Business Guidelines for Environmentally Friendly Plastic Industry
in The Digital Era
AMMARA DOKMAI, TAWEESAK ROOPSING, SUNEE WATTANAKOMOL
Faculty of Business Administration,
King Mongkut’s University of Technology North Bangkok,
1518 Pracharat 1 Road,Wongsawang, Bangsue, Bangkok 10800,
THAILAND
Abstract: At present, the total revenue of plastic production in the plastic industry is continuously decreasing.
The purpose of this study was to investigate the business practices of the environmentally friendly plastic
industry in the digital era and then develop it into a structural equation model. Then it was developed into a
structural equation model. Both qualitative and quantitative methods were integrated into this research. The
quantitative data were collected with questionnaires from 5 0 0 executives of plastic industry businesses.
Descriptive, referential, and multivariate statistics were used to analyze the data. It was found that there were 4
components prioritized as follows: 1) Marketing Orientation (𝑥= 4 .2 8 ) , 2 ) Innovation (𝑥= 4 . 1 7 ) , 3 )
Resources (𝑥= 4.15), and 4) Business alliances (𝑥= 4.15), respectively. The detailed item found most important
in each element was: explore new markets for environmentally friendly plastic products to expand business
opportunities, study and develop new raw materials durable for reuse, provide a process of using used plastic
products to produce new products to add value, and collaborate with various business groups to improve
practice guidelines under the concept of 3R to be environmentally friendly. As for the hypothesis testing, it was
found that small, medium and large businesses differently recognized the importance of the studied guidelines
at the statistical significance level of 0 .0 5 . The analysis of the developed structural equation model revealed
that it passed the assessment criteria and was consistent with the empirical data. The calculated values of the
probability of chi-square, the relative chi-square, the index of consistency, and the root mean squared error of
approximation were 0.101, 1.128, 0.960, and 0.016, respectively.
Key-Words: Structural Equation Model, Plastic Industry, Environmentally Friendly, The Digital Era
Received: July 17, 2022. Revised: January 25, 2023. Accepted: February 18, 2023. Published: March 10, 2023.
1 Introduction
An international issue, plastic waste has an impact
on both land and marine areas. It is an important
issue that has to be resolved and is a significant
barrier to Thailand's and the ASEAN region's
efforts to manage plastic waste. According to the
Sufficiency Economy's guiding principles, the Thai
government has set a goal for Thailand to be a
stable, successful, sustainable, and developed
nation during the course of the next 20 years
(2018–2037). Additionally, in order to develop all
sectors to move in the same direction towards the
Sustainable Development Goals (SDGs) to create
good environmental quality, reduce pollution, and
reduce the impact on people's health and the
environment, the government has also developed a
national strategy for building growth on the
foundation of an environmentally friendly quality
of life through organizing a conservation system,
including restoring and preventing the destruction
of natural resources. On the basis of the nation's
rankings for sustainability and sustainable progress
in quality from 2018 to 2037, the Environment
Performance Index (EPI) aim was established. The
goals are to fall below the top 50 countries in the
globe from 2018 to 2022, the top 40 countries from
2023 to 2027, the top 30 countries from 2028 to
2022, and the top 20 countries from 2033 to 2037,
respectively. Thailand falls short of the desired
position, coming in at 108 out of 180 countries,
according to a 2022 poll, [1] [2].
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Fig. 1: Thailand Environmental Performance Index target values from 2018–2037, [2].
Fig. 2: the number of liquidations in the plastics manufacturing industry, [3].
After the creation of legislation to minimize
the quantity of plastic waste in the nation, the
amount of plastic output typically declines. This is
consistent with the downward trend in production
volume seen in the plastics sector.
Figure 2 shows that there are more liquidations
now than there were before in the plastics
manufacturing sector. As a result, the plastics
industry must make adjustments and utilize
technology to grow businesses and advance in the
digital era. For example, encourage the recycling of
plastics, the use of bioplastics, and the use of more
alternative materials to emphasize the development
of the plastic industry and the use of technology
that can strengthen it and promote sustainable
coexistence with the environment.
