CHAPTER 4 THEORETICAL FRAMEWORK AND HYPOTHESIS

DEVELOPMENT

Contents
4.1 Introduction ............................................................................................................................... 2

4.2 Identification of variable and Building a Theoretical Framework……………….…….….2

4.3 Hypothesis Formulation ............................................................................................................ 3

4.4 Institutional Pressure ................................................................................................................. 6

4.5 Technology Adoption…….……………………………………………………………………………………………………..8

4.6 Top Maangement Committment ............................................................................................... 9

4.7 Sustainability……………………………………………………..…………………………………………………………………..10

4.8 Chapter Summary .................................................................................................................... 11

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4.1 Introduction

The purpose of theoretical Framework is to support and describe a theory to explain the
existence of a research problem under study (Swanson, 2013). A theory is defined as a
tentative and not an ultimate truth. Based on the research question and the research objectives
a theoretical framework has been built up to develop a research model.

4.2 Identification of variables and building a theoretical framework

An extensive literature review was carried out to find out the measures for developing a
sustainable sugar industrial ecosystem. The study shows that institutional pressure has a great
role to play in sustainability of agro based industries. Dimaggio and Powell (1983) have
defined three basic drivers of institutional theory namely, Coercive, Mimetic and Normative
Pressure. It is known that Institutional theory provides a concern which opens a door for
researchers towards promotion of sustainable practices (Glover et al., 2014). However,
Institutional theory and Top Management Commitment together can enhance the
sustainability of any organization. The literature shows that there has been a limited study on
Institutional theory and Top management Commitment. Institutional theory combined with
top management commitment can play a significant role in sustainability. The factors
responsible for sustainable practices in sugar industrial ecosystem are Top Management
commitment, Technology Adoption and Institutional Pressures. According to Colwell and
Joshi (2011), Institutional Theory proposed in recent literature has ignored the role of Top
Management. Results show that Institutional Pressure is enhanced when Top Management
commitment is very high. Fig. 4.1 depicts the theoretical framework of the present study. The
definition of the Constructs, Indicators and their reference has been shown in Table 4.1.

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 Figure 4.1: Theoretical Framework

4.3 Hypothesis Formulation:

Major Hypothesis
1. Ho : There is no significant effect of Institutional Pressure on Top Management
Commitment
2. Ho : There is no significant effect of Top Management Commitment on sustainable
practices of sugar industrial ecosystem
3. Ho : There is no significant effect of Top Management Commitment on Technology
Adoption
4. Ho : There is no significant effect of technology adoption on sustainable practices of
sugar industrial ecosystem
Sub Hypothesis
i. Ho : There is no significant effect of Coercive Pressure on Top Management
Commitment
ii. Ho : There is no significant effect of Mimetic Pressure on Top Management
Commitment
iii. Ho : There is no significant effect of Normative Pressure on Top Management
Commitment

Table 4.1: Constructs and Definitions

Constructs and Definition Indicators Reference

Definition
Coercive Coercive Pressure is defined as the -Competition Delmas andToffel,
Pressure external formal and informal pressures within industry (2004); Liang et al.,
from the external organizations or -Government (2007; Dimaggio and
competitors of the firm or from the policy Powell, (1983); Zhu
cultural expectations of the society in -Industrial policy and Sarkis, (2006);
which it operates Miemczyk (2008);

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 Wilting and Rao,
(2010); Mongelli et al,
(2010)

Mimetic It is often associated with the state and -response to Lawrence et al.,
Pressure refers to the threat by powerful actors uncertainty (2001);
of the organization. It involves the -degree of Heras-Saizarbitoria, et
perception of some value of mimicking compatibility of the al., (2011)
a behavior. Mimetic pressure copies waste material to be
the extensive form with the used as raw
uncertainty. It refers to the variation in material of the
action to model themselves as their other
ideal organization

Normative The concept of normative pressure is -Working Nysveen et al., (2005);

Pressure used to describe the concept beyond condition Conner et al., (2003);
the adoption of technology. -Methods of work Lawrence et
It is the strongest predictor of -Availability of al.,(2001); Chertow et
intentions. raw materials al., (2004)
It occurs from our cultural -Distance between
expectations that have to be honored. waste producer and
Promotion of Industrial symbiosis can consumer
be obtained by growing the awareness
environmental awareness in the
industry, need to identify the
symbiosis and emphasizing on
economic development

Technology Technology includes identification, Behavioral Beliefs Shrivastava, (1995)

