Analyzing the Effect of Lean Six Sigma Practices and Green Culture on Circular Manufacturing Capabilities in Achieving 3P Performance

Saumyaranjan Sahoo, V. G. Venkatesh, Yangyan Shi, V. Raja Sreedharan and Martin Schleper

Business Strategy and the Environment, 2026, vol. 35, issue 1, 458-474

Abstract: The investigation intends to contribute to the growing interest among academics and practitioners worldwide by advancing knowledge of how manufacturers can improve their 3P (planet, profit, and people) performance through systemic mechanisms. The objectives of this research are to (1) assess the effect of lean six sigma practices and green culture on developing circular manufacturing capabilities among manufacturers and (2) assess how such developed circular manufacturing capabilities translate into better 3P performance in the backdrop of Industry 4.0 technologies. In pursuit of the stated objectives, the research team conducted a survey of 232 manufacturers and analyzed the collected data using the structural equation modeling approach. The assessment demonstrates that the enactment of lean six sigma practices and the adoption of a green culture have a significant and positive influence on the development of circular manufacturing capabilities. This, in turn, leads to improvements in environmental, economic, and social performance (i.e., 3P performance). Further, it has been found that the utilization of Industry 4.0 technologies by manufacturers has a significant moderating effect on the impact of their circular manufacturing capabilities on their 3P performance. The results have substantial implications for administrators looking to streamline their adoption of Industry 4.0 technologies and lean six sigma practices and cultivate a green culture to enhance their competitive advantage and boost their reputation.

Date: 2026
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