The plastics sector must adapt to this
transformation in order to deal with the
aforementioned problems. In order to establish
an industry that is both environmentally and
socially responsible, the researcher is interested
in examining the research project titled "Business
Guidelines for Environmentally Friendly Plastic
Industry in The Digital Era." Including the
plastics sector firm, which will be able to
maintain its operations if it can coexist
peacefully and sustainably with society and the
community.
1.1 Research Objectives
1 ) To research the elements of the eco-
friendly plastics industry's business practices in the
digital era.
2 ) To develop a structural equation model
of the eco-friendly plastics industry's modern
business procedures.
2 Literature Review
2.1 Plastics
Plastic is a term for synthetic organic compounds
that hardens when cold and softens when warm.
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Artificial rubber is used to create items like
clothing, film, containers, boat or automobile parts,
etc. Some are permanently toughened, such as
nylon, [4]. Based on their intended functions, plastics
can be divided into two groups: 1) Thermoplastics,
which melt when heated and stiffen when cooled.
Grocery bags, food cooler bags, often opened bottle
caps, and food containers can all be multiple times
annealed; 2) Thermosetting can be melted into a
mold. It can only be used once, and when heated or
compressed, it undergoes a chemical transformation
that is visible in things like household item handles,
coating materials, adhesives, etc., [5].
2.2 Concepts and theories Related to Market
Orientation
A key tenet of successfully executing contemporary
marketing strategy management is the market focus
notion, [6]. And what drives action in the
company's marketing regarding the needs of both
current and potential customers is the use of
marketing principles or their integration with a
customer-centric approach, [ 7]. The value of
market orientation is recognized in contemporary
marketing plan management. It consists of three
parts: a competitive focus, a customer focus, and an
internal cooperation collaborative focus, [8].
Additionally, brand performance and image are
impacted by market orientation, [9]. As a result of a
response that considers the needs and the market
environment and makes the organization adaptable,
the customer receives a cost-effective product, [10].
2.3 Concepts and Theories Related to
Business Alliance
Business alliances are agreements between two
or more organizations or firms to operate a
business together in order to meet each other's
business needs and accomplish predetermined
objectives, [11]. The costs and advantages of
business partnerships are the major
considerations for firms. There are four different
sorts of alliances: 1) An ad hoc pool is a brief-term
joint venture in which shares are allotted in
accordance with prior agreements. 2) The
consortium is where businesses or organizations
enter into agreements or delegate duties in a more
organized way. 3) A group of business partners
known as project-based joint ventures uses a
minimal number of resources to develop a strategic
value business and to evaluate the effects of
venture capital investments. 4) Full-fledged joint
ventures are ongoing business partnerships.
Business alliances are able to adjust when new
events happen and will continue to support
investment and resources in manufacturing, [12].
The stakeholders in the company are also benefited
from the development of strategic alliances. It is
separated into two categories: 1) Outsourcing the
knowledge to have the business outsource
production and services. This plan can shift risks
while lowering organizational costs. 2) Joint
Venture, which is a partnership between two or
more companies to establish a new firm to carry
out operations in a certain area by entering into
agreements between them. Its primary goal is to
jointly invest in and integrate resources including
money, technology, people, knowledge, operations,
etc., [13].
2 . 4 Concepts and Theories Related to
Resources
Resources are assets that belong to each
organization, both tangible and intangible, [14].
Strategic management for organizations is
governed by the Resource-Based View (RBV)
theory. Its fundamental objective is to use the
organization's knowledge and resource skills to
develop new products and make changes to
existing ones in order to acquire a competitive
edge. It has four characteristics: 1) Valuable
resources that add value to a company in a situation
where it is necessary to employ both its assets and
liabilities to seize chances and get rid of barriers. 2)
Rare resources, i.e., those with few rivals. The
value of a resource will decline if competitors have
access to it. 3) Imperfectly Imitable resources are
those that are difficult to duplicate or would be
expensive to reproduce, and 4) Non-substitutable
resources are those with unique qualities that
provide them with a competitive edge. In other
words, it stops rivals from producing comparable
resources, [15]. Additionally, in order to optimize
profit, hiring firms should share all the resources
needed for their operations. The majority of the
resources required consist of machinery, apparatus,
and facilities. Corporate data, such as descriptions of
current issues, client details, claims or complaints,
numbers, or statistics, however, are what matter the
most. Moreover, to conduct reliable analysis, it is
essential to provide important data, [16].
