Exploring the Measures of Sustainable Business Performance in

Deployment of Industry 4.0 in Indian Manufacturing Industries: A PLS-

SEM Approach
Pritesh Shukla1[0009-0009-1857-1956], Avadhesh Dalpati2[0000-0003-0909-4990], Ramesh Chandra Gupta3[0000-0002-6545-6362]
1PhD Research Scholar, Department of Industrial and Production Engineering (IPE), SGSITS, Indore (MP; India)
2,3Professor,
Department of Industrial and Production Engineering (IPE), SGSITS, Indore (MP; India)

Abstract: Environmental issues are arising due to adverse countries trying to implement such technologies
growth in population globally leading to affecting our which will not impact environmental sustainability,
environment negatively with many problems like global also many manufacturing organizations recognize
warming, resource depletion, climate change, air
the significance of sustainable practices and are now
pollution, water scarcity, and many more, still
looking at incorporating them as part of their
academicians and researchers are not giving adequate
attention towards environmental sustainability, strategy for the future. To bring strengthen financial
particularly in considering the sustainable business performances, companies have faith that by
performance measures to safeguard the environment and adopting sustainable development goals (SDG’s), it
sustainability challenges. The present study tries to fill the can be easily achievable. With the adoption of SDG,
research gap by investigating the impact of environmental, companies initiated to emphasize on 3E’s namely
economical, and operational drivers on sustainable Environment, Economy, and Ecology. This new
business performances in the context of Indian paradigm brings much more attention to the
manufacturing industries. The significant drivers to
researcher to establish a relationship between
support sustainable business performances are tested
Sustainable practices and sustainable business
using data collected by descriptive survey in the time span
of 2021-2023 and further analyzed using the PLS-SEM performance [3] [4]. Sustainability indicators
approach through SmartPLS4 software. Results findings constitute ecology, environment, and economics but
show that economical sustainable drivers highly influence many researchers have argued that in the context of
sustainable business performance, operational sustainable sustainable business performance indicators, only
drivers have a medium effect while environmental drivers ecology, environment, and operations have been
have a low effect on sustainable business performance. taken under consideration [5] [6] [7] [8]. Globally,
The study offers several repercussions underlying the sustainability stands out as the most important
relevance of sustainable business performance in the
challenge, ignorance of which results in enormous
context of encouraging Indian manufacturing industries to
financial losses to manufacturing firms. It has been
attain sustainability, the above research findings are also
beneficial for academicians and researchers looking for noted that sustainable manufacturing practices have
improvements. been effectively implemented in developed
countries but still, these practices are rather difficult
Keywords: Sustainability, Sustainable Business to adopt in underdeveloped or developing countries.
Performance, PLS-SEM, Environmental, Operational, The new cutting-edge technologies such as the
Economical. Internet of Things (IoT), Internet of Services (iOS),
blockchain, Big data analytics (BDA), Artificial
Introduction Intelligence (AI), and others, those offered by
present business trends, can be referred to as falling
under the umbrella of Industry 4.0 technologies in
The concept of sustainability has started to emerge
context to manufacturing. Such cutting-edge
as the world's population is expanding quickly. As a
technologies can contribute to achieving sustainable
result, humans are now dealing with several
business performance directly or indirectly [9] [10].
problems that are negatively affecting our
environment, such as global warming, resource
depletion, climate change, air pollution, water Indian manufacturing industries are dealing with
scarcity, and many others. This concept of technological competition worldwide as the market
sustainability has been accepted worldwide for the is upgrading continuously. To withstand in the
betterment of our planet [1]. [2] argue that, In the last market, organizations are required to be sustainable
two decades, safeguarding the environment and in the context of environmental, economic, and
sustainability challenges has brought the attention of social measures. Thus, introducing Industry 4.0 will
researchers globally. The government of many be extremely helpful in such situations [11]. To build

