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European Journal of Social Impact and Circular Economy - ISSN: 2704-9906  
DOI: 10.13135/2704-9906/5068 Published by University of Turin http://www.ojs.unito.it/index.php/ejsice/index 
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Green and sustainable construction practices 
impact on Organizational Development 
 

Ubaid ur Rehman1, Muhammad Shafiq2, Hasan Ali3, Mohammad Abdullah4 

1 Project Management, SZABIST, Islamabad, Pakistan,  
2 Assistant Professor, SZABIST, Islamabad, Pakistan   
3 Project Management, SZABIST, Islamabad, Pakistan 
4 Project Management, SZABIST, Islamabad, Pakistan 
 
E-mail:1ubaidq1993@gmail.com; 2dr.shafiq@szabist-isb.edu.pk; 3hasan582@gmail.com; 
4abdullahaijaz82@gmail.com 
 
Received: 30/08/2020 
Revised: 01/10/2020 
Accepted for publication: 02/10/2020 
Published: 26/10/2020 

 

Abstract 

Green Marketing plays important role in the organizational performance irrespective to the industry and 

the type of project. However green construction research lacks in the field of construction project. Basic 

purpose of this work was to highlight the impact of modern techniques such as green construction on the 

organizational performance through the adoption of sustainable practices in business strategies in 

construction industry. Data was collected from 132 organizations, working on different construction 

projects located within the city of Rawalpindi and Islamabad, through online questionnaire survey in two 

strata in terms of consultant and contractors. Data was analyzed through different tests, included Pearson’s 

correlation coefficient as well as regression using IBM SPSS Statistics Version 20. Study indicated that 

green construction has a strong correlation and positive impact on organizational performance, and this 

correlation partially mediated by the sustainable development. The research findings have practical 

implications both in organizational and project manager’s perspectives. This research was limited to 

specific geographic area due to time and cost constraints. Future researchers may opt to conduct the study 

in other geographic areas of Pakistan and in different industries. Moreover, additional or different 

mediating variables can also be used in the future work. 

 

 



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Keywords: Sustainable Development; Organizational Performance; Green Construction; Environment 
Protection; Project Success.

 

1. Introduction  

Worldwide, construction industry contributed approximately 9% in GDP with 7% employment rate. 

The industry contributed significantly to socio-economic development and open different avenues of 

common interest for different stakeholder to work together. The Asian policies also have tended to keep 

construction industry busy as governments spend on infrastructure as a way of protecting jobs and boost 

the economy. (Saenz & Brown, 2018). Heavy civil engineering have built infrastructure of country through 

the construction of highways, bridges, tunnels and other national or international level construction 

project. Population have increased due to gradual increase of birth rate which have created burden on 

economy, resulting in the increase in the demand of houses with the passage of time. (Zampese, Moori, & 

Caldeira, 2016) Increment in population not only disturbed economy but also imposed burden on urban 

infrastructure through the migration of people due to lack of resources in rural areas. (Farooqui & Ahmed, 

2008). However Gradual change in infrastructure development involves complexities such as, required 

extensive area of intervention and excavation service are large construction work generators. It is 

important to change strategies to reduce environmental impacts on construction stage in development of 

urban infrastructure. Hence, in modern development construction with less environment degradation 

preferred (Bedrunka, 2020).  

Pakistan is a developing country having construction as the second largest sector in Pakistan’s economy 

after the agriculture. Construction Industry have contributed 13.1% in industrial sector and 2.74% in GDP. 

Roughly 30-35% in employment sector are directly or indirectly affiliated with the construction sector. 

(Malik & Wahid, 2014). In construction industry, protection of environment is a major challenge, and an 

alarming situation towards sustainable development in which waste management is a big issue. It is not 

possible to control the fully waste while reuse of recycling and waste. Gradual change in climate and 

deposition of waste pollutants affect our environment very badly as well as our agriculture production, 

quality of life and tourism. (Huang et al., 2017) Industries and companies of such good production are 

more responsible as compared to any other sector, being environment vulnerable and need quick action to 

more towards green practices. Product consumption and effectiveness depends on consumer through 



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market value, the market behavior including consumer demand and consumer awareness, appreciate the 

companies practices towards “Green” (Biasutti & Frate, 2017).  