2.5 Concepts and Theories Related to
Innovation
By leveraging current resources or developing new
ones, innovation is a crucial organizational tool for
increasing business competitiveness, [17].
Additionally, it is the realization of concepts in
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order to produce new items or methods, [18]. At
the national level, innovation contributes to
competitive advantages. As a result, in order to
bring knowledge and creativity to produce new
ideas that match the needs of the market, it is
essential to encourage human resources within the
business to be creative and to be able to develop
technology to advance, [19]. Three categories are
used to categorize innovations: 1) New Market
Creating Innovation that opens new markets for
nations that lack goods and services or do not have
access to them; 2) Sustaining Innovation involves
improving already-available goods and services.
Existing customers who want a better good or
service make up the bulk of the market.
Additionally, companies can operate with fewer
resources when they use effective innovations. 3)
Market Creating Innovation gives a group of
individuals access to goods or services that they
would not otherwise have had. A new market with
a larger basis than before is now opening, [20].
Three categories can be used to categorize
innovation: 1) Product Innovation, which involves
developing new products or improving existing
ones; 2) Process Innovation, which involves
developing existing operations or designing
entirely new ones; and 3) Business Innovation,
which is an innovation used to alter the market in
response to consumer demand, [18].
3 Research Methodology
3.1 Composition Synthesis
The theories and concepts lead to the conclusion
that the market orientation, business alliance,
resource, and innovation components, as illustrated
in Figure 3, can be used to categorize the business
practices of the environmentally friendly plastics
industry in the digital era.
3.2 Population and Sample
The population used in this research was 4,2 6 8
industrial businesses that received Green Industry
Certification from the Department of Industrial
Works, [21], or were represented by a group of
executives or environmental representatives in
large industrial enterprises with more than 2 0 0
employees, and a group of executives or
environmental representatives in organizations of
small and medium-sized industrial enterprises with
a number of employees not exceeding 200,
according to the Ministerial Regulation on the
number of employment and fixed asset value, B.E.
2545, [22], for which Comrey and Lee defined the
sample size of 500 very good samples, [23],
comprising 250from small and medium-sized
businesses and 250from large businesses,
respectively.
3.3 Research Tools
The research tool was a rating scale questionnaire
with five criteria for determining the weight of the
evaluation using the Likert method, which gave
respondents the option to make the best decision,
[24]. Then, five experts with knowledge and
experience in the field were given the draft
questionnaire and the assessment form to review.
This was done to determine the tool's quality by
looking at the Index of Item-Objective Congruence
(IOC). IOC values between the question and the
research objectives ranged from 0.60 to 1.00, with
a preferred value of 0.50 and higher, [25]. The
questionnaire was then evaluated (Try-Out) with a
population of 30 people representative of the
study's population in order to identify any
discrimination. Standard Deviation was used to
estimate the checklist and scaled questions (SD).
By using correlation coefficient analysis and
questionnaire
Fig. 3: Conceptual Framework
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reliability, scaled questionnaires were estimated;
the discriminant index ranged from 0.35 to 1.46.
The overall confidence score for the questionnaire
was 0.98; a score above 0.9 was regarded as being
at a very good level, [26]. After that, use the tool to
gather data by asking the sample to complete the
survey.
3.4 Data Analysis
Both descriptive analysis and statistical analysis
using SPSS were used in the content analysis.
Multiple statistical analyses and the construction of
the structural equation model were conducted using
the Analysis of Moment Structure software
package (Analysis of Moment Structure: AMOS),
and the data-model fit was assessed using the
following four criteria: 1) Greater than 0.0 Chi-
square probability, 2) Relative Chi-Square less than
2.00, 3) Greater than 0.90 Goodness of Fit Index
(GFI), and 4) Root Index of the Squared Mean of
the Approximation Error Less Than 0.08 are all
requirements, [27].
4 Results
1) Analysis of the Market Orientation components
found that focus on the market, which is at a high
level in the overall median ( 𝑥 = 4.09). When
considering each aspect, it was found that the
survey of new markets for environmentally friendly
plastic products and goods for expanding business
opportunities which is at a high level in the overall
median (𝑥 = 4.28).
