Relationship between lean manufacturing practices and sustainability in manufacturing organisations: Mediating effect of manufacturing performance and moderating effect of ethical climates

Lean manufacturing practices (LMP) is considered as a manufacturing philosophy that can lead to global manufacturing performance by adopting and carefully implemented in the organisations. In fact, it gives the manufacturers a competitive advantage by enhancing the economic, environmental and social. In line with that, this study was aimed to examine the relationship between LMP and sustainability among Malaysia’s manufacturing organisations. Specifically, it aimed at investigating both the mediating role of manufacturing performance (MP) on the relationship between LMP on sustainability, and the moderating role of ethical climate (EC) on the relationship between LMP on manufacturing performance. The motivation for this study was motivated by the sustainability issue of previous research that needs to be more investigated for the good of the organisations. In addition, further exploration is also needed on the impact of lean manufacturing on long-term sustainability. In this case, sustainability in production is seen as the leading feasible solution that needs to be explored. Furthermore, studies in examining the influence of EC on MP where the effect of possible mediating and moderating variables that had been proposed to explain the inconclusiveness, were limited. Consequently, this study integrated theories Resource Based View (RBV) and the Stakeholder Theory to map and position the possible relationships between the variables in the conceptual framework. Since the quantitative method was applied, the questionnaires were developed through extensive literature review. The population size for this study was 2368 based on Malaysia Federation of Manufacturing in Malaysia (FMM). In this study, the unit of analysis was the companies embodied from middle up to the top management. The survey questionnaires were randomly distributed to 335 manufacturing organisations in Malaysia as the sample with a 30.4 percent response rate. The data collected were analysed by performing the PLS-SEM technique. The results indicated that i) the positive relationship between LMP and SUS, ii) the positive relationship between LMP and MP, iii) the positive relationship between MP and SUS, iv) the positive relationship between EC and MP, v) mediating role of MP between LMP on SUS were established, vi) EC as a moderator did not support the relationship between LMP on MP. Generally, LMP and MP positively improved sustainability, showing that these are the important elements that should be seriously considered by practitioners. Therefore, this study could broaden the boundary of the existing literature, and contributes to the body of knowledge related to lean manufacturing practices, sustainability, manufacturing performance and ethical climate theoretically, practically, and methodologically.