Green marketing has influenced the organizational performance quite strongly. However, there is gap 

in the literature about the impact of green construction on organizational performance and research lack 

in the field of construction project (Zampese et al., 2016). According to Zampese et al. (2016) every 

construction project either residential or commercial have broader impact on the organizational and 

industrial performance after its completion. Impact can be either as a good practice or bad, particularly by 

examining the project impact related to environment by studying companies’ legal, economic and 

technological skills aspect which may also cause deep impact on industry. Though, literature is available 

about green marketing but it weakens the relationship between supply chain management and company’s 

performance. Construction project performance directly affect the organizational and industrial 

performance. In construction industry it is important to understand the pitfalls and challenges which can 

be incorporated. This paper highlighted the importance of green construction project with the adoption of 

sustainability techniques and their impact on organizational performance. Basic purpose of this study is to 

examine the impact of green construction project in organizational performance by analyzing empirically 

the different factors such as reuse of old material, reduce waste production and environment preservation. 

Other purpose is to find out either any positive impact may occur in construction industry by considering 

the mediating role of sustainability techniques includes environment protection, climate change and 

sustainable urbanization which may help to enhanced the organizational performance. 

Many researchers highlighted the positive impact on organizational performances. A study done by Shi, 

Zuo, Huang, Huang, and Pullen (2013) in China which explored the positive impact of sustainable 

construction on community and environment through the properly management of overheads, time and 

availability of sustainable materials which can enhance the organizational performances and also reduces 

the industry barriers. Another USA based study by Riley (2004) on Toyota Motor Corporation (TMC) real 

estate expansion project found that, green building popularity evolving worldwide in construction sector 

which involve quick change in design stages but also found that construction organizations can play 

important role through the adoption of sustainable practices in their business strategies.  

The implementation of green concept in company’s strategies can bring significant positive changes in 

profitability, marketing values and cost performance through the facilitation in consumption, production, 

promotion sector and also resolve ecological problems. In construction industry, organization have to deal 



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with different operation on regular basis, industry have diverse characteristics such as high fragmentation, 

vision of project, instability and mainly dependence of work force with high level of uncertainty. In this 

industry, mostly project relate to the on-site production and directly expose with environment. (Huang et 

al., 2017). Green Supply chain management including green construction, green product, and corporate 

practices towards sustainable development directly linked with organizational performance. (Rego & 

Figueira, 2017). Climate change, and environment protection policies’ implementation, were the great 

moderator to increase organizational performance. Researcher studies the exploratory model for the better 

understanding with companies and industries in which they operate and particularly examine the impact 

of environmental by studying their legal, economic and technological skills of companies. (Zampese et 

al., 2016) 

Developing countries as like Pakistan do not have strong construction industry, major challenges faced 

by organizations in Pakistan construction industry were found to be lack of expertise, resources, poor team 

management, employee’s commitment, quality, safety and risk management. Significant changes may 

occur with the strong coordination, teamwork, training and awareness, can improve organization 

performance as well as industry performance. Proceeding Section, relates the previous research and 

literature on the organizational performance, sustainable development, and green construction followed 

by the hypothesis before the methodology part described in section 3, while results and analysis shown in 

the section 4, Conclusion, discussion and limitations in section 5 respectively. 

 

2. Literature Review 

In this section, detailed review of previous research is expressed with respect to the variables of this 

study including green construction, sustainable development and organizational performance followed by 

the hypothesis according to the objectives defined from the gap for this research study. 

2.1 Organization Performance 

Organization performance is depended on the successful completion of the project while next allocation 

of project or contract mainly based on the organization performance related to previous project. 

