bowen FE. Analyzing, mapping, and managing
environmental impacts along the supply chain. Journal of Industrial Ecology
2002;5(2):13–36.
Giordano FR, Fox WP, Horton SB, Weir MD. Mathematical modeling. Cengage Learn-
ing 2009.
Guimaraes T, Liska K. Exploring the business benefits of environmental stewardship.
Business Strategy and the Environment 1995;4(1):9–22.
Hamel G, Prahalad CK. Strategic intent. Harvard Business Review 1989;67(3):63–76.
Handfiled R, Walton S, Sroufe R. Applying environmental criteria to supplier assess-
ment: a study of the application of the analytical hierarchy process. European
Journal of Operations Research 2002;141:70–87.
Hart SL. A natural resource-based view of the firm. Academy of Management Review
1995;20:986–1014.
Hock V, Erasmus RI. From reversed logistics to green supply chain. Logistics Solutions
2000;2:28–33.
Judge WQ, Douglas TJ. Performance implications of incorporating natural envi-
ronmental issue into the strategic planning process: an empirical assessment.
Journal of Management Studies 1998;35(2):241–62.
Kainumaa Y, Tawarab N. A multiple attribute utility theory approach to learn and
green supply chain management. International Journal of Production Economics
2006;101(1):99–108.
Klassen RD, McClaughlin CP. The impact of environmental management on firm
performance. Management Science 1996;42(8):1199–214.
Klassen RD, Whybark CD. The impact of environmental technologies on manufac-
turing performance. Academy of Management Journal 1999;42(6):599–615.
Koufteros XA, Nahm AY, Cheng TCE, Lai KH. An empirical assessment of a
nomological network of constructs: from customer orientation to pull pro-
duction and performance. International Journal of Production Economics
2007;106(2):468–92.
Lun YHV, Cariou P. An analytical framework for managing container terminals. Inter-
national Journal of Shipping and Transport Logistics 2009;1(4):419–36.
Lun YHV, Browne M. Fleet mix in container shipping operations. International Jour-
nal of Shipping and Transport Logistics 2009;1(2):103–18.
Lun YHV, Lai KH, Cheng TCE. A descriptive framework for the development and
operation of liner shipping network. Transport Reviews 2009a;29(4):439–57.
Lun YHV, Lu CS, Lai KH. ‘Introduction to the special issue on transport logis-
tics and physical distribution’. International Journal of Production Economics
2009b;122:1–3.
Lun YHV, Pang KW, Panayides PM. Organizational growth and firm performance in
the international container shipping industry. International Journal of Shipping
and Transport Logistics 2010;2(2):206–23.
Lun YHV. Adoption of electronic commerce by logistics service providers in Hong
Kong. Saarbrucken, Germany: VDM; 2008.
Lun YHV, Wong WYC, Lai KH, Cheng TCE. Institutional perspective on the adoption of
technology for security enhancement of container transport. Transport Reviews
2008;28(1):21–33.
Meadows DL, Meadows DH, Randers J, Behrens WW. The limits to growth: a report
for the club Rome’s project on the predicament of mankind. London: Earth
Island; 1972.
Melnyk SA, Sroufe R, Calantone R. Assessing the impact of environmental man-
agement systems on corporate and environmental performance. Journal of
Operations Management 2003;21:329–51.
Meredith J. Building operations, management theory through case field research.
Journal of Operations Management 1998;16:441–54.
Netherwood A. Environmental management systems. Corporate Environment Man-
agement 1998;1:35–58.
Montabon F, Sroufe R, Narasimhan. An examination of corporate reporting, envi-
ronmental management practices and firm performance. Journal of Operations
Management 2007;25:998–1014.
Niemann J, Tichkiewitch S, Westkamper E. Design of sustainable product life cycles.
Springer; 2009.
O’Brien C. Global manufacturing and the sustainable economy. International Journal
of Production Research 2002;40(5):3867–77.
Panayides PM, Lun YHV. The impact of trust on innovativeness and supply
chain performance. International Journal of Production Economics 2009;122:
35–46.
Reinhardt FL. Environmental product differentiation: implications for corporate
strategy. California Management Review 1998;40(4):43–73.
Render B, Stair RM, Hanna ME. Quantitative analysis for management. Pearson 2009.
Rosso MV, Fouts PA. A resource based perspective on corporate environ-
mental performance and profitability. Academy of Management Journal
1997;40(3):354–559.
Sarkis J. A strategic decision marking framework for green supply chain manage-
ment. Journal of Clear Production 2003;11(4):397–409.
Sharma S, Henriques I. Stakeholder influences on sustainability practices in the
Canadian forest products industry. Strategic Management Journal 2005;26:159–
80.
Sheu JB, Chou YH, Hu JJ. An integrated logistics operational model for green supply
chain management. Transportation Research: Part E 2005;41(4):287–313.
Shimshak DG, Lenard ML, Klimber RK. Incorporating quality into data envelop-
ment analysis of nursing home performance: a case study. OMEGA 2009;37:
672–85.
Shrivastava P. Environmental technologies and competitive advantage. Strategic
Management Journal 1995;6:183–200.
Song DP, Dong JX, Roe M. Optimal container dispatching policy and its structure in a
shuttle service with finite capacity and random demands. International Journal
of Shipping and Transport Logistics 2010;2(1):44–58.
Starkey R. The standardization of environmental management systems. Corporate
Environmental Management 1998;1:61–89.
Ugboma C, Ugboma O, Damachi B. A comparative assessment of service quality per-
spectives and satisfaction in ports: evidence from Nigeria. International Journal
of Shipping and Transport Logistics 2009;1(2):172–93.
Walton SY, Handfield RB, Melnky ST. The green supply chain: integrating suppliers
into environmental management process. International Journal of Purchasing
and Materials Management 1998(Spring):2–11.
Welford R. Linking quality and the environment: a strategy for the implementation
of environmental management systems. Business Strategy and the Environment
1992;1:25–34.
Wong CWY, Lai KH, Cheng TCE. Complementarities and alignment of information
systems management and supply chain management. International Journal of
Shipping and Transport Logistics 2009a;1(2):156–71.
Wong CWY, Lai KH, Ngai EWT. The role of supplier operational adaptation on the per-
formance of IT-enabled logistics under environmental uncertainty. International
Journal of Production Economics 2009b;122(1):47–55.
Yang J, Wong CWY, Lai KH, Ntoko AN. The antecedents of dyadic quality performance
and its effect on buyer-supplier relationship improvement. International Journal
of Production Economics 2009;120(1):243–51.
Yin RK. Case study research: design and methods. Sage; 1984.
Zhu QH, Sarkis J. Relationships between operational practices and performance
among early adopters of green supply chain management practices in Chinese
manufacturing enterprise. Journal of Management 2004;22:265–89.
Zhu QH, Sarkis J, Lai KH. Confirmation of a measurement model for green supply
chain management practices implementation. International Journal of Produc-
tion Economics 2008;111(2):261–73.
Zsidisin GA, Hendrick TC. Purchasing’s involvement in environmental issues:
a multi-country perspective. Industrial management and Data Systems
1998;7:313–20.