1
an organization “Sustainable”, it is very important to Conventional business systems are more focused on
adopt technologies of Industry 4.0. In the Fourth economic aspects only, while to overcome the
Industrial Revolution era, sustainable business present challenges sustainable business systems
performances are critical for success in a fiercely focus on the 3 E’s namely environment, ecology, and
competitive environment. To attain sustainable economics. The manufacturing sector especially in
business performance, developing countries like developing countries like India finds it challenging
India are confronted with many societal and to deploy sustainable business systems [18]. To cope
technical obstructions [12]. This problem arises with the SDGs suggested by the UN, the
because of a shortfall of resources as the population manufacturing sector requires to be shifted totally,
of the world is increasing adversely. To overcome which can be achieved through integrating digital
this societal and technical obstruction, it is crucial to technologies. To tackle present environmental
adopt Industry 4.0 technologies in developing challenges, deployment of the Fourth Industrial
nations. The main objective of Industry 4.0 adoption Revolution is a must, resulting in a more stable
is to achieve a high degree of effectiveness in economy [19]. In the modern day, Industry 4.0 is the
operation and productivity [13]. The digital most breakthrough technology to increase
revolution was enhanced by implementing Industry productivity and the efficiency of manufacturing
4.0 technologies through the new performance units. To change the way that services are provided,
measures of organizations, increased technological and things are produced, there needs to be a
infrastructure and funds, streamlining the processes, paradigm shift. Industry 4.0 technologies have not
and getting corporations from Industries. With the yet gained widespread adoption, but they may
introduction of cutting-edge sensor technologies and expand the employment of SDGs. Currently, it is
equipment monitoring, data may be acquired easily challenging to demonstrate how Industry 4.0
in an increasing way, enabling the analysis of technologies may be linked with sustainability, and
production processes [14]. their effects, whether positive or negative are not
understood. To develop a sustainable Industry 4.0
Industry 4.0 technologies help in enhancing for the manufacturing sectors, there is also no
production efficiency and impact significantly on sufficient structure by which this incorporation of
environmental and social sustainability goals. To sustainability and Industry 4.0 technology is carried
contribute to sustainable development globally, it is out [20].
a must to implement Industry 4.0 technologies, on
the other hand, companies also need to carefully Manufacturing industries not achieving higher
assess each technology before implementing them as sustainability as the unattainability of strategic
each has a specific impact on environmental and sustainable business models [21]. Some research
social sustainability goals [15]. Manufacturing published previously has not considered operational
companies can improve sustainable business sustainable measures to attain sustainability [6]
performances by maintaining an operations which can be useful for manufacturing industries in
management perspective. The manufacturing sector adopting sustainable business performance models.
is under intense pressure to implement sustainable Additionally, [22] articulated that capacitive
conscious methods throughout its entire business to capacities must be investigated when operational
achieve sustainable business performance. [6]. enablers are considered. A roadmap to improve
Further, firms need to assess their overall sustainability is still not discussed in previous
performance keeping sustainable measures to deal findings. In this research, the author tries to fill the
with the issues they are facing with conventional gap investigated by literature, in the context of
models [8]. Digital transformation is possible due to Sustainable Business Performance drivers and
Industry 4.0. Society’s lives and workplaces have competitive capabilities for Indian manufacturing
undergone profound shifts because of digital industries. Despite recent studies on sustainable
transformation and individuals are not even aware of business performance, there is still limited research
the potential that Industry 4.0 might bring for in the context of Indian manufacturing industries.
sustainability [16]. The fourth industrial revolution
will impact overall business performance by Previous findings consider sustainability but only a
redefining how products are originated, developed, few studies investigated sustainable business
transported, and disposed of. Industry 4.0 is still a performance, and only a few researchers focus on
new concept in developing countries like India and operational sustainable drivers along with economic
needs to evaluate and prioritize its technologies for and environmental drivers. In short, the present
its efficient approach to sustainable business study expects to examine the impact of
emphasizing the manufacturing sector [17]. environmental drivers, economical drivers, and
operational drivers on sustainable business

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performance and its relationship with competitive countries by employing technologies of Industry 4.0.
capabilities. For this, firstly author investigates the For this, a large-scale survey is conducted, and
influencing drivers of sustainable business further collected data is tested and validated using
performance through an extensive literature review the Robust Best Worst method. The findings of this
by secondary data which is published previously, study concluded that economic, and environmental
and then finalizes the questionnaire by focus group. measures significantly influence the acceptance of
Further primary data is collected through the survey. sustainability.
Then, SmartPLS4 is used to validate the results [8] proposed a framework in context to Industry 4.0,
through Partial Least Square Structural Equation sustainable cleaner production, and circular
Modelling (PLS-SEM) approach. Considering the economy to categorize and rank the feasible
above gaps in the literature, the objective of the solutions for the adoption of sustainability for the
current study is to answer the critical research manufacturing sector by a qualitative and
questions stated below- quantitative mixed method approach. Delphi method
is used, and prioritization of variables is performed
• To identify drives of Sustainable Business using the Best-Worst method. The existing
Performances framework is validated using a case study approach.
• To identify the relationship of drivers with In the present study, the authors use MCDM tools to
Sustainable Business Performances. strengthen the adaptability of the proposed model.
• To identify the impact of Sustainable Business The finding of the study suggested that circular
Performances on competitive capabilities. economy elements are most impactful in enhancing
• To test the structural model and validate the the performance of sustainability, followed by
above relationships using the PLS-SEM model. Industry [Link] increase the implication of
sustainability, reuse, and recycling of material, clean
The remaining part of the paper is structured as
environment, and supply chain strategies are the
follows: In section 2, a research context is described,
most crucial variables to adopt.
including the concept of Industry 4.0, followed by
[21] addresses and integrates the drivers of Industry
the concept of Sustainability and the concept of
4.0 and Sustainability. The author identified 20
Sustainable Business performance, in section 3, the
drivers and analyzed their relationships using the
research hypothesis is described, in section 4 data
ISM approach, and these drivers were further
source and methods provided which further
grouped by MICMAC analysis. The primary
described by measures and instrument development,
outcomes are management support and involvement,
target population and sampling, and data analysis is
as well as regulations from the government and
performed, section 5 involves research findings
policies to support Industry 4.0. In the future, the
presented by measurement model assessment
author suggested that more drivers should be
followed by evaluation of the structural model,
considered to increase the effectiveness of the
structural model assessment, in section 6 results
policies.
findings are presented followed by discussion and
conclusion, and limitations and future research
directions Concepts of Sustainability