(Gunasekaran et al., 2017). In construction industry, emerging concept of “green” that means to adopt 

such strategies at organization level which make project sustainable through less environment degradation, 

better economic impact and preserve natural resources. Purpose of the strategies to enhances organization 



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performance and fulfil current demands in a better way without compromising future demands. According 

to Darko and Chan (2016), in construction industry, organizational performance evaluated through various 

factors included: sale increment, market chare, corporate image, water consumption building, energy 

efficient building parameter, reuse of old building material, increment in revenue, risk reduction factor 

and financial result. (Zampese et al., 2016). 

2.2 Green Construction Project 

Construction build urban and rural infrastructure by providing developmental facilities through the 

execution of different commercial, residential or any kind of development projects. Green construction 

consists of six main factors such as; management of construction, protection of environment, conservation 

of material, water, energy and land utilization. (Shi et al., 2013). Every construction project involves 

through five basic aspects which is necessary for completion, including manpower, machine, material, 

method and environment Project success of any project mainly depend on the successful completion of 

project to meet triple triangle constrains including cost, scope, schedule and quality (Lin, 2015). Green 

construction involves on-site practices which reduces environmental impact of construction. These 

practices mainly related to contractor, and sub-contractor but modern researchers claim it is more 

responsibility of designer to introduce such practices so that alternative can be adopted during construction 

such as use of prefabrication structure which is time saving and environment friendly but it is more 

responsibility of designer to introduce such alternative in market which can be adopted by contractors. 

(Fawaz et al., 2016). Green construction involve; less waste production during construction on site, 

replacing toxic substances such as paints solvents etc., less liquidated waste, alternative energy efficient 

sources, and use of efficient sustainable practices. (Yigitcanlar, Kamruzzaman, & Teriman, 2015). The 

benefits of green construction project can be summarized as: enhanced quality of life, improved safety of 

residents, improved health and aesthetics, reduced household expenditures, creation of new employment 

opportunities and enhanced neighborhood vitality. (Bedrunka, 2020) 

2.2.1 Impact of Green construction on organizational performance.  

According to the Darko, Zhang, and Chan (2017), green construction mainly relates with green supply 

chain management process and involves three areas: importance, corporate practices, green design and 

operation. These areas involve saving resources, improving productivity and control waste production. 



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These practices may be more reactive if adopted in strategies in form of rules and regulations, or proactive, 

and proper ban harmful practices. Through this way integration of environmental activities was the scope 

of business strategies. (Huang et al., 2017). According to Darko and Chan (2016) green construction 

practices are the source of cost efficiency and profitability, it not only increase in market share but also 

reduces extra rework and engage logistics through optimizing resources. Latest innovation strengthens the 

organizational market values with their strategies and profit values without considering their size and 

capital. Researchers including Wei and Miraglia (2017) reported that, in Chinese manufacturing 

practically found that there is positive relationship exist between environmental management and 

organizational economic performance, while other researcher’s including, Lin (2015) found significant 

positive changes between corporate green practices and industrial financial performances through the 

implementing of green practices in electronic industry of Taiwan. 

2.3 Sustainable Development Practices 

This basic concept of sustainable development covered three important features include, economical, 

environment friendly and preserve natural resource for future generation. Interpretation of sustainable 

development vary with industry such as sustainable construction, sustainable business, sustainable 

technology, sustainable agriculture, sustainable economic etc. (Bedrunka, 2020). In Project Management 

scenarios, sustainability techniques brought positive impact in different dimensions of project which built 

interest of researchers and professionals towards sustainable project management which inter link multiple 

prospective such as social, environmental and economical. (Bocchini, Frangopol, Ummenhofer, & Zinke, 

2014) As per literature the concept of Sustainable development is to meet present challenges without 

compromising future demands (Holden, Linnerud, & Banister, 2014).  

2.3.1 Impact of Green construction in Sustainable development  

In last five years, climate change awareness rises through various sources of medium either educational 

or cultural; Researcher Johns‐Putra (2016) highlighted the awareness of climate through the medium of 

literacy including novel, theater and other media sources. There has been a growing trend, too, of climate 

change poetry, known as ecopoetry which exhibits the social and ecological awareness towards the 

environment degradation. Human interaction with environment poses sever risk on natural climate system. 

