The Role of Demand Management Strategies in Company Sustainability and Company Performance with the Mediation Role of Supply Chain Sustainability

Hosseini, Ramin; Hashemi Tilehnouei, Mostafa

doi:10.22034/jvcbm.2024.461925.1394

The Role of Demand Management Strategies in Company Sustainability and Company Performance with the Mediation Role of Supply Chain Sustainability

Document Type : Original Article (Quantified)

Authors

Ramin Hosseini ¹

Mostafa Hashemi Tilehnouei ²

¹ Master's Student, Department of Business Administration, Science and Research Branch, Islamic Azad University, Tehran, Iran

² Department of Management, East Tehran Branch, Islamic Azad University, Tehran, Iran

https://doi.org/10.22034/jvcbm.2024.461925.1394

Abstract

Abstract
The present study aims to investigate the role of demand management strategies in company sustainability and company performance with the mediating role of supply chain sustainability. This research is applicable in terms of purpose, and descriptive survey in terms of data collection. The statistical population of this research includes all the managers of the companies that distribute livestock inputs in the country (300 people), the census sampling method is available, which is obtained by using a questionnaire, which includes four dimensions of supply chain sustainability, demand management strategies, company sustainability and the performance of the company. Hypotheses were tested using structural equation modeling method based on partial least squares method, and data analysis of this research was done using Smart PLS version 3 software. The results show that demand management strategies affect the sustainability and performance of the company. It was also found that the stability of the supply chain affects the stability of the company. The mediating role of supply chain sustainability on demand management strategies and company performance was proved.
Introduction
The issue of performance has made researchers and users think for years. In the past, commercial organizations only used financial indicators as a performance evaluation tool. But in the recent years, broader definitions have been proposed in this field; some researchers defined performance as work results, because it has the strongest link with financial goals and revenues, some others consider performance only as the results obtained and another groups consider it a behavior (Rezaian fardoie et al, 2023). It seems that the new definitions are more consistent with the performance of companies, because the emerging eras in the current time not only help companies in terms of performance, cost reduction, increased transparency, sustainability and efficiency (Iqbal et al, 2021), rather, companies should try to create stability and homogenization of the demand for their products and services, considering sustainability as a necessity, today a sustainable service is able to meet customer demands without any destructive impact on the natural and social environment. Therefore, companies should try to provide profitable products and services continuously, this will help the sustainability of the company (Rajani et al, 2022). One of the factors affecting the sustainability of the company is the stable demand for the products. Companies can influence the demand through demand management strategies, which is one of the important aspects of achieving the desired results (Iqbal et al., 2021). In fact, demand management strategies, along with supply chain stability, try to reduce supply chain challenges and disruptions, these disruptions have serious consequences in the financial affairs, market and operational performance of the company (Ebrahimi et al, 2021). Therefore, this research seeks to answer the question: does the demand management strategy affect the sustainability and performance of the company with the mediating role of supply chain sustainability?
Theoretical framework
Company performance
Organizational performance includes the actual outputs and consequences of an organization's activities, measured in comparison with inputs. In other words, organizational performance refers to how the organization's missions, tasks, and activities are performed, along with their results (Muzammil, 2022).
Corporate sustainability:
Corporate sustainability is an approach aimed at creating long-term value for the organization's stakeholders through an environmentally friendly business strategy. In this approach, it is tried to focus on economic, cultural, social, environmental and moral dimensions. Also, long-term goals should not be sacrificed to achieve short-term goals. (Ashrafi et al, 2020)
Demand management strategies:
They are strategies that influence and control the way of managing demand, how to monitor and manage customer demand. These strategies include understanding what your customers want, as well as the plans necessary to meet those demands. These strategies help you plan and manage future demand and make sure you take the right actions to meet it (Mariano-Hernández et al, 2023).
Supply chain sustainability:
Supply chain sustainability is the impact that a company's supply chain can have in promoting human rights, fair labor practices, environmental progress, and anti-corruption policies. There is a growing need to integrate sustainable choices in supply chain management (Anindito, 2021).
