The relationship between environmental cost on organisational performance and environmental management system: a structural equation modelling approach

• Published in: Measuring business excellence Vol. 26; no. 4; pp. 496 - 507
• Main Authors: Mohd Fuzi, Nursyazwani, Habidin, Nurul Fadly, Adam, Sabrinah, Ong, Sharon Yong Yee
• Format: Journal Article
• Language: English
• Published: Bradford Emerald Publishing Limited 02.11.2022; Emerald Group Publishing Limited
• Subjects: Cost control; Decision making; Environmental accounting; Environmental management; Environmental regulations; Hypotheses; Management accounting; Manufacturing; Structural equation modeling; Environmental management system; Manufacturing industries; Structural equation modelling; Environmental cost; Environment; Modelling; Manufacturing; Organizational performance; Performance
• ISSN: 1368-3047; 1758-8057; 1368-3047
• DOI: 10.1108/MBE-03-2021-0039

Purpose This study aims to examine the relationship between environmental cost (EC) on organisational performance (OPM) through an environmental management system (EMS) as the mediating variable. Design/methodology/approach A total of 2,600 manufacturers were identified and consequently selected as the entire study population. Additionally, this study used the structural equation modelling technique to identify the mediator effects of EMS between EC and OPM. Findings The EC and EMS relationship on OPM produced direct and indirect consequences. Hence, it is concluded that manufacturing industry in Malaysia are focused on the OPM when implementing EC and EMS. Originality/value The model would incorporate EC and EMS implementation on OPM in the Malaysian manufacturing industry. This study could also be advantageous to the industry in improving EC, EMS and OPM.