Although many impacts are already observed for the climate action in terms of toxic gases in air, rapid 



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melting of glacier, rise in sea level and ocean degradation since 1950s. However more scientific evidence 

is required to respond climate changes. (Linnenluecke, Birt, & Griffiths, 2015). 

According to Pedersen (2018) the united nation sustainable development goals, climate change mainly 

related with the environment protection policy which practically relate with construction industry 

development. The environment or climate protection regards the development of an awareness about 

alternative resources, mainly depend on the physical environment, and how human activity and decisions 

affect it, with a commitment to factoring environmental concerns into social and economic policy 

development including preservation of natural resources, climate change, rural development, sustainable 

urbanization, disaster prevention and mitigation (Ricart, Olcina, & Rico, 2019). Before implementation 

into construction industry, it’s important to introduce alternative resources with their social economic 

impact. (Zampese et al., 2016). Researchers including Secinaro, Brescia, Calandra, and Saiti (2020), also 

emphasizes on the adoption of climate mitigation sustainable practices at business level by indicating that 

international level firms adopted environmental practices in their business strategies to reduce the 

environment risk and bring significantly result in terms of increment in profit and organizational 

performance. 

Climate change practices mainly relate with protection of environment while construction project 

activities directly expose with environment and major cause of environment contamination through toxic 

gases, and increment in temperature which causes rise of earth temperature and depletion of ozone (Huang 

et al., 2017). Modern concept of green building through green construction is a major alternative source 

to deal with climatic changes. In design phase, architecture is the main source of greenhouse gas control 

and important constituent to deal with climatic change. Green buildings formulated after the green 

construction are energy efficient with low emission of toxic gases with less conservation of natural 

resources and make environment healthy. Hence, green construction practices make environment healthy 

and build better climate through environment protection with less degradation. (Darko & Chan, 2016)  

2.3.2 Sustainable development and organizational performance 

Process of sustainable development depends on the organizational hierarchy mainly internal polices, 

assessment criteria, strategies plan and their operational implementation. According to Bedrunka (2020), 

Environmental management system bound the organizations to formalize the policies in such a way that 

they can assess effect of their activities on environment, interaction of project with climate and find out 



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alternatives to cater the climatic challenges through different operational activities which causes less 

environment and natural resource degradation. Organizational performance mainly depends on the 

successful completion of project with good practices. (Biasutti & Frate, 2017) Every project causes social, 

environmental and economical after the completion, following these parameters, researchers found that 

sustainable product development through different alternative practices bring positive impact not only in 

organizational development but also at industrial level as a good lesson for other developers. We focus on 

climate change protection factor mainly include, environment protection policy and economic 

affect.(Gunasekaran et al., 2017).  

2.4 Mediation role of sustainable development practices 

Researchers including, Yee, Ismail, and Jing (2020), indicated the, adoption of environment protection 

and sustainable policies with their implementation bring significant effect at industrial level with their 

significant social and economic impact. Organizational development or performance basically deal with 

the parameter how can an organization achieve success by defining their milestone, performance 

indicators, and certain limitations, which based on their production. (Akram, Goraya, Malik, & Aljarallah, 

2018). Social and economic challenges relate the organizational performance which cater by the 

sustainable practices by adoption of alternatives strategies at organizational level which not only enhance 

the organization performance but also help to introduce latest modern practices in the industry. This is a 

step towards joint organizational and industrial revolution with the help of sustainable development. 