Adoption preparation, training, implementation Perceived Ramasamy, (2004)
and evaluation. Usefulness Chertow et al., (2004).
New technology helps in the Image Shrivastava, (1995)
prevention of ecological degradation Compatibility Graedel, (1994)
and leads to economic growth. Ease of Use Karahanna et al.,
Industrial ecology is the use of Visibility (1999)
resources with an efficient Result
implementation of technologies Demonstrability
Innovations and technologies adoption Trialability
accounts for sustaining industrial and
economic growth Normative Beliefs
Top Management
Supervisor
Peers Friends
MIS Department
Local Computer
Specialists
Attitude towards
Adoption
Subjective Norms
Top Top Management Commitment efficient use of Liang et al. (2007),
Management comprises of Top Management natural resources UNEP, 2010; Zutshi
Commitment Participation and Top Management and Sohal ; 2004
Beliefs. reduction of the
Top Management Beliefs (TMB) refer emission of
to the extent to which top managers harmful elements

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 consider that Sustainable Consumption
and Production will have an immense creation of more
impact on sustainable development. jobs
Top Management Participation (TMP)
refers to the extent which top promotion of local
managers translate their beliefs into culture & products
desirable actions.
sharing of mission
and vision
statement

sharing potential
benefits

creating awareness
Sustainability Sustainability is defined as to meet the Economic Goals Brundtland
needs of the present without affecting Environmental Commission, (1987);
the future. Sustainability constitutes of Goals Zutshi and Sohal ;
three stages namely product Social Goals (2004); Hart, (1997);
stewardship, pollution prevention and Barnes, (1988);
clean technology. Industrial Ecology WCED, (1987)
will be a guiding principle in
sustainability in 21st century.
Economic Environmental cost Carter and Rogers,
Supply chain cost (2008) ; Azevedo et al.
Cost to quality (2011) ; Ageron
Responsiveness et al., (2012);
cost Tisdell, (1996)
Physical factors
Market related
factors

Environmental Recycling Carter and Rogers,

efficiency (2008); Azevedo et al.,
•Eco packaging (2011);
•Level of process Deif, (2011) ; Bhateja,
management which et al., (2012) ; Seman
includes pollution et al., (2012)
control, ; Whitelock , (2012)
waste emissions,
carbon footprints,
etc.

Social Goals Management Carter and Rogers,

commitment (2008) ; Pochampally
•Customer et al., (2009)
satisfaction ; Gunasekaran and
•Employee Spalanzani, (2012) ;
development Dües et al., (2013);
Safety Gavronski et al.
Health and Welfare ,(2013);Mani et al.,
Ethics (2016)
Human Rights
Philanthropy

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4.4 Institutional Pressure:
Institutional theory was studied by Dimaggio and Powell in 1983 for the efficiency of an
organization. It is one of the most popular theories, which have addressed issues like
environment, quality programs and technology applications (Heras-Saizarbitoria et al., 2011).
The institutional pressure constitutes of Coercive Pressure, Mimetic Pressure and Normative
Pressure. Institutional Theory has been used in operations and supply chain management to
resolve several issues. The literature suggests that more empirical research is required for the
application of institutional pressure towards sustainability (Ciulli, 2016; Dubey et al., 2016;
Glover et al., 2014; Grob and Benn, 2014). Therefore, the effect of institutional pressure on
economic, social and environment effects has to be studied.

4.4.1 Coercive Pressure:

In the present era of climate change, policy makers have a major role to play in controlling
greenhouse gases. Researchers report that the increase in the emissions of greenhouse gases
largely depends on the use of fossil fuels (Mongelli et al., 2010). However, right policies may
help in controlling the emissions of these gases. Environment policy leads to improve the
quality of the environment, reduce the emission of greenhouse gases and planning to protect
nature. At country level policy options mainly focus on efficient improvements by the use of
stimulating technologies. Sustainable production and consumption can lead to tackle the
environmental problems in an efficient manner. Rich developing countries must share the
trade agreements, transfer of technologies and assist investments and development in poor
countries in order to reduce pollution in poor countries. Input-output analysis builds a
relationship between production and consumption considering environment pressures and
international trade in different ways (Wilting and Rao, 2010). Organization works on the
formal and informal pressures created by other organizations and society. Zhu and Sarkis
(2006) have noted that companies are under pressure from stakeholders, such as customers
and the government, to embrace sustainable practices. However, Miemczyk (2008) has argued
that coercive pressures can always lead to adoption of practices, but not always lead to
efficiencies.