Research Context [22] proposed a model to enhance sustainability and

production drivers for SMEs through the
Concept of Industry 4.0 technological shift driven by Industry 4.0. data is
collected through a random sampling method which
[9] suggested that sustainability now a day’s is the is further evaluated by PLS-SEM. The findings of
most significant challenge globally, but still the research show that managerial leadership,
deployment of sustainability in developing countries collaborative efforts, and IT capabilities are the most
is comparatively lesser. The new innovative significant in the context of the deployment of
technologies such as Artificial Intelligence, Big data Industry 4.0 and sustainability.
analytics, cloud computing, and machine learning [23] proposed a model based on sustainability
are termed technologies of Industry 4.0 in the addressing its influence on technologies of the
context of the manufacturing sector. It is noted that fourth industrial revolution. The model was tested
these technologies will impact sustainability, either and validated in the plastic industry by the fuzzy
directly or indirectly. This study focuses on the TOPSIS multi-criteria method by grouping the
development of a framework to adopt sustainability technologies of the fourth industrial revolution. The
into the manufacturing sector of developing finding of the study validates that BDA components,
the Internet of Things, sensors, and cyber-physical

3
systems are the enablers for sustainable Research Hypothesis
development, and simultaneously study found that
the above-stated technologies have a significant As the outcome of the research mentioned above,
favorable impact on economic measures. For future our fundamental framework emerged by
studies, operational aspects of the fourth industrial classification of Environmental drivers, operational
revolution must be considered. drivers, and economical drivers in the context of
[24] proposed that researchers are required to Sustainable Business Performance. The research
understand the significant measures to achieve hypothesis is divided into four groups. The first
sustainability. The author focuses on the discussion three groups include nine hypotheses related to the
of existing sustainable business models and brings impact of Environmental, Operational, and
out the most important measures necessary for Economical drivers on Sustainable Business
achieving sustainability. For this, conceptual Performance while the last group contains three
research methodology is applied. The findings of the hypotheses related to the impact of Sustainable
study suggested nine significant measures useful to Business Performance on competitive capabilities.
implement sustainability into a company and Environmental drivers of Sustainable Business
furthermore to meet customer needs. Performance
[19] suggested that environmental sustainability can In accordance [23], states that environmental pillars
be improved by the deployment of Industry 4.0 have a positive effect on the adoption of Sustainable
technologies, whereas changes in energy Business Models in the context of Industry 4.0
consumption patterns will not lead to the same adoption. Reducing and reusing waste and
results. Results show that environmental increasing recycling and renewable resources are
improvements will not automatically improve by feasible. Deployment of sustainable development by
technologies of Industry 4.0 rather, it will end up manufacturing firms improves them and assists them
resulting in greater sustainable economic in accomplishing their intended environmental
development achieved by supportive measures. performance results. It allows businesses to provide
importance to their customers by developing
Concepts of Sustainable Business Performances products and services based on their staff’s green
expertise and competence in environmentally
[13] explained the impact of Industry 4.0 to foster conscious manufacturing practices [5]. According to
Sustainable business performances in SMEs. [25], environmental considerations are important
Elements of Industry 4.0 are analysed using PLS- motivators for implementing Industry 4.0 and
SEM. Results show that in the progress of inspire the concept of innovative sustainable
Sustainable business performances, Industry 4.0 business models to promote sustainability.
elements play a vital role. Organizational structures The following hypotheses have been developed as a
and methods provide a highly positive relationship result:
between Industry 4.0 and Sustainable business H1a. Reduced consumption of
performance. toxic/hazardous/harmful material impact positively
[5] examined a conceptual framework that posits a sustainable business performance.
relationship between sustainable business
performance and innovative environmental H1b. Educating customers about sustainability has a
practices to explain the concept of green sustainable positive impact on sustainable business
business. PLS-SEM is used to test and validate a performance.
conceptual model. The findings of this study
indicate that innovative environmental practices can H1c. Reduce/recycling/remanufacturing has a
lead to sustainable business performance. positive impact on sustainable business
[12] address the contribution of societal and performance.
technological issues in achieving sustainable
business performance by validating results from a Operational drivers of Sustainable Business
survey by a random sampling method and analysing Performance
the data by PLS-SEM. The findings of the research
suggested that societal and technological measures It is very crucial to identify organizational measures
performed a key part in strengthening sustainable to maintain a standard process of decision-making
business performance. Furthermore, strategic and strategic thinking. Incorporating strategies, and
alignment was critical in highlighting the positive organizational measures are very significant, and
impact of societal and technological variables on the doing so will also help employees plan and create
sustainable business performance of the firm.