(Sormunen & Kärki, 2019). In order to preserve environment, it’s important to formulate policies at 

organizational level which cater these industrial challenges which may create disastrous effect for future 

generation. New research related to the sustainable development and their application introduce many 

alternatives of materials, which are energy saving and promote green building materials, standardization, 

high energy consumption construction to develop low energy consumption, effectively cope with climate 

change. It has been commonly accepted that green construction through sustainable development focuses 

on prevention of unnecessary consumption of natural resources (especially non-renewable ones) and 

mitigation of harmful emissions. (Bedrunka, 2020). Green construction resource material mainly seems 

limited to waste, toxic gases, industrial waste etc., but at broader level it involves coal, steel, electricity 

and chemical industry such as industrial waste can demolish natural resources. Mega project involves huge 

amount of resources while sustainable techniques preserve the environment by providing alternative tools 



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and techniques. (Rahmawati, Utomo, Anwar, Setijanti, & Nurcahyo, 2014). The emerging modern concept 

of “green building” in sustainable development, directs itself towards creation and use of models which 

are intended to be healthier as well as a more resource efficient.  These models include construction, 

operation, renovation, maintenance and finally demolition (Holden et al., 2014). 

2.5 Summary of Literature 

Through the literature studies we have studied about the green construction practices in the field of 

environment and economic which play vital role in organizational development. If there are strong green 

construction practices adopted on site during the construction project, it causes better organizational and 

industrial performance, hence sustainable development can play important role to strengthen the 

relationship. In this study we used organizational development and natural resource-based view theory to 

study the overall relationship between variables. Hypothesis and conceptual framework for this research 

study listed as; 

 
 
Fig. 1. Conceptual framework of research model 
 

Source – developed by the authors 

H1: Green construction has positive significant impact on organizational performance. 
H2: Green construction has positive impact towards sustainable development.  
H3: Sustainable development has positive impact in organizational performance.  
H4: Sustainable development mediates the relationship between green construction and organizational 
performance 
 

 

3. Method 

Research was carried out to find how the impact of green construction relate with the organizational 

performance of the construction companies. From literature questionnaire selected which cover all 



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variables. A five-point Likert scale was utilized to judge the severity indices of different criteria adopted 

for the respondent selection evaluation and further descriptive analysis (Armstrong, 1987). Employees 

working in construction industry either as a consultant, contractor, designer, or builder or in any other 

relevant department was selected 

3.1 Research design and data collection  

In this research study the population was the organizations employees working in the construction field 

either as a consultant, client, government, or contractor related to any project such as residential or 

commercial project located in urban areas across the twin cities Rawalpindi and Islamabad. Sample 

selected by using the G-Power software and found 120 organizations across the population of 507 

organizations as listed by the Pakistan Engineering Council. Non-Probability (proportionate convenient 

sampling) was used, data respondent includes, individual organization such as single employee for single 

organizations. We stratified our research study into two strata’s consultant and contractor and according 

the statistics of Pakistan Engineering council (PEC). We proportionate the questionnaire and then 

distributed conveniently. 12% questionnaire distributed with contractors while 88% distributed with 

consultant’s working in twin cities of Rawalpindi and Islamabad. 250 questionnaires circulated out of 

which 30 questionnaires shared with contractors and 220 shared with the consultant. During the survey, 

unit of analysis was the employee per organization working on public or private construction project from 

Islamabad and Rawalpindi. In this study, data collected from the companies working closely with the 

construction project related to either commercial or residential mainly including Housing project shopping 

complexes or any similar project. Organizations either currently working or done such projects in recent 

or in last two years were selected for this study. For descripting analysis, a five-point Likert scale, was 

used for measuring the response (Boone & Boone, 2012). Questionnaire selected from literature such as; 

organizational performance and green construction (Zampese et al., 2016) and sustainable development 

practices (Biasutti & Frate, 2017) respectively. 