Linkage between Coercive Pressure and Top Management Commitment

Coercive pressures (CP) have significant effect on Top Management Commitment. There is
literature supporting the direct relationship between Coercive pressure and Top Management

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Participation (Liang et al., 2007). Coercive pressure was operationalised in terms of the extent
of external pressures including government policies, customer pressures and competitors
(Liang et al., 2007). A six-item scale has been used based on the prior studies. The items of
coercive pressure mainly focus on ‘local regulatory authority pressure’, ‘industry
competition’, ‘industry associations’, ‘industrial policy’ and ‘government policy’

4.4.2 Mimetic Pressure

It is often associated with the state and refers to the threat by powerful actors of the
organization. It involves the perception of some value of mimicking a behavior. Mimetic
pressure copies the extensive form with the uncertainty (Heras-Saizarbitoria et al., 2011;
Lawrence et al., 2001). ‘Mimetic pressure’ refers to the extent to which one organization
tends to mimic their competitors’ or partners’ best practices related to Sustainable
Consumption and Production. It is regarded as an important element in sustainability as the
industries compete with each other and try to copy the best sustainable practices to be in the
race. This leads to create a lot of followers who mimic the best practices to achieve the social,
economic and environmental goals. Six item reflective construct has been developed through
literature and discussed in the chapter 6.

Linkage between Mimetic Pressure and Top Management Commitment

Mimetic pressure has a positive influence on top management participation (Liang et al.,
2007). Mimetic pressure also positively influences the perceptions of top managers, which
helps in making better decisions. On the basis of literature (Zhu and Geng, 2013) top
management has shown a tendency to mimic the actions of their peers or competitors who
were very successful. There has been paucity of research on the exploration of the relationship
between Mimetic Pressure and Top Management Commitment. Therefore, the role of
Mimetic Pressure in Top Management Commitment needs to be explored in sustainability
studies.

4.4.3 Normative Pressure

The concept of normative pressure is used to describe the concept beyond the adoption of
technology. It is the strongest predictor of intentions. It occurs from our cultural expectations
that have to be honored. Promotion of Industrial Symbiosis can be obtained by growing the
environmental awareness in the industry, need to identify the symbiosis and emphasizing on
economic development. It has been found to be the strongest predictor of intentions.

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It occurs from our cultural expectations that have to be honored. Normative Pressure evolves
from the working conditions, obtained by the growing environmental awareness in the
industry, identification and emphasizing on economic development (Chertow et al., 2004;
Lawrence, et al., 2001). Six item reflective construct has been developed through literature
and discussed in the chapter 6.

Linkage between Normative Pressure and Top Management Commitment

Normative pressures usually permeate through the channels of professional affiliations (Liang
et al., 2007), and hence the Normative Pressure has a strong impact on Sustainability (Tseng
et al., 2013). However, the literature surrounding Sustainable Consumption and Production
has not stressed much on the relationship between Normative Pressure and Top Management
Commitment.

4.5 Technology Adoption

With time technologies have led to the improvement of several problems occurring in the
sustainability of agro based products. The changing technologies since past has been
consistently helping the agro based industry to move towards sustainability (Lall, 2000). The
main technologies being used in agro based industries are Thermal processing, Aseptic
processing, Minimal processing technology, Enzymic Processing Ionizing radiation, Ultra
high pressure, Pulsed light, Biological preservation, Dehydration, Freeze drying, Micro wave
drying, Concentration, Hurdle technology, Micro wave heating, Vacuum cooling, Chilling,
Freezing, Chromatography, Microencapsulation, Emulsification, Extrusion, Gelation, Frying,
Nano technology, Biotechnology, Active packaging, Smart packaging, Modified air force
packaging, Cold storage, Robotics, Gene bank, Grain gene, Ark db, Hap map project,
Microbial advance database, Genome mapping, Oliv track, Data bank, Intelligent packaging,
Machines, Equipments, Management information system and Geographic information system.
The use of technology in industries is limited which is the major cause of unsustainability
(Sneha et al., 2016). Eight item reflective construct has been developed through literature.

4.5.1 Linkage between Technology Adoption and Sustainability

The efficient application of technology and other technologies can be made only if the
technology is adopted for sustainability or in other words it is maintaining a balance between
the economic, social and environmental perspective. Technology largely influences the

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productivity and market growth (Labrecque et al., 2007). Beckman and Sinha (2005) argued
that high technology firms recognize that consumer not only go for high value of the products
but also for the high service providers. Thus, the development of new technologies leads to
adoption processes enhancing the economic growth. Due to the introduction of new
technologies, it is very essential to build a timely and implementation strategy for the high
technology industry in order to make their practices sustainable (Yasuda, 2005). High
technology firms when invest in dynamic capability for production, marketing and research
development with high level of competition leads to have better performance. The technology
adoption in agro based industry may lead to sustainability (Kumari and Patil, 2017).
Technologies are the crucial element which leads to the transformation of industrial
ecosystem from an unsustainable industrial system. There is a need to adapt technologies for
the exchanges of the byproducts.