Salimi (2024) in a research conducted under the title of investigating the relationship between performance on company sustainability and cost of capital by explaining the mediating role of company risk on companies listed in the Tehran Stock Exchange, reached the following results: the results indicate that there is an inverse significant relationship between the performance and sustainability of the company with the cost of capital. Also, the mediating role of risk in the relationship between the performance and sustainability of the company and the cost of capital was confirmed. Also, this research determined that there is a significant relationship between the performance and sustainability of the company.
Rajani et al, (2022) in a research titled the role of demand management strategies in the sustainability of the service industry and the impact on company performance: using the structural equation modeling approach in the geographical region of India, have reached the following results: green human resource management practices (Human Resource Management) can help organizations align their business strategies with the supply chain and sourcing environment. Also, the results show that hiring and training based on green human resources have significant effects on the sustainability of the supply chain and sourcing. This means that in order to achieve sustainability, human resource managers must prioritize environmentally friendly sourcing. This knowledge should be transferred to the employees hired during the recruitment process.
Research methodology
The current research aims to investigate the role of demand management strategies in company sustainability and company performance with the mediating role of supply chain sustainability. This research is applicable in terms of purpose and descriptive survey in terms of data collection. Hypotheses were tested using structural equation modeling method based on partial least squares method and data analysis of this research was done using Smart PLS version 3 software. The tool used to collect data is a standard questionnaire. The statistical population of this research includes all the managers of livestock input distribution companies (300 people), the census sampling method is available. The findings of this research show a significant relationship between demand management strategies on sustainability and company performance. The questionnaire of this research is taken from the researches of Agyabeng-Mensah (2020) in the field of supply chain sustainability, Rajani et al, (2022) in the field of demand management strategy, Saunila et al, (2022) in the field of company sustainability, Zhang et al, (2019) ) in the field of company performance, and 5 options are used from the Likert scale. This questionnaire includes questionnaires of supply chain sustainability (3 questions), demand management strategies (4 questions), company sustainability (3 questions), company performance (6 questions); each of which has its own subcategories, and the validity of the questionnaire was confirmed by 30 experts. and its reliability was calculated by CVI and CVR method; the CVI value of the above questionnaire is 85%, and the CVR value is equal to 51%. The results of data analysis were done through the structural equation model by SMART PLS version 3.
Research findings
The results show that according to the obtained t, it can be concluded that demand management strategies have an effect on sustainability (7.557) and company performance (16.315). It was also found that the stability of the supply chain affects the stability of the company. The mediating role of supply chain sustainability on demand management and sustainability strategies (with a value of 0.439) and company performance (with a value of 0.352) was proved.
Conclusion:
The results of research hypotheses using the structural equation model showed that supply chain sustainability plays a partial mediating role between the impact of demand management strategies on both sustainability (0.439) and company performance (0.352). Also, demand management strategies affect the sustainability of the supply chain. According to the results, the value of t in the model of the role of demand management strategies in the stability of the company with the mediating role of supply chain stability is equal to 63.993 and in the model of the role of demand management strategies on the performance of the company with the mediating role of supply chain stability is equal to 61.054, which is higher than the value of 1.96, and at the 95% confidence level it can be said that demand management strategies have a significant effect on both sustainability and company performance. The results of many previous researches confirm this issue (Rajani et al, 2022, Govindan et al, 2020, Bag et al, 2021). Govindan et al, (2020) has addressed the topics of demand management and supply chain sustainability, Bag et al, (2021) to supply chain sustainability on performance, and Rajani et al, (2022) the supply chain strategies on the sustainability of the company.
In order to increase the sustainability of the company, it is suggested to the government to put more emphasis on environmental sustainability, social sustainability and economic sustainability, and give incentives in this field to industries and importers.
In order to increase the company's performance, managers should have a special focus on financial ratios such as return on assets, return on equity, and net profit. Also, these managers should be sensitive to marketing and sales indicators such as sales growth and manage it properly.

