Monitoring Reverse Logistics Programs: A Roadmap to Sustainable Development in Emerging Markets

Article excerpt

ABSTRACT:

This manuscript develops a reverse logistics monitoring system for controlling reverse flows of materials through marketing channels in emerging economies. Institutional theory is incorporated to show that both positive and negative impacts on environmental sustainability can be predicted. A partner control framework and scales are then developed for use by managers and researchers in furthering their understanding of the effective management of global reverse logistic networks

INTRODUCTION

Multinational corporations (MNCs) must find ways to protect the environments of emerging markets if they hope to maintain sustainable economic development (Ojah & Han 1997). Dumping refuse and products that will generate or become solid waste in these developing countries may produce unintended consequences by causing damage to the environment, network image, and business-to-business relationships (Lipman 2002). The aftermath of this potential conflict will eventually motivate emerging markets not only to increase the level of environmentally-related laws and regulations but also to stimulate the enforcement of existing legislation (Rugman & Verbeke 1998). Given the long term implications, the goal of MNCs should be to meet the current economic needs of the local environment without triggering potentially catastrophic environmental events (World Resources Institute 1996). Above all, emerging market initiatives should pursue economic, environmental, and social goals (Dover et al. 1997; Khanna, Palepu, & Sinha 2005) which are in line with developing sustainable emerging markets. These initiatives necessarily require structural transformation and effective governance (Gautam, Bansal, & Pandey 2005; Weaver, Rock, & Kusterer 1997), since sustainable development must "[meet] the needs of the present without compromising the ability of future generations to meet their own needs" (World Commission on Economic Development 1987: 45).

Researchers have investigated the effects of various strategies for preserving the environment that are contingent on the behavior of consumers and business partners (e.g., Dwyer, Leeming, Cobern, Potter, & Jackson 1993; Ojah & Man 1997). However, very few of the studies conducted directly examine reverse logistics as a programmatic way of managing environmental behavior. The Council of Supply Chain Management Professionals defines reverse logistics as the "... role of logistics in product returns, source reduction, recycling, materials substitution, reuse of materials, waste disposal, and refurbishing, repair and remanufacturing..." (Stock 1998). Moreover, reverse logistics programs are environmental and industry focused initiatives designed to reclaim unwanted product value and promote green marketing (Stock 1998). The most widely studied areas of environmental preservation through reverse logistics are recycling (Cotter & Henley 1995) and corporate strategies that produce green marketing capabilities (Rugman & Verbeke 1999). Recycling research in the United States has reported fears of a potential landfill space shortage (Loupe 1990), a rising cost of landfill operation due to regulations, an increasing citizen opposition to opening new landfills, and an intensifying interest in promoting recycling and reverse logistics programs (Consumer Reports 1994). In time, the same issues will no doubt extend into emerging markets.

The goal of this manuscript is to develop a reverse logistics monitoring system for controlling inbound as well as reverse-bound flows of residual elements of products after use in emerging markets. In addressing this objective, the manuscript first reviews reverse logistics, related government influences, and currently existing monitoring systems that control the flow of unwanted products and by-products. Institutional Theory is incorporated to detail the potential impact of governments on businesses that do not develop environmentally sensitive supply chain distribution strategies. …