4.6 Top Management Commitment

Top Management Commitment comprises of Top Management Beliefs and Top Management
Participation. Top management Beliefs (TMB) refers to the extent to which top managers
consider that Sustainable Consumption and Production will have an immense impact on
sustainable development. A four-item reflective construct has been used. The items are the
efficient use of natural resources, reduction of the emission of harmful elements, creation of
more jobs, and promotion of local culture & products (UNEP, 2011). Top Management
Participation (TMP) refers to extent which top managers translate their beliefs in Sustainable
Consumption and Production into desirable actions. Three-item Reflective items have been
used for measuring Top Management Participation (Liang et al., 2007). They are - sharing of
mission and vision statement, sharing potential benefits and creating awareness.

4.6.1 Linkage between Top Management Commitment and Sustainability

Top Management Commitment can have a positive impact in an organization by providing
leadership, motivation to the employees, proper training, adequate communication and timely
resources for implementation of any change (Zutshi and Sohal 2004). This commitment can
be obtained through proper awareness, understanding and subsistence knowledge about the
organization. Bansal (2005) found that the two forces of institutional pressure mimetic and
coercive were the key drivers in fostering sustainable development. According to Greenwood
and Hinnings (1996) Top Management Commitment entails three capabilities namely
understanding the new destination, having the skills and competencies and the ability to

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manage how to get to the destination. According to Colwell and Joshi (2013) Top
Management Commitment is defined in terms of commitment to reform and capacity for
change

Organization Structure of Sugar Industry

The Top Management Commitment plays an important role in Sugar Industry. The
organization structure (Fig. 4.2) of sugar industry clearly depicts that the sugar industry is run
by management system. The Top Management Commitment towards different roles and
duties has already been discussed in the overview of sugar industry. The research has been
carried out towards the Top Management Commitment in sugar factories and their role in
sustainability.

Figure 4.2: Organization Structure of Sugar Industry

Source: Sugar Commisionerate (2016)

4.7. Sustainability

Sustainability is a well-known term which constitutes of economic, environmental and social

parameters. The efficient application of technology and other technologies can be made only
if the technology is adopted for sustainability or in other words it is maintaining a balance
between the economic, social and environmental perspective. Sustainable development

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denotes a type of development that meets the economic, social and environmental needs of
contemporary society without sacrificing future generation’s resource needs. Economic
viability of a business for a sustainable business depends upon physical and market related
factors (Tisdell, 1996). Physical factors include Level of productivity, Uncertainty and
instability of production, Protection of long-term productivity, liquidity situation and access
to finance. Marketing Factors include Level of price of outputs and inputs, Price uncertainty
and instability and Trends in prices of commodities (Tisdell, 1996). The economic
sustainability is defined as the cost benefits and optimization of inputs for maximizing the
output or profit. Environment aspect means reduction of greenhouse gases, minimization of
carbon dioxide and reduction of pollution. In order to address environmental problems several
energy management and environment management programs have been introduced after post
liberalization (Patil and Rao, 2015). The consumption of energy and environmental resources
can be reduced through several factors like reuse and recycle (Hart, 1997; Sneha et al., 2016).
Social aspect pertains to employment and social benefits. However, the social dimension has
received very little attention in the literature. The social dimension comprises of philanthropy,
safety, health and welfare, human right and ethics (Mani et al., 2016). The success of the
sustainable program is measured in terms of ‘sustainable management after and efficient use
of natural resources’, ‘significant reduction of harmful elements’, ‘creates more jobs’,
‘improves health standard of the workers’, and ‘improving living standard for the people’.
These were adapted from Veleva and Ellenbecker (2001) and UNEP (2010). Carter and
Rogers (2008) reported that social and environmental performance of industries deals with
many other factors like packaging wastes, health, safety costs and labor costs to name a few.
Six Reflective items have been constructed to define Sustainability.

4.8 Chapter Summary

This chapter addresses the theoretical framework and the hypothesis derived from it. Each
construct of the theoretical framework has been discussed in detail. The chapter elaborates the
definition of the constructs and the items included. The items have been presented in a tabular
manner with respect to the authors. A detailed discussion has been enclosed regarding the
relevance of the construct with the model.

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