2) Analysis of the Resources components found that
entrepreneurs focus on resources, which is at a high
level in the overall median (𝑥 = 4.06). When
considering each aspect, it was found that there was
a process that uses used plastics to create new
products with added value, which is at a high level
in the overall median (𝑥 = 4.15).
3) Analysis of the Innovation components
found that entrepreneurs focus on innovation,
which is at a high level in the overall median (𝑥 =
4.04). When considering each aspect, it was found
that there was a study and development of new raw
materials used in the production of plastic products
and products that are durable to reuse, which is at a
high level in the overall median (𝑥 = 4.17).
4) Analysis of the Business Alliance found
that entrepreneurs focus on business alliances,
which is at a high level in the overall median (𝑥 =
4.02). When considering each aspect, it was found
that there is a cooperation between business groups
to develop guidelines to improve products or
processes under the concept of 3R (Reduce, Reuse,
Recycle) to be environmentally friendly, which is
at a high level in the overall median (𝑥 = 4.15).
Table 1 shows how important business
practices are to the environmental plastics sector as
a whole in the digital era. When the business size
was taken into account, there was a statistically
significant difference at 0.05.
In order to develop a structural equation
model, it is necessary to first reprocess the model
by removing some incorrect observational variables
one at a time while taking into account the
modification indices and the value of the result
from the packaged program. Continue doing this
until the model contains each of the four statistical
values: Among other metrics, there are the
following: 1) Chi-square Probability Level
(CMIN-p); 2) Relative Chi-square (CMIN/DF);
3) Goodness of Fit Index (GFI); and 4) Root Mean
Square Error of Approximation (RMSEA).
5) The findings of the objective analysis conducted
to determine the components of the business
practices used by the environmentally friendly
plastics industry include four elements: market
orientation, business alliances, resources,
Table 1. The statistical value used to compare the importance of business practices components of
the environmentally friendly plastics industry in the digital era is classified by industry business size overall
and by sector
Elements of business practices in the environmentally friendly plastics industry in
the digital era
t-Value
P-Value
The level of importance of the overall composition
-6.59
0.00*
Market Orientation)
-5.69
0.00*
Business Alliance
-5.22
0.00*
Resources
-5.62
0.00*
Innovation
-7.64
0.00*
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and innovation. All four elements came from the
analysis of pertinent literature. In accordance with
the literature and empirical data that met the
required standards, as shown in Table 2 and Figure
4, it appeared that the empirical data was consistent
with p-value = 0.101, CMIN/DF=1.128, GFI =
0.960, and RMSEA = 0.016, which was statistically
significant at 0.001.
Table 2. Observational Variables of Business Guidelines for Environmentally Friendly Plastic Industry in The
Digital Era
Business Guidelines for Environmentally Friendly Plastic Industry in The Digital Era
Market Orientation
Forecast the trend of environmentally friendly plastic instead of general plastic in the market
to design new products.
Explore opinions and market demands on the use of environmentally friendly plastics for
production planning.
analyze internal and external situations in order to adapt environmentally friendly plastic
product design strategies.
received "green label" certification to demonstrate the use of environmentally friendly
plastics.
Make marketing materials (Content Marketing) by making a story of environmentally
friendly plastic products.
Exchange of knowledge between the marketing department and other departments about
customer needs for new products.
Business Alliance
Clarify details or rules for working together, and communicate with one another if problems
or doubts arise.
Join government agencies in promoting the infrastructure needed for waste sorting systems.
Use all channels of social networks to coordinate with the network to build strength and
continuity.
Organize activities to exchange knowledge within the network about the process of handling
plastics after use.
Encourage employees to exchange knowledge with relevant departments to benefit the
organization and apply policies to the organization.
Resources
Provide channels to communicate information about personnel development, such as circular
notices, intranets, and public relations boards.
Create a culture of building environmental awareness among personnel.
Set up a system to remind about the maintenance of the machinery at the specified time to
reduce the loss of production.
Plan the use of resources in the organization, both short-term and long-term, to support
resource allocation to meet demand.
Create a process for reusing used plastic to make new products that add value to existing
ones.
Innovation
Create an effective knowledge management system to be used as information for
organizational innovation.
Create an agency to study foreign innovation information to look for new opportunities and
lead to research and development in Thailand.
Study and develop new raw materials used in the production of durable plastic products and
products to be reused.
