2.1. Theoretical Framing
Due to the unpredictable environment, the resources and capabilities of a firm cannot be solidly configured [
24,
29]. When constructing competencies, resources, and capacities that require sharing data and knowledge, firms must consider external and internal issues [
30]. A firm’s resources and competencies include IT expertise, practices, and ICTs, essential tangible resources that boost its bottom line [
31,
32]. Brush and Artz, (1999) [
30] mention that the resource-based view (RBV) perspective helps firms understand the resources and competencies. On the other side, in the field of organizational theory, “dynamic capability” refers to an organization’s propensity for strategic resource reallocation [
33]. DC is the capacity to combine, develop, and reorganize internal and external competencies in response to dynamic conditions [
34]. Seles et al. (2022) [
29] explained that by using the dynamic capability framework, researchers evaluate how private sector firms generate and retain wealth in the face of fast technological change. RBV and DC theories claim firms can achieve a competitive edge by allocating tangible and immaterial resources [
29,
35]. DC theory was presented to fill the weakness of RBV theory [
35]. The RBV asserts that collaborating with partners on resources, capabilities, and strategic assets may lead to supply chain learning and competitive advantages over competing enterprises, resulting in a sustainable market advantage owing to the advantage’s imitability [
24]. Information-based technologies and technology platforms are tangible resources that aid in data management and information sharing across supply chain participants. A firm’s resources and capabilities, sustainable practices, product modularity, and supply chain visibility may be leveraged to make better operational and sustainable performance decisions.
RBV and DC also discuss how external and internal pressures affect product development [
34]. According to Zhu et al. (2008), [
36] the industry has three habitats: modularity, philanthropy, and uncertainty, which affect the strategic decisions of managers. Uncertainty in supply might not influence strategic decisions due to a firm’s tendency, but high-low modularity/design in a product might affect strategic decisions. By exchanging information in the form of experience, expertise, funds, and resources, visibility converts into an intangible resource or capability for enhancing the sustainability performance of SMEs [
21]. This study used the resource-based view (RBV) theory and the dynamic capabilities (DC) theory to explain the nature of technological pressure, supply chain pressure, supply chain visibility, and product modularity in order to better understand the theoretical advantages of supply chain visibility to sustainable performance. By classifying the firm’s resources, RBV and DC logic provides useful perceptions for dealing with internal and external contingencies and capabilities. The SCV concept was defined in this study as tangible and intangible resources, with the PM concept as a capable component. As in a distributed manufacturing framework, product modularity enables a company to accelerate component combinations. Improvements in delivery performance can be ascribed to a modular product architecture, such as concurrent module manufacturing and component swapping. The organizational process is not closed; it is open to the outside world, containing numerous resources that impact its activities.
2.2. Hypothetical Framing
Supply chain pressure refers to external stakeholders’ pressure to exert business partners, supply chain members, government, and customers for any common goal [
37]. Sustainable initiatives can also foster cooperation between enterprises, suppliers, and customers, decreasing environmental impacts [
38]. Organizations feel pressure from end customers and shoppers because of strong interpersonal relationships in the design process [
23]. Stakeholder pressure can be normative, coercive, or mimetic, influencing business choices and actions. Managers make decisions to use business practices out of a desire to appease their stakeholders rather than any intrinsic motivation. External stakeholders have been pressured to adopt sustainable practices, how suppliers respond to stakeholders, and government pressure [
39]. According to Singh et al. (2018) [
40], the perception of supply chain pressure is not easy to enhance. It needs clearer benefits, and those benefits need to be identified in a transparent shape. Specifically, there has been conflicting research on whether supply chain pressure affects the effectiveness of green supply chain management [
23]. Large firms usually take responsibility for activities related to smaller suppliers because they are more visible than smaller suppliers [
41]. Smaller suppliers are considered non-organizational stakeholder groups. Non-organizational groups can build high pressure on large firms to identify social and environmental concerns and pressure from stakeholders positively affects SSCM practice adoption [
42]. Based on the above discussion about supply chain pressure, we posed the following hypotheses:
H1. Supply chain pressure positively influences sustainable practices.
