5 Conclusions
This study adds to the extant literature by using secondary empirical data rather than primary data (self-perception surveys). We utilized a sample of firm performance data merged with environmental performance data, provides a new view on the relationships between firm leanness, environmental damages, and financial performance. One of the key contributions is the validation of the proposition that lean initiatives may improve both financial and environmental performance. Although these results may seem intuitive, as discussed earlier in the paper, prior research has either found mixed results regarding the relationship between environmental improvements and financial performance or was based on perceptions of a survey respondent. We believe that our tests of these relationships, conducted using empirical environmental damage data and financial data, should give managers confidence that lean can improve both the environmental and financial performance simultaneously. A second key contribution of this study is the new insight that environmental damages can mediate partially the impact of lean on financial performance.
These findings have several important implications from a managerial perspective. First, the results show that while lean efforts in a firm can improve financial performance significantly, efforts that target the reduction of environmentally damaging waste will have a more pronounced impact on financial performance. A manager would be wise to target reducing environmental damage through lean initiatives not only because such efforts are socially responsible but also because these initiatives will improve the bottom line. Conversely, the benefits of waste reduction efforts that do not impact environmental damages may be muted within firms that produce high levels of pollution.