Manage innovations that receive new innovations from abroad to enhance the capabilities of
innovators.
Provide clear performance indicators for innovation.
Use feedback from customers' responses to research and develop plastic innovations that are
modern and meet the needs of reducing the use of plastic bags.
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Fig. 4: Represents the structural equation model relationship path (Source: prepared by the authors)
In standardized estimate mode, Figure 4
displays the findings of the analysis of the overall
influence of latent variables in the business model
equation model for the environmentally friendly
plastics industry. After the model was improved, it
was discovered that the market-focused component,
which had a standardized regression weight of
0.71, had the most overall impact on the innovation
component.
5 Discussion and Conclusion
The research results can be concluded by using
descriptive statistics and structural equation
modeling, as follow:
1 ) The component of market orientation
had a direct impact on the composition of the
business alliance, according to the standard
regression weight of 0.82 with a statistical
significance level of 0.001, which demonstrates
empirical data that is consistent with Han and
Kang's research on the market focus component
orientation that can lead to market uncertainty due
to demand volatility and fierce business
competition, [28]. In other words, market
uncertainty affects business partners, and in this
situation, business alliances are made, especially
with organizations that have the marketing know-
how and expertise to profit from the hedging of the
plastic resin price war. Kurniawan et al.'s research
indicates that, [29], the market frames business
partners to simplify procedures and boost
organizational effectiveness. This is one of the
factors that encourage business partnerships in
order to maintain and grow a company. And also, it
is in accordance with the research of Farooq and
Vij, [30], that said Marketing-focused development
requires customer orientation, competitor direction,
and marketing links, which many organizations
tend to overlook.
2) The Market Orientation component
directly influences the resources component. The
standardized regression weight was 0.54 with a
statistical significance level of 0.001, which is in
accordance with the research of Zhao et al., [31],
that said exploring new markets can use social
media and social networks for marketing and want
to optimize marketing strategies. And it is also in
accordance with the research of Nurhilalia et al.,
[32], that said the coordination between
departments can take place until marketing
efficiency is improved. If SMEs in the silk business
focus on competition, customers, and complex
innovation orientation according to Resource-
Based View (RBV) theory, and Structure-Conduct-
Performance (SCP) theory that provides an
overview of resource optimization strategies for
silk traders to implement strategic steps, including
using digital technology to access marketing
strategies and the need for promotion to reach a
wider market and consumers in order to gain a
competitive advantage in the future.
3) The Business Alliance component
directly influences the resource component. The
standardized regression weight was 0.40 with a
statistical significance level of 0 .0 0 1 , which is in
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accordance with the research of Golmohammadi
et al., [33], which includes studying cooperation
between sellers and buyers in order to improve the
efficiency of sellers to improve product quality,
reduce costs, and increase the ability to increase
profits for members. The results of this study
revealed that seller development programs are
widely implemented in various industries by
striving for collaborative efforts between sellers
and buyers through a seller-related strategy as
follows: 1 ) wholesale price adjustments; 2 )
investment share payment; and 3 ) investment
control, all three of which are related to corporate
resources. It is also in accordance with the research
of Peterman et al., [34], which aims to explore the
role that multisector organizations can accept in
sharing knowledge through partner networks to
support sustainability. The research examines
stakeholders from US government agencies whose
research labs are funded by the federal government,
private companies, and trade associations. Research
has found that managing environmental and social
challenges is too much of a responsibility for any
organization due to policy, organizational, and
innovation obstacles. Therefore, the researchers
proposed a framework in which different
organizations play different roles in the partner
network depending on the organization's resource
objectives and the relationship between the partner
members. If the alliance has a similar pattern, it
results in the alliance sharing knowledge that
focuses on sustainability, sharing technology, and
allocating resources to reduce costs.
4) The Business Alliance component
directly influences the Innovation component. The
standardized regression weight was 0.40 with a
statistical significance level of 0 .0 0 1 , which is in
accordance with the research of Ybarra and Yurk,
[35]. The results show that to compete effectively
in a changing environment requires innovation to
stay competitive and to build partnerships, which
are powerful tools that reach customer needs.
