The role of organizational performance in sustaining competitive advantage through reverse logistics activities

Purpose Reverse logistics (RL) activities are becoming crucial in today’s business environment because of their ability to enhance organizational capabilities to manage waste and resources effectively and efficiently as an approach for achieving sustainability. These capabilities can eventually create sustainable competitive advantage (SCA). Drawing on resource-based view (RBV), this study posits RL as a tool to develop capabilities gained from high performance (financial and nonfinancial) to enhance SCA. Design/methodology/approach Covariance-based structural equation modeling (SEM) was used to analyze 1,207 responses collected from manufacturing organizations operating in Egypt. Data were gathered through an online survey sent via email to manufacturing organizations operating in Egypt, particularly Cairo, Giza and Alexandria, as these governorates contain most business activities in Egypt and hence high a percentage of waste. Findings Results indicated that RL activities (recycling, remanufacturing, repair, recondition and disposal) can fully mediate the relationship between organizational performance (financial and nonfinancial) and SCA. However, the remanufacturing and recycling mediating roles between financial performance and SCA were not significant. Research limitations/implications Applying this research in a developing country (Egypt) will help extend RBV and incentivize organizations to apply RL activities, which can potentially solve several environmental issues such as decreasing waste. Originality/value Using the research variables in combination will help in filling the literature gap as previous research focused on RL and only organizational operational performance, where RL was used as an independent variable with no illustration of how its dimensions affect performance or its mediating role between performance and SCA.