4
designs that are appropriate [24]. This study is one H3a. Reduced waste treatment costs impact
of many that indicates operational performance positively sustainable business performance.
measures for the agroindustry's adoption of green
supply chain management in attaining sustainability H3b. Reducing penalty compensation for ecological
[2]. According to [25], to attain a sustainable accidents positively impacts sustainable business
business model in a manufacturing firm, performance.
transparency and improved technologies are vital, H3c. Reduced rejection and rework cost impact
consequently allowing us to share accurate data on positively sustainable business performance.
time among the supply chain members. Operational
measures are essential for the adoption of Industry Impact of Sustainable Business Performance on
4.0, assist the firms to implement all the required competitive capabilities
policies associated with an ethical working
environment, civil rights, and inclusion in the In the lens of sustainable business models, the word
workplace, as well as creating potential for sustainability can be interpreted as a proactive
employment. response by organizations to social, economical, and
The following hypotheses have been developed as a environmental measures variables to safeguard
result: operations over a prolonged period. In order a gain
a competitive edge, organizations must integrate
H2a. High levels of man-machine-material components of sustainability into their operations,
interaction impact positively sustainable business simultaneously keeping a balance between the
performance. pillars of sustainability [24]. Competitive
capabilities comprise the ability to provide high
H2b. Effectiveness of product life cycle impact value to consumers despite surpassing the
positively on sustainable business performance. competition. It typically addresses competitiveness
H2c. Accurate delivery time as output has a positive characteristics like cost, productivity, delivery,
impact on sustainable business performance. capacity, adaptability, creativity, growth, and
efficiency, among others. In the concern of research,
this paper finds that cost, capacity, and growth are
Economical drivers of Sustainable Business
the most significant measures of competitive
Performance
capabilities, and we considered them for evaluation.

As stated by [2] "Green supply chain management is The following hypotheses have been developed as a
a novel idea that is also helpful in improving result:
operational measures, resulting in better economical H4a. Sustainable business performance positively
and ecological performances." This concept impacts reduced levels of all kinds of waste.
facilitates the manufacture of goods while using
relatively little energy and less raw material. In
H4b. Sustainable business performance has a
broad terms, it is critical for attaining sustainability.
positive impact on improvement in capacity
[15] also argue that Industries like automobile,
utilization.
textile, foot-ware, and service industries, are highly
influenced by technologies such as simulation, H4c. Renewable business performance has a positive
robotics, mobile technology, and Artificial impact on growth in market share.
Intelligence, which further impact highly on their
sustainable performances. Taking mobile The conceptual framework for the current research
technology and robotics into account, they simulate has been developed based on the literature review
highly on economical business performances of the and hypotheses suggested in Fig. 1
industries.
The following hypotheses have been developed as a
result:

5
 Environmental drivers ENV1

ENV2
H1a

H1b
ENV3

H1c

Competitive Capabilities
OPR1 COC1
H4a
Operational drivers

H2a
Sustainable

OPR2 H2b Business H4b COC2

Performance
H2c H4c
OPR3 COC3
H3a

ECO1
H3b
Economical drivers

ECO2 H3c

ECO3

Figure 1 Conceptual Framework based on the literature review and hypotheses suggested.

Data Source and Methods [1] [23] [6] [26] [27] , Operational drivers [9] [2]
[28], Economical drivers [26] [7] [23] [29] [2].
Measures and Instrument development This study’s instrument for measuring each factor
was divided into two distinct sections. In the first
section, the author addresses demographic
There are various variables addressed by several
information such as the name of the company/firm,
authors about Sustainable Business Performance,
number of employees, type of products, sector,
which directly or indirectly influence the Industry
qualification, age, experience, job position, and
4.0 adoption. However, in this literature, most
Industry type, while in the second section,
discussed variable are Environmental drivers [22]
addressing about the drivers of each variable. The
research construct and items are listed in Table 2

Table 1 Drivers of Sustainable Business Performance

S Drivers Grouping Naming Reference

No.
01 Reduced consumption of toxic/ hazardous/ harmful Environmentally ENV1 [22] [23]
materials Sustainable [2] [27] [6]
Performance [30]
02 Reuse/ recycling/ remanufacturing Drivers (ENV) ENV2 [27] [6]
03 Educating customers about stainability ENV3 [9]

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 04 High level of man-machine-material interaction Operational OPR1 [9]
05 Effectiveness of product life cycle analysis Sustainable OPR2 [9]
06 Accurate delivery time as output Performance OPR3 [2] [30]
Drivers (OPR)
07 Reduced waste treatment cost Economically ECO1 [7]
08 Reduced penalty/ compensation for ecological Sustainable ECO2 [6]
accidents Performance
09 Reduced rejection and rework cost Drivers (ECO) ECO3 [7]
10 Reduced levels of all kinds of waste Competitive COC1 [23] [6] [7]
11 Improvement in capacity utilization Capabilities COC2 [2] [28]
12 Growth in market share Drivers (COC) COC3 [7] [29]