Moreover, it is also in accordance with the research
of Ferreira et al., [36], which said that integrating
knowledge acquired from partners to develop new
knowledge could increase the effectiveness of
innovative work. Furthermore, it is also in
accordance with the research of Zeng, [37], which
found that the relationship between the network of
partners and the results of operations has resulted in
the creation of innovative SMEs and their
competitive advantage.
5) The Resources component directly
influences the Innovation component. The
standardized regression weight was 0.44 with a
statistical significance level of 0 .0 0 1 , which is in
accordance with the research of Riana et al., [38],
which said that strategic resource management is a
focus, especially on technology and innovation
resource management. Moreover, it is also in
accordance with the research of Sinkovics et al.,
[39], that studied the commitment of resources,
innovation, and collaboration. It explores the
creation of shared value between manufacturing
companies and third parties known as logistics
service providers (3PLs). The goal of examining
the relationship between resource commitment,
collaboration, innovation, and performance. The
results showed that the cooperation between
manufacturers and 3PLs is a relationship between
resource commitment, innovation, and efficiency
that results in 3PLs becoming collaborative
partners that support the concept of strategic value
creation. The results are also in accordance with the
research of Onprasirt et al., [40], who conducted a
research study on the management of rubber
processing for sustainable competition. The
research found that the Resources component
directly influences the Innovation component. The
standardized regression weight was 0.79 which
shows that the organizational resources required to
achieve innovation in rubber processing are
financial resources, human resources, physical
resources, and business competency resources. And
also in accordance with the research of Srihabut et
al., [41], who conducted a research named
Strategies for Value Added Creation in Thai Rice
Industry in which the result found that the rice
industry is highly competitive due to the current
age of news and information, so consumers can
compare products quickly. If entrepreneurs focus
on price competition, they will not be able to
compete sustainably. However, if entrepreneurs
want to have an advantage over competitors in the
market, they need to innovate different products to
deliver superior value to consumers.
6) The overall importance of business
practices components of the plastics industry in the
digital era differed by business size by a
statistically significant difference of 0.05. That is to
say, the large plastics industry has enough capital
to explore new markets for the development of
plastic products and products to expand business
opportunities. This is different from the small and
medium-sized plastics industry, which does not
have enough capital to explore new markets.
Parsons, [42], said that Marks & Spencer's product
development was intended to preserve and enhance
the company's core values of standards, quality,
safety, freshness, hygiene, and convenience. In
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addition, large-scale plastics industry businesses
have the advantage of communicating marketing
with creative content that meets customers' needs
across multiple channels and having exchanges
between different departments regarding customer
demand for new products. The aforementioned is in
accordance with the research of Ozuem et al., [43],
which used an integrated approach in marketing
communication to develop a concept model using
strategic principles to organize marketing
communication activities that are different from the
small and medium-sized plastics industry with
traditional production models. There is also no
improvement in new products that meet the needs
of customers. Moreover, large plastics industry
businesses have the ability to set up an in-house
plastics innovation incubator. This gives the
organization a dedicated research and development
department and makes it different from the small
and medium-sized plastics industry, which can only
join government agencies and apply government
policies to develop products that cause business
practices that are slow to meet the needs of
customers.
6 Suggestions
1) The novel coronavirus disease 2019 (Covid-19)
situation has led to an increase in plastic waste.
Although the roadmap for Thailand's plastic waste
management aims to reduce plastic waste, the
COVID-19 situation directly affects the industrial
sector that operates under environmentally friendly
restrictions. Therefore, it is important to focus on
planning to cope with the uncertain situations that will
arise, and it is a challenge that all sectors must work
together to reach in order to maintain effective
operational performance.
2) The plastics industry business should
concentrate on management by clearly defining
the direction of innovation management and
establishing an organization innovation unit to act
as a driving force in innovation management in
accordance with the objectives that focus on the
results of improving the original and building on
the idea of change. For this reason, executives
need to focus on the policy by defining a clear
structure of duties, supporting budgets, personnel,
training, and leading change in order to gain a
competitive advantage.
3) Plastic industry businesses should create social
responsibility by not emitting pollution,
wastewater, or polluted air that affects the nearby
communities and by helping society on various
occasions, such as having an environmentally
friendly production process, campaigning to raise
awareness among employees about environmental
protection, participating in activities related to
helping communities, and implementing the ISO
international standard system in the production
process, etc. These are measures to enhance
competitiveness.
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