Technology is the sum of skills, techniques, processes, methods, and programs to manufacture products or accomplish goals [
6,
43]. It can be knowledge about procedures, techniques, and programs or machine operations that allows them to work [
38]. Low-carbon technical innovation is a new way for manufacturing companies to achieve sustainable development. Technology is a source of conversion of raw material into finished goods [
7]. Park and Li (2021) [
44] mentioned that digitalization could revolutionize supply chain management. Technology is an invention to control the work of humans by making it very easy and fast [
45]. Technology allows firms to remove communication barriers and interact freely [
5]. Firms resolve social issues by employing green technologies and producing products by adopting green technology [
8,
10,
46]. Four main features of advanced technology influence the supply chain network (traceability/visibility, reliability/security, cost efficiency, and the Synchronized Transaction Process) [
16,
44] Our technological pressure concept is grounded in the idea of competitive pressure in the supply chain network for technologically advanced products (sustainable products). The basic assumption is that a sample firm faces technical risk due to the technological progress of its competitors, as measured by the level of its R&D spending. Large companies have superior technology, while small businesses do not, which puts pressure on SMEs. Technological pressure might influence SMEs to adopt sustainable practices, which helps to improve the firm’s overall performance. Thus, the following hypotheses are proposed for technological pressure.
H2. Technological pressure positively influenced sustainable practices.
This study focuses on advanced sustainable practices that can improve the sustainability effectiveness of a firm. Sustainability is a source of value creation that gives firms a competitive advantage and superior performance [
47]. The sustainable practices concept is measured from several perspectives and considered multi-dimensional. Multi-dimensional practices can have a positive social impact and result in a new way of doing business for the firm [
37]. Several sub-dimensions practices have been highlighted in the literature, which is helpful for sustainability issues [
41,
48]. Sub-dimensions of sustainable practices are sustainable procurement, manufacturing, sustainable distribution, and reverse logistics, which are important and integral to enhancing the manufacturing sector’s sustainability problems [
49,
50]. Those practices are operational strategies for internal environmental management, green information systems, facilitating the consumer’s desires, and eco-design, which are necessary to enhance the firm’s sustainability performance [
4]. This study examines the concept of sustainable practice for investigating firms’ operational and sustainable performance under the moderating effect of product modularity and supply chain visibility concepts. Based on the above, the following hypotheses are proposed:
H3. Sustainable practices have a positive impact on operational performance.
H4. Sustainable practices have a positive impact on sustainable performance.
Visibility is information transparency, clarity, quality, and follow-up that help solve problems [
15,
16]. SCV concept refers to providing information across supply chain partners on the specific location of products or goods and product details, such as material quality and flexibility [
11,
17]. Through visibility, one can track the whereabouts of materials and finished goods from the point of origin all the way to the purchaser [
18]. Information sharing is studied in the literature as a component of visibility, and its direct and mediated effects through the SCV notion are examined [
16,
17]. Moreover, SCV helps a company manage supply chain faults and adjustments in a competitive setting [
14]. In the current situation, the management of a supply chain network or network of different suppliers is complex to accomplish with high competition, growing market complexities, and at a globalization level, but the existence of visibility within the whole supply chain network can make it easy for the firm [
20] (Busse et al. 2017).
A big challenge is attaining clear visibility within the supply chain [
18]. This is a challenge because the concept of SCV is related to collecting information about what is happening within the supply chain, which is not readily achievable [
11]. Supply chain information should be trackable in practice and in real-time to attain good supply chain visibility [
21,
51]. Visibility/transparency purifies the supply chain network to promote sustainable practices. First, this study begins by exploring whether SCV can mediate between sustainable practices and operational performance. Next, we look at how SCV influences the connection between sustainable practices and sustainable performance. For moderating the role of SCV, two hypotheses are proposed.
H5a. Supply chain visibility positively moderates supply chain pressures’ effect on sustainable practices.
H5b. Supply chain visibility positively moderates technological pressures’ effect on sustainable practices.
H5c. Supply chain visibility positively moderates sustainable practices’ effect on operational performance.
H5d. Supply chain visibility positively moderates sustainable practices’ effect on sustainability performance.
Product modularity concepts have been explained regarding product development [
28,
52]. Modularity in product development represents the decomposition of a product with its components and subassemblies [
22]. PM can provide different configurations, customization, and a longer product life cycle [
53]. High modularity can affect product lead time, frequency, on-time introduction, and originality. Components and subassemblies help develop new varieties or models of a product through creativity, innovation, and updating parts [
27,
54]. Sun and Zhong (2020) [
25] explained that PM is a design strategy used to create a comprehensive product line for a single product with numerous variants. According to the literature, modularity enhances product modification, diversity, and development, which should boost a company’s bottom line [
55]. The literature has examined PM’s direct effect on supply chain and business performance [
56]. Modularity is a moral constant that uses modules to construct multiple product architectures or designs. High modularity might affect sustainable practices, manufacturing, and administration and implementation process. Thus, we proposed a hypothesis for moderating the role of product modularity:
H6a. Product modularity positively moderates supply chain pressures’ effect on sustainable practices.
H6b. Product modularity positively moderates technological pressures’ effect on sustainable practices.
H6c. Product modularity positively moderates sustainable practices’ effect on operational performance.
H6d. Product modularity positively moderates sustainable practices’ effect on sustainability performance.