Previous work research instruments have been into three drivers namely Reduced levels of all kinds
adopted. All measurements are carried out using a of waste (COC1), Improvement in capacity
five-pointer Likert scale ranging from 1 “Strongly utilization (COC2), and Growth in market share
disagree” to 5 “Strongly agree”. The (COC3).
operationalization of this research is adopted from Target Population and Sampling
previous research as described above. The target population includes all the individuals
Environmentally Sustainable Performance drivers working in the Manufacturing sector and
(ENV) are grouped into three drivers namely academicians related to the specific field in India.
Reduced consumption of toxic/hazardous/harmful For most social science studies with unknown
materials (ENV1), Reuse/recycling/ population estimates, a sample size of 30 to 500
remanufacturing (ENV2), and Educating Customers respondents is appropriate [30].
about Sustainability (ENV3). Operational Firstly, the questionnaire is distributed among the
Sustainable Performance drivers (OPR) are grouped focus group including 12 members (7 Industry
into three drivers namely High level of man- persons and 5 Academicians). They finalise the 12
machine-material interaction (OPR1), Effectiveness variables, also grouped the 12 variables in 04 group.
of product life cycle analysis (OPR2), and Accurate After a brief introduction to the research, the
delivery time as output (OPR3). Economical questionnaire was distributed among the target
Sustainable Performance drivers (ECO) are grouped audience by a link through e-mail, personal
into three drivers namely Reduced waste treatment interaction, virtual meetings, text messages, and
cost (ECO1), Reduced penalty/compensation social media, and after a year, a total of 312 samples
subject to ecological accidents (ECO2), and were collected through random stratified sampling
Reduced rejection and rework cost (ECO3). method whose demographic profile is shown in
Competitive Capabilities (COC) drivers are grouped Table 2.
Table 2 Respondent’s Demographic Profile
Demographic Frequency Percentage (%)
Sector 229/312
Manufacturing Sector 94 30.13
Automobile Sector 170 54.58
Pharmaceuticals Sector 11 3.49
Others 37 11.79
Industry Type
Micro scale 6 1.74
Small scale 72 23.14
Medium scale 163 52.40
Large scale 71 22.70
Job Designation
Upper Management Level 60 19.21
Middle Management Level 206 65.93
Lower Management Level 46 14.84
Number of Employee
less than 100 59 18.77
between 100 to 200 18 5.67
between 200 to 500 75 24.07
between 500 to 1000 57 18.34
greater than 1000 103 33.18

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 Experience
1 – 10 Years 97 31
10 – 20 Years 122 39.30
20 – 30 Years 29 9.17
30 – 40 Years 64 20.52
Respondent Age
below 30 Years 65 20.96
between 31 to 45 Years 187 59.82
between 46-58 Years 48 15.28
above 58 Years 12 3.93
Educational Background
Diploma 27 8.73
Graduate 189 60.69
Post-graduate 77 24.45
Ph.D. 19 6.11

Data Analysis Convergent validity evaluation needs to be

performed for ensuring each variable's measurement
Structural equation modelling (SEM) is used to validity and reliability are fulfilled. To validate the
estimate the constraints in a research hierarchical reliability of the data set, the partial least square
(PLS) criterion is used. The reliability measurement
model, which is a multivariate statistical analysis
is achieved by four criterion (i) Cronbach’s alpha (ii)
approach to investigate structural correlations and
Composite reliability (rho_a) (iii) Composite
partial least square (PLS) approach SEM is used. reliability (rho_c) and (iv) Average variance
PLS-SEM was originally created for prediction extracted (AVE). the results of above stated
purposes, which is why it is selected over assessment if given in TABLE 4, which shows that
covariance-based SEM software (e.g., AMOS). the Cronbach’s alpha value for collected samples
Because PLS-SEM is less sensitive to sample size, ranged between 0.71 and 0.725, the values of
multivariate normal sample data is not strictly Composite reliability (rho_a) for collected samples
required [31]. For the employment of PLS-SEM, the ranged between 0.726 and 0.836, the values of
author uses SmartPLS-4.0 software. To predict the Composite reliability (rho_c) for collected samples
research objective, a hypothesis was created. ranged between 0.79 and 0.843, which shows
satisfactory points of internal uniformity and
reliability [32] In addition the values of Average
SmartPLS-4.0 can easily handle complex structural
variance extracted (AVE) for collected samples
models, also it is suitable for both normally
ranged between 0.56 and 0.641, which surpasses the
distributed data and not normally distributed data
required cut-off value of 0.5 [33], which reveals an
[32].
adequate convergent validity level. The degree to
which a construct is distinct from other constructs as
Research Findings measured by empirical standards is referred to as
Measurement Model Assessment discriminant validity [31].
Table 3 Convergent Validity

Variable Cronbach's Composite reliability Composite Average variance

alpha (rho_a) reliability (rho_c) extracted (AVE)
ENV 0.72 0.836 0.826 0.615
OPR 0.71 0.752 0.79 0.56
ECO 0.725 0.785 0.84 0.637
SBP 0.722 0.726 0.843 0.641

Evaluation of Structural Model validity can be defined as the degree to which a set
of items may differentiate one variable from another.
Evaluating a structural model enables one to The main objective is to perform discriminative
determine the model's ability to predict several validity tests to drive a strong relationship between
targeted elements. Furthermore, discriminate the refractive construct with its own variables. [35]

8
states that the degree of similarity between various 0, it suggested a weak relationship between the
variables should not be too high to demonstrate variables which is not significant and should not
discrimination. In the cross-loading analysis, we consider. The path coefficient of the data set is nearly
discovered that all indicators loaded the most in their closer to +1, suggesting a strong positive
respective factors as given in Table 5. As described relationship between the variables, and is
in Table 5, no insignificant cross-loading case is significantly acceptable [31].
found. The factor loading of the data set is
significant and highly acceptable as it exceeds the As articulated by [31], the validity of discriminate
threshold value of 0.70, except for one construct, but can be accepted if the diagonal line setting has a
it is acceptable as it exceeds the acceptance higher value. Also accepted as it acquires adequate
threshold value of 0.60. The collinearity statistics convergent validity level provided by criterion to
result in the potential correlation between the assess discriminate validity. Each measurement has
variables, so there is no collinearity problem. Our a large AVE (italic diagonal elements) square root
estimated values of VIF (collinearity statistics) are than its correlated latent variable [36]. The Fornell–
less than 5, which suggested that our data set is Larcker criterion matrix is shown in Table 6. Further
to cross-examine the validity correlation ratio of the
significant [31]. The path coefficient is evaluated to
data set, a Heteotriat–Monotrait (HTMT)
link the variables in the structural model. It provides assessment is performed. According to [37] and
an insight into hypothesized relation around the [38], the HTMT criterion is the value of
measures. If the path coefficient is closer to +1, measurement should be less than 0.85, then it is
suggested a strong positive relationship between the concluded to be accepted as values given in Table 7.
variables, whereas if the path coefficient is closer to
-1, suggested a strong negative relationship between
the variables and if the path coefficient is closer to
Table 4 Cross Loading and VIF

