GREEN BUSINESS STRATEGIES IN THE PRECISION ENGINEERING INDUSTRY IN SINGAPORE

Abstract

Increasing awareness of the continuing degradation of the natural environment has pushed businesses to take into account the many external forces being exerted on them to adopt environmental friendly business practices. Large multinational corporations have adopted environmental friendly policies and practices to protect their brand names and reputation and to project an image of responsible corporate citizens. In line with this movement, the need to comply with government regulations as well as non-governmental groups championing the green cause, the companies in the supply chain serving these large corporations are more and more, being required to be compliant with the same environmental regulations. In Singapore, the precision engineering industry serves many multinational companies as one of the key supporting groups of companies. This study serves to assess companies in the precision engineering industry in terms of awareness of the green movement, consistent practice of an Environmental Management System standard attained, and drivers for such an environmental standard. The findings showed that while awareness and strategic intent is high among firms surveyed, this is not translated into taking the first step in acquiring this standard. This study also showed that the expected major external drivers of regulation and customer requirement are not as significant in pushing firms to adopt an environmental standard. A conceptual model is developed from literature review and is proposed to enable firms determine their green strategic position. These positions can be predominantly reactive, responsive or strategic. From a questionnaire survey, empirical data showed that most precision engineering firms fall into the reactive or responsive positions. This is not surprising, as most of the firms surveyed are small and medium size enterprises more concerned with short term survival and profitability. These firms are likely to implement and maintain an Environmental Management System as a reaction to a regulatory or customer requirement and not perceive the green movement as an opportunity to build strategic competitive advantages.