Keywords

Demand Management Strategies

Supply Chain Sustainability

Company Sustainability

Company Performance

Subjects

Strategic Management

Aghajani-Abdi, M, Panahian, H. (2022). Investigating the impact of supply chain practices and quality management on the performance of Pegah Pasteurized Milk Company in Isfahan. Development and Transformation Management, 47(13), 289-300. (In Persian) https://civilica.com/doc/1459691

Abdelkhalek, F., & Bolla, M. (2020). Predictive sapability of the partial Least squares structural equation modeling (PLS-SEM) with application. (In Persian) https://www.researchgate.net/profile/Fatma-Abdelkhalek-4/publication/345318321

Agyabeng-Mensah, Y., Ahenkorah, E., Afum, E., Dacosta, E., & Tian, Z. (2020). Green warehousing, logistics optimization, social values and ethics and economic performance: the role of supply chain sustainability. The International Journal of Logistics Management, 31(3), 549-574. https://doi.org/10.1108/IJLM-10-2019-0275

Ahmadi, A., Fegh-hi Farahmand, N., & Iranzadeh, S. (2023). Designing the distribution channel selection system in the supply chain of the oil industry using the combination of adaptive neural-fuzzy network and meta-heuristic algorithms. Journal of value creating in Business Management, 3(3), 198-228. Doi: 10.22034/jvcbm.2023.408002.1145. (In Persian)

DOI: 10.22034/jvcbm.2023.408002.1145

Akour, I. A., Al-Maroof, R. S., Alfaisal, R., & Salloum, S. A. (2022). A conceptual framework for determining metaverse adoption in higher institutions of gulf area: An empirical study using hybrid SEM-ANN approach. Computers and education: artificial intelligence, 3, 100052. https://doi.org/10.1016/j.caeai.2022.100052

Al Aina, R., & Atan, T. (2020). The impact of implementing talent management practices on sustainable organizational performance. Sustainability, 12(20), 8372. https://doi.org/10.3390/su12208372

Alzoubi, H., Ahmed, G., Al-Gasaymeh, A., & Kurdi, B. (2020). Empirical study on sustainable supply chain strategies and its impact on competitive priorities: The mediating role of supply chain collaboration. Management Science Letters, 10(3), 703-708. DOI: 10.5267/j.msl.2019.9.008

Ameri, S. M. S, literature. (2019). Investigating the impact of information technology flexibility on the company's performance in the field of supply chain management (case study of Homa Hotels Group). Strategic Management Quarterly in Industrial Systems (Former Industrial Management), 13(45), 65-77. (In Persian)

https://journals.iau.ir/article_545873_6ab41c8b5019b206d309f8bd3383ddee.

Amin, V, Saleh Nejad, H. (2020). The effect of the company's sustainability performance on economic added value during the company's life cycle. Knowledge of Financial Accounting, 7(2), 1-30. (In Persian) DOI: 10.30479/JFAK.2020.11879.2568

Anindito, L. (2021). Improving corporate compliance in global supply chains: A study on the potential of using a functional interaction between frameworks concerned with CSR and the transnational anti-corruption.‏ http://lup.lub.lu.se/student-papers/record/9053894

Ashrafi, M., Walker, T. R., Magnan, G. M., Adams, M., & Acciaro, M. (2020). A review of corporate sustainability drivers in maritime ports: a multi-stakeholder perspective. Maritime Policy & Management, 47(8), 1027-1044. https://doi.org/10.1080/03088839.2020.1736354

Bag, S., Telukdarie, A., Pretorius, J. C., & Gupta, S. (2021). Industry 4.0 and supply chain sustainability: framework and future research directions. Benchmarking: An International Journal, 28(5), 1410-1450. https://doi.org/10.1108/BIJ-03-2018-0056

Bakhshipour Leili, J., & Hosseini Shakib, M. (2020). Investigating the effect of innovation orientation and human capital on organizational competitiveness and performance with the mediating role of supply chain integration in the construction industry. Journal of Engineering & Construction Management, 5(3), 1-11. (In Persian)

https://www.jecm.ir/article_156072_59bdf5e03d3492fa8b0862a4457b5cb9.

