Relationship between management practice and organisation performance under European Union directives such as RoHS: A case-study of the electrical and electronic industry in Taiwan

Abstract

The aim of this study is to investigate the effects of the European Union Restriction of Hazardous Substances (RoHS) and Waste Electrical and Electronic Equipment (WEEE) directives set by the European Union on the financial and environmental performances of Taiwan’s electrical and electronic companies adopting the green supply chain management. A literature review, in-depth interviews and questionnaires were used as our hypothetical supports. One hundred and fifty-one certified International Organization for Standardization 14001 electrical and electronic companies were randomly selected as the study subjects. Data analyses and hypothesis tests were performed using Statistical Package for the Social Sciences software, and Structural Equation Modelling was used to analyse the pathway model and to test the hypothetical structure in this study. We found that these companies mostly adopted green manufacturing practices and green purchasing practices in order to meet the RoHS and WEEE directives. The results of pathway diagram analysis using structural equation modelling (SEM) also showed that the green supply chain management adopted by the study companies had a positive effect on both their financial (p < 0.01) and environmental (p < 0.01) performances, and therefore might be used as a reference for Original Equipment Manufacturing and Original Designing and Manufacturing industries in other Asian Pacific countries.

Keywords: RoHS, WEEE, green supply chain management, financial performance, environmental performance