ENV OPR ECO SBP VIF

ENV1 0.862 0.866 0.449 0.809 1.217
ENV2 0.748 0.498 0.451 0.418 1.704
ENV3 0.736 0.539 0.377 0.387 1.695
OPR1 0.862 0.869 0.449 0.809 1.202
OPR2 0.494 0.723 0.511 0.475 1.310
OPR3 0.466 0.634 0.275 0.320 1.282
ECO1 0.441 0.443 0.864 0.793 1.384
ECO2 0.402 0.418 0.767 0.511 1.440
ECO3 0.462 0.492 0.759 0.472 1.459
SBP1 0.441 0.443 0.864 0.793 1.380
SBP2 0.480 0.553 0.548 0.800 1.531
SBP3 0.861 0.869 0.449 0.809 1.389
Table 5 Fornell–Larcker criterion matrix

ECO ENV OPR SBP

ECO 0.798
ENV 0.539 0.784
OPR 0.555 0.665 0.748
SBP 0.775 0.756 0.741 0.801

Table 6 HTMT criterion

ECO
ENV 0.746
OPR 0.807 0.741

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 SBP 0.762 0.546 0.499
ECO ENV OPR SBP

Structural Model Assessment % and could be 1.96 if significant level is 5 %. For

the data set for two-tailed test, we have considered
Further to analyse advance structural model significant value 1.65. For this data set, all the
provided by [31] [39] and [37], R2 (coefficient of empirical t-value is greater than significant value as
determinant) , Beta value, t value and F2 (effect size) given in Table 7, also ranges from 11.843 to 3.023,
is calculated. For this assessment, a bootstrapping so it is acceptable.
method with 5000 sub-samples is employed, which
facilitates us to access the data extensively. If Additionally, if empirical p-value is less that the
empirical t-value is greater than the critical value, it critical value than it is suggested to be statistically
is suggested that the path coefficient is statistically significant. In this data set, critical p-value is 0.05
significant with a certain probabilistic error. considered, also all the empirical p-value is less than
Basically, there are two significant values can be critical value as given in Table 7, so it is acceptable.
considered, it would be 1.65 if significant level is 10 So, the hypothesis is supported and accepted.

Table 7 Concept Model Hypothesis Testing

Hypo Original Sample Standard

T statistics Decision
these Effect sample mean deviation p values
(|O/STDEV|)
s (O) (M) (STDEV)

H1a ENV1 → SBP 0.625 0.638 0.096 6.524 0 Supported

H1b ENV2 → SBP 0.323 0.316 0.04 8.102 0 Supported
H1c ENV3 → SBP 0.299 0.29 0.053 5.647 0 Supported
H2a OPR1 → SBP 0.648 0.676 0.14 4.615 0 Supported
H2b OPR2 → SBP 0.381 0.349 0.089 4.293 0 Supported
H2c OPR3 → SBP 0.256 0.234 0.085 3.023 0.003 Supported
H3a ECO1 → SBP 0.553 0.567 0.079 6.973 0 Supported
H3b ECO2 → SBP 0.356 0.35 0.044 8.179 0 Supported
H3c ECO3 → SBP 0.329 0.321 0.047 7.013 0 Supported
H4a SBP → COC1 0.431 0.431 0.054 7.946 0 Supported
H4b SBP → COC2 0.363 0.359 0.032 11.483 0 Supported
H4c SBP → COC3 0.455 0.466 0.072 6.334 0 Supported
Coefficient of determinant (R2) predicts the variance evaluating the value of F2 as if the estimated value is
from endogenous variables to exogenous variable. greater than 0.02, it represents a small effect of
As suggested by [34] [37], if value of R2 ranges from exogenous latent variable, if the estimated value is
0 to 1, suggested a higher level of predicting greater than 0.15, it represents a medium effect of
accuracy. [31] articulated that if value of R2 is 0.75, exogenous latent variable, if the estimated value is
it is considered to be substantial relationship, if greater than 0.35, it represents a large effect of
value of R2 is 0.50, it is considered to be moderate exogenous latent variable. While it is estimated that
relationship, if value of R2 is 0.25, it is considered to if the value of F2 is less than 0.02, suggested there is
be weak relationship. For this data set as given in no effect. For this data set as given in Table 9, effect
Table 8, value of R2 is 0.793, and value of R2 of Economical sustainable drivers and
adjusted is 0.787, which is significantly acceptable Environmentally sustainable drivers is large on
and predicting a substantial relationship. sustainable business performance, while Effect on
operational sustainable drivers is medium on
To predicts the effect of endogenous variables to sustainable business performance. So, it is
exogenous variable, effect size (F2) is evaluated. concluded that the hypothesis is acceptable.
[39] articulated the predictive criterion for