Bakhtiari tavana, A., Rabieh, M., & Esmaeili, M. (2020). A Stochastic programming model of sustainable-resilient supplier selection and order allocation under disruption risks – The Case of Iran-Khodro Supply Chain. Research in Production and Operations Management, 11(1), 111-132. (In Persian) DOI: 10.22108/jpom.2020.122794.1267

Beske, F., Haustein, E., & Lorson, P. C. (2020). Materiality analysis in sustainability and integrated reports. Sustainability Accounting, Management and Policy Journal, 11(1), 162-186. https://doi.org/10.1108/SAMPJ-12-2018-0343

Cantele, S., & Zardini, A. (2018). Is sustainability a competitive advantage for small businesses? An empirical analysis of possible mediators in the sustainability–financial performance relationship. Journal of cleaner production, 182, 166-176.

https://doi.org/10.1016/j.jclepro.2018.02.016

Celikbilek, C., & Süer, G. A. (2020). Supply chain design approaches for dual demand management strategies. In Supply Chain and Logistics Management: Concepts, Methodologies, Tools, and Applications (pp. 491-526). IGI Global.‏ DOI: 10.4018/978-1-7998-0945-6.ch024

Chicco, D., Warrens, M. J., & Jurman, G. (2021). The coefficient of determination R-squared is more informative than SMAPE, MAE, MAPE, MSE and RMSE in regression analysis evaluation. Peerj Computer Science, 7, e623. https://doi.org/10.7717/peerj-cs.623

Duraković, B., Hadziabdić, M., & Buyukdagli, O. (2023). Building energy demand management strategies and methods. In Building Energy Flexibility and Demand Management (pp. 63-85). Academic Press. https://doi.org/10.1016/B978-0-323-99588-7.00007-9

Ebrahimi, A., olfat, L., amiri, M., & taghavifard, M. (2021). Designing fixed lifetime perishable products supply chain using normal boundary intersection method. Iranian Journal of Trade Studies, 26(101), 157-192. DOI: 10.22034/ijts.2021.246926.

Esfahani-Zanjani, N, Naghilo, M, & Nabiyoleh, A. (2020). Explanation of meta-analysis of supply chain sustainability and risk management issues. Business Management Studies, 23(12), 217-253. (In Persian) DOI: 10.22034/bar.2020.11611.3008

Feiz, D, Zarei, A, & Farokhizadeh, F. (2021). Investigating and analysis the effect of green supply chain management on the performance of airlines with the mediating role of customer relationship management. Andisheh Amad, 19(75), 117-139. (In Persian)

https://sid.ir/paper/376561/en

Ghanbari, H., ebrahimi sarv oliya, M. H., amiri, M., bolo, G., & ghorbanizadeh, V. (2020). Identifying the factors and indicators for evaluating the performance of the Technical and Vocational Education Organization of the country. Karafan Journal, 17(3), 13-28. (In Persian) doi: 10.48301/kssa.2020.125540

Govindan, K., Rajeev, A., Padhi, S. S., & Pati, R. K. (2020). Supply chain sustainability and performance of firms: A meta-analysis of the literature. Transportation Research Part E: Logistics and Transportation Review, 137, 101923.‏ https://doi.org/10.1016/j.tre.2020.101923

Govindan, K., Mina, H., & Alavi, B. (2020). A decision support system for demand management in healthcare supply chains considering the epidemic outbreaks: A case study of coronavirus disease 2019 (COVID-19). Transportation Research Part E: Logistics and Transportation Review, 138, 101967. https://doi.org/10.1016/j.tre.2020.101967

Hair Jr, J. F., Hult, G. T. M., Ringle, C. M., Sarstedt, M., Danks, N. P., & Ray, S. (2021). Partial least squares structural equation modeling (PLS-SEM) using R: A Workbook (p. 197). Springer Nature. DOI: 10.1007/978-3-030-80519-7

Hair Jr, J. F., Hult, G. T. M., Ringle, C. M., Sarstedt, M., Danks, N. P., Ray, S., & Ray, S. (2021). An introduction to structural equation modeling. Partial Least Squares Structural Equation Modeling (PLS-SEM) Using R: A Workbook, 1-29. https://doi.org/10.1007/978-3-030-80519-7_1