10
 Table 8 Coefficient of Determinant (R2)

R2 R2 adjusted Result
SBP 0.793 0.787 Substantial
Table 9 Effect Size (F2)

ECO ENV OPR SBP Effect

ECO 0.735 Large
ENV 0.044 Small
OPR 0.15 Medium
SBP

Result Findings So, overall hypothesis H1 is statistically significant

and accepted with small effect, as Table 9 shows that
Fig. 2 shows the PLS structural model linking (F2 = 0.044), effect of economical sustainable drivers
environmental sustainable drivers, operational is small on sustainable business performance.
sustainable drivers, economical sustainable drivers,
and competitive capabilities as sustainable business Hypothesis H2a predicted that “High levels of man-
performance measures. machine-material interaction” impact positively
sustainable business performance. Table 4 and Table
Hypothesis H1a predicted that “Reduced 7 shows that “High levels of man-machine-material
consumption of toxic/hazardous/harmful material” interaction” (β = 0.869, p < 0.005, t = 4.615) is
impact positively sustainable business performance. significant thus, H2a is supported. Hypothesis H2b
Table 4 and Table 7 shows that “Reduced predicted that “Effectiveness of product life cycle”
consumption of toxic/hazardous/harmful material” impact positively on sustainable business
(β = 0.862, p < 0.005, t = 6.524) is significant thus, performance. Table 4 and Table 7 shows that
H1a is supported. Hypotheses H1b predicted that “Effectiveness of product life cycle” (β = 0.723, p <
“Educating customers about sustainability” has a 0.005, t = 4.293) is significant thus, H2b is
positive impact on sustainable business supported. Hypothesis H2c predicted that “Accurate
performance. Table 4 and Table 7 shows that delivery time as output” has a positive impact on
“Educating customers about sustainability” (β = sustainable business performance. Table 4 and Table
0.748, p < 0.005, t = 8.102) is significant thus, H1b is 7 show that “Accurate delivery time as output” (β =
supported. Hypotheses H1c predicted that 0.634, p < 0.005, t = 3.023) is significant thus, H2c
“Reduce/recycling/remanufacturing” has a positive is supported. So, overall hypothesis H2 is statistically
impact on sustainable business performance. Table 4 significant and accepted with medium, as Table 9
and Table 7 shows that shows that (F2 = 0.15), the effect of operational
“Reduce/recycling/remanufacturing” (β = 0.736, p < sustainable drivers is medium on sustainable
0.005, t = 5.647) is significant thus, H1c is supported. business performance.

11
 Figure 2 Structural model generated by SmartPLS4

Hypothesis H3a predicted that “Reduced waste 7 show that “Sustainable business performance” (β
treatment costs” impact positively sustainable = 0.809, p < 0.005, t = 6.334) is significant thus, H4c
business performance. Table 4 and Table 7 show that is supported. So, we conclude that sustainable
“Reduced waste treatment costs” (β = 0.864, p < business performance has a positive impact on
0.005, t = 6.973) is significant thus, H3a is supported. competitive capabilities. So, overall hypothesis H4 is
Hypothesis H3b predicted that “Reducing penalty statistically significant and accepted with a large
compensation for ecological accidents” positively effect, as Table 8 shows that (R2 = 0.793), the effect
impacts on sustainable business performance. Table of sustainable business performance on competitive
4 and Table 7 show that “Reducing penalty capabilities is significant.
compensation for ecological accidents” (β = 0.767,
p < 0.005, t = 8.179) is significant thus, H3b is Discussion and Conclusion
supported. Hypothesis H3c predicted that “Reduced
Our main objective in this research is to investigate,
rejection and rework cost” has a positive impact on
how environmental sustainable drivers, operational
sustainable business performance. Table 4 and Table
sustainable drivers, and economical sustainable
7 show that “Reduced rejection and rework cost” (β
drivers are connected with sustainable business
= 0.759, p < 0.005, t = 7.013) is significant thus, H3c
performance (competitive capabilities) measures
is supported. So, overall hypothesis H2 is statistically
using PLS-SEM approach. In addition, this study
significant and accepted with a large effect, as Table
explored the drivers that are way more impactful in
9 shows that (F2 = 0.735), the effect of Economical
the deployment of sustainability through sustainable
sustainable drivers is large on sustainable business
business performance. The author validates a
performance.
positive relationship between drivers and
Hypothesis H4a predicted that “Sustainable business sustainable business performance, also stated in
performance” impact positively on reduced levels of previous literature [21] [6] [7] [27] [29].
all kinds of waste. Table 4 and Table 7 show that Additionally, this study tries to explore the elements
“Sustainable business performance” (β = 0.793, p < to fill the gaps addressed by researchers previously.
0.005, t = 7.946) is significant thus, H4a is supported. [21] articulated that manufacturing industries not
Hypothesis H4b predicted that “Sustainable business achieving higher sustainability as the unattainability
performance” positively impacts on improvement in of strategic sustainable business models. A roadmap
capacity utilization. Table 4 and Table 7 show that is required to improve the sustainability measures.
“Sustainable business performance” (β = 0.800, p < Additionally, [6] also emphasis that operational
0.005, t = 11.483) is significant thus, H4b is sustainability measures need to be considered which
supported. Hypothesis H4c predicted that attaining sustainability.
“Sustainable business performance” has a positive
impact on growth in market share. Table 4 and Table