Hallin, A., Karrbom‐Gustavsson, T., & Dobers, P. (2021). Transition towards and of sustainability—understanding sustainability as performative. Business Strategy and the Environment, 30(4), 1948-1957. https://doi.org/10.1002/bse.2726

Hendriks, E., Voogt, L., Lenoir, D., Coppieters, I., & Ickmans, K. (2020). Convergent validity of the central sensitization inventory in chronic whiplash-associated disorders; associations with quantitative sensory testing, pain intensity, fatigue, and psychosocial factors. Pain Medicine, 21(12), 3401-3412. https://doi.org/10.1093/pm/pnaa276

Hussain, A., Bui, V. H., & Musilek, P. (2023). Local demand Management of charging stations using vehicle-to-vehicle Service: A welfare maximization-based soft actor-critic model. ETransportation, 18, 100280. https://doi.org/10.1016/j.etran.2023.100280

Iqbal, S., Sarfraz, M., Ayyub, M., Tariq, M., Chakrabortty, R. K., Ryan, M. J., & Alamri, B. (2021). A comprehensive review on residential demand side management strategies in smart grid environment. Sustainability, 13(13), 7170. https://doi.org/10.3390/su13137170

Kiani, M., & Andalib Ardakani, D. (2023). Analyzing the cause and effect relationships of the challenges of implementing sustainable supply chain management the case of Ardakan Glass factories in Yazd. Research in Production and Operations Management, 14(2), 99-124. Doi: 10.22108/pom.2023.136570.1492. Doi: 10.22108/POM.2023.136570.1492

Lee, K., Azmi, N., Hanaysha, J., Alzoubi, H., & Alshurideh, M. (2022). The effect of digital supply chain on organizational performance: An empirical study in Malaysia manufacturing industry. Uncertain Supply Chain Management, 10(2), 495-510.

DOI: 10.5267/j.uscm.2021.12.002

Mariano-Hernández, D., Hernández-Callejo, L., Zorita-Lamadrid, A., Duque-Pérez, O., & García, F. S. (2021). A review of strategies for building energy management system: model predictive control, demand side management, optimization, and fault detect & diagnosis. Journal of Building Engineering, 33, 101692.‏ https://doi.org/10.1016/j.jobe.2020.101692

Mirzaei, A., Azarm, H., Noshad, M., & Alizadeh, B. (2021). Identifying barriers and problems in the sustainable supply chain of the chicken meat industry using grounded theory. Iranian Journal of Biosystems Engineering, 52(2), 271-285. (In Persian)

DOI: 10.22059/IJBSE.2021.314258.665362

Mohamedamin, P. F., & Fatahi, N. (2022). Relationship between personality traits and violence involvement-a study of high school students in Northern Iraq. Acta Informatica Medica, 30(3), 213. DOI: 10.5455/aim.2022.30.213-219

Mohammad, W. M. W., & Wasiuzzaman, S. (2021). Environmental, social and governance (ESG) disclosure, competitive advantage and performance of firms in Malaysia. Cleaner Environmental Systems, 2, 100015. https://doi.org/10.1016/j.cesys.2021.100015

Mrazek, C., Haschke-Becher, E., Felder, T. K., Keppel, M. H., Oberkofler, H., & Cadamuro, J. (2021). Laboratory demand management strategies—an overview. Diagnostics, 11(7), 1141. https://doi.org/10.3390/diagnostics11071141

Muzammil, M. (2022). Evaluating the factors to improve the organizational performance: organizational performance. South Asian management review, 1(1), 39-48. https://doi.org/10.57044/SAMR.2022.1.1.2204

Nawi, F. A. M., Tambi, A. M. A., Samat, M. F., and Baistaman, J. (2020). Human capital investment (HCI) determinats affecting the institution’s performance: The practicality of the partial least square structural equation modeling (PLS-SEM) approach. Volume 8, Number 2, pp. 175-183 https://doi.org/10.18510/hssr.2020.8221

Pélabon, C., Hilde, C. H., Einum, S., & Gamelon, M. (2020). On the use of the coefficient of variation to quantify and compare trait variation. Evolution Letters, 4(3), 180-188. https://doi.org/10.1002/evl3.171

Rajabi Farjad, H, & Nazari, M. (2021). The effect of knowledge management on organizational performance with the role of sustainable supply chain management. Andisheh Amad, 19(75), 141-168. (In Persian) SID. https://sid.ir/paper/378930/en

Rajani, R. L., Heggde, G. S., Kumar, R., & Bangwal, D. (2023). Demand management approaches in services sector and influence on company performance. International Journal of Productivity and Performance Management, 72(10), 2808-2837.‏ https://doi.org/10.1108/IJPPM-02-2022-0080

Rajani, R. L., Heggde, G. S., Kumar, R., & Chauhan, P. (2022). Demand management strategies role in Sustainability of Service Industry and Impacts Performance of Company: Using SEM approach. Journal of cleaner production, 369, 133311. https://doi.org/10.1016/j.jclepro.2022.133311

Sardana, D., Gupta, N., Kumar, V., & Terziovski, M. (2020). CSR ‘sustainability’practices and firm performance in an emerging economy. Journal of Cleaner Production, 258, 120766. https://doi.org/10.1016/j.jclepro.2020.120766

Rezaian Fardoie, S., Farbod, E., Hourali, M., & Noori Mahramani, F. (2023). The Impact of Production and Strategic Flexibility on Supply Chain Agility, Company Performance and Competitive Advantage with a Resource-Based View Approach. Supply Chain Management, 24(77), 93-103.. (In Persian). DOI: 20.1001.1.20089198.1401.24.77.6.9

Salimi, M. (2024). An Investigation of relationship between corporate sustainability performance and cost of capital considering the mediating role of corporate risk. Novel Explorations in Computational Science and Behavioral Management, (), -. DOI: 10.22034/necsbm.2024.457581.1055

Samiei, H. A., Mehrabian, A., Ashrafi, M., & Khamaki, A. (2023). Financial benefits and costs, sustainable supply chain, conditions of uncertainty, manufacturing companies. Journal of value creating in Business Management, 3(3), 41-64. (In Persian). DOI: 10.22034/jvcbm.2023.402968.1120.

Saha, R., Shashi, Cerchione, R., Singh, R., & Dahiya, R. (2020). Effect of ethical leadership and corporate social responsibility on firm performance: A systematic review. Corporate Social Responsibility and Environmental Management, 27(2), 409-429. https://doi.org/10.1002/csr.1824

Saunila, M., Nasiri, M., Ukko, J., & Rantala, T. (2019). Smart technologies and corporate sustainability: the mediation effect of corporate sustainability strategy. Computers in Industry, 108, 178-185.‏ https://doi.org/10.1016/j.compind.2019.03.003

Shafaei, M., kouloubandi, A., & Keramati, M. (2024). The effect of knowledge management on organizational performance considering the mediating variable of business process. Management. Journal of Value Creating in Business Management, 3(4), 1-19. DOI: 10.22034/jvcbm.2024.414362.1173. (In Persian)

https://doi.org/10.22034/jvcbm.2024.414362.1173

Tipantuña, C., & Hesselbach, X. (2018, June). Demand-response power management strategy using time shifting capabilities. In Proceedings of the Ninth International Conference on Future Energy Systems (pp. 480-485).‏ https://doi.org/10.1145/3208903.321351

Yaqoubizadeh Venini, Yousefi Zenouz, Abtahi, Seyed Amir Reza, Khalee Damghani, & Kaveh. (2023). Presenting a model to evaluate the efficiency of supply chain sustainability by considering the relative balance between sustainability goals using game theory. Quarterly Journal of Strategic Management in Industrial Systems (formerly Industrial Management), 17(62), 19-36. DOI:10.30495/imj.2023.1962628.1781

Zhang, Y., Khan, U., Lee, S., & Salik, M. (2019). The influence of management innovation and technological innovation on organization performance. A Mediating Role of Sustainability. 11(2), 495. https://doi.org/10.3390/su11020495.