12
Precisely, we obtained that environmental driver impact on overall sustainability. Additionally, [30]
(ENV) like Reduced consumption of emphasise that accurate delivery time in online food
toxic/hazardous/harmful material (ENV1), Reuse/ supply process can enhance the operational
recycling/ remanufacturing (ENV2), and Reduced sustainability. As stated in previous study results, the
levels of all kinds of waste (ECO3), low impact on findings support both hypotheses (H2 and H4).
sustainable business performance, consequently,
have a low effect on sustainability. So, we conclude The third hypothesis confirmed that economical
that environmental sustainable drivers have a drivers (ECO) have a high impact on sustainable
positive relationship with Sustainable business business performance. Drivers have a positive
performance with a low level of influence on relationship with Sustainable business performance,
sustainability. The results of this analysis contribute also the influence is high. Economical drives such as
support to the theoretical viewpoints presented in the Reduced waste treatment costs (ECO1), Reduced
literature review as [22] articulated that, to promote penalty compensation for ecological accidents
environmental sustainability, reducing waste and gas (ECO2), and Reduced rejection and rework costs
emission reduction, resource, and energy (ECO3), highly influence sustainable business
consumption reduction plays a vital role, also [30] performance. The results of this analysis contribute
predict that waste reduction can be achieved by support to the theoretical viewpoints presented in the
better resource planning. In accordance with [23], literature review as [6] states that, Reduced penalty/
systematic and controlled production processes in compensation for ecological accidents has a positive
plastic industries result in the reduction of waste impact on economical sustainability. Sustainability
materials, raw materials, and energy consumption. may be achieved by economical drives which further
[6] argues that smart manufacturing process is in offer reduced manufacturing waste resulting in
under consideration in developing nations like India reduced waste treatment cost [7]. Use of excess
to increase the effectiveness of product life cycle for technology reduces waste, and its treatment cost but
a sustainable approach. Also, [2] states that simultaneously also increases energy consumption,
the environmental approach assures the in a brief perspective leads to higher energy
development of recyclable/reusable products that consumption and effect economically.
use less material and are less damaging. [9] also The fourth hypothesis establishes a link between
argue that environmental drivers such as Educating sustainable business and competitive capabilities To
customers about stainability also have a significant achieve sustainability, we must implement a
impact on overall sustainability. sustainable business performance model which
The second hypothesis confirms that operational makes possible reduced levels of all kinds of waste
drivers (OPR) have a substantial impact on (COC1), improvement in capacity utilization
sustainable business performance. High levels of (COC2), and growth in market share (COC3). So,
man-machine-material interaction (OPR1), we conclude that sustainable business performance
Effectiveness of product life cycle (OPR2), and has a positive impact on competitive capabilities.
Accurate delivery time as output (OPR3) have a Our findings in accordance with prior research as [7]
medium effect on sustainability. So, we conclude argue that economic performance and
that operational sustainable drivers have a positive environmental performance have a positive
relationship with Sustainable business performance influence on sustainable business performance.
with a medium influence on sustainability. So, we Also, [29] validates that sustainable business
conclude that operational sustainable drivers have a performance leads to growth in market share.
positive relationship with Sustainable business Limitations and Future Research Directions
performance with a medium influence on
sustainability. Our findings in accordance with prior Many organisations are in process to achieve a
research [2] articulated that, operational sustainable production process, so the perception
performance such as improvement in capacity expressed by respondents may not based on their
utilization and accurate delivery time as output have practical knowledge related to sustainability. The
a positive impact on sustainability. Additionally, data acquired through surveys and expert interviews
[29] validates that operational business performance is used to draw findings in this study article. The
measures like improvement in capacity utilization accuracy of this type of data set can be questionable
has a positive influence on sustainability. Also, [9] to some extent since participants’ ideas and
argue that operational drivers such as Effectiveness knowledge are not stable, and their perception of
of product life cycle analysis and High level of man- those views is probable to vary. Also, we can use
machine-material interaction also have a significant some other measures in the future what usually

13
manufacturing industries adopt to deploy also be used since sustainability elements are
sustainable business performance models. Apart different for different industries. This results in more
from the drivers used in this research, some more reliable and valid results as compared to the present
drivers and measures can be considered in attaining research. This research highlights the drivers of
sustainability in the Indian manufacturing industries. sustainable business models but not considered the
For example, eco-packaging, improvement in barriers that occur in adopting sustainability.
relevant knowledge of organizations, and support Researchers could improve on the current study's
from the government can impact sustainable findings by employing various structural modeling
business performance to attain sustainability [6] [27] approaches such as AMOS or by employing various
[26]. In our research, the respondents are mainly structural techniques like AHP, ANP, etc. Ultimately,
from Automobile, Manufacturing, Pharmaceuticals, this paper is valuable to scholars, practitioners, and
and Electrical/Electronic sectors, specifically policymakers equally.
included, so for future studies specific industries can

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