3.2 Data Analysis 

After the collection of data, 132 responses were recorded, as per our stratified methodology and on the 

basis of responses we have 14 questionnaires from Contractor while remaining 118 respondents was 

consultant as per the defined percentage. Out of 132 (125 respondents were related to the construction and 



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planning sector of construction industry working in different organization while other 7 was related to the 

other sectors of construction). For analysis and interpretation of data and hypothesis we used statistical 

software IBM SPSS. Analysis of data including, distribution frequency demographics, reliability, 

correlation, linear and multiple regression. Multiple Regression is used to check the indirect path in overall 

total effect. It often provides better and easy approach over simple linear regression. Overall multiple 

regression highlights the influence, strength and contribution of more than one variable and overall 

contribution of variables in total effect. Furthermore, in multiple regression data was analyzed by using 

regression and process by Andrew F. Hayes model 4, with data coded according to an analysis framework 

based on a literature review, the questionnaire guide, and experience from similar research. The analysis 

was conducted by the authors in Statistical Package for the Social Sciences (SPSS) and checked with key 

actors. The survey was made clear and simple in order to encourage the participants so that they could 

respond quickly. Furthermore, the survey questionnaire was designed on the basis of existing literature of 

researchers. 

 

4. Result 

Research survey questionnaire attached with the demographic scale such as the Gender, Age, 

Qualifications and Experience of the respondents. 96% respondent was male, 62% respondent holding 

bachelor degree, 79% respondent have experience between 1 and 5 years, and 95% respondent working 

on Planning and execution of construction projects. Reliability test for the selected scale found as Green 

construction (0.824). sustainable development (0.745) and organization Performance as (0.898) 

respectively which is above 0.70. Descriptive Analysis give the detail about the mean, standard deviation, 

skewness and kurtosis of data extracted from the questionnaire survey which help to defined the normality 

parameter. After analysis the results shows the mean of Green Construction (GC) is 2.0038, Sustainable 

Development (SD) is 1.9970, and organization Performance is 2.1341.  

According to Gronemus et al. (2010), the data is considered to be normal if Skewness values lies in the 

range of +2 and Kurtosis in range +7. The results of Skewness & Kurtosis respective to each variable 

independently green construction, sustainable development and organizational performance are, Skewness 

as, 0.668, 0.277, 0.049, and kurtosis are -0.037, -0.570, -0.601 respectively, which fall in the defined range. 

In order to validate the scale, According to the Hair Jr, Sarstedt, Hopkins, and Kuppelwieser (2014)., 



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acceptable range of validity is 0.30. All of our question factor loading value is above 0.30 and no one 

question found less than 0.45 which lies within acceptable ranges.  

4.1 Variable Relationship  

Correlation analysis was led to discover the variables – independent, dependent and mediator or 

moderator variables mutually related with each other or not and to find out the strength of this relationship 

in quantitative terms. Correlation relate the intensity of the relationship between different variables used 

for the analysis which are listed below: 

Table 1. Correlation Analysis 

  GC  SD OP 

Green Construction (GC) Pearson Correlation 1   

Sig. (2-tailed)    

N 132   

Sustainable Development (SD) Pearson Correlation .207* 1  

Sig. (2-tailed) .017   

N 132   

Organization Performance (OP) Pearson Correlation .522** .319** 1 

Sig. (2-tailed) .000 .000  

N 132 132 132 

Source – developed by the authors 

 

The relationship between Green construction and organization performance found strongly positive 

relationship as Pearson correlation value is positive 0.522 with the highly significance level 0.000 (Less 

than 0.05). The relationship between Sustainable development and the Organization performance found 

moderate and positive relationship at value 0.319 at high significance level. Similarly, relationship 

between green construction and sustainable development is positive at 0.20 and statistically significant at 

0.017 (less than 0.05). Therefore, summarizing the correlation analysis, it is concluded that strong positive 

correlation exists between the predictor and outcome variables as well with the mediator variable. 

4.2 Linear Regression 

The regression analysis is used to understand the causal relationship of the predictors and outcome 

variables and the form of these relationships. The analysis is used to test the established hypothesized 



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relationship to determine the causality direction and quantitative magnitude between the model’s 

variables.  Linear Regression indicate about the direct relationship path between independent and 

dependent variable 

Table 2. Linear Regression: 
Model R R Square Adjusted R Square Std. Error EST 

1 .522a .272 .267 .51919 

a. Predictors: (Constant), GC 

Source – developed by the authors 

 

Table 3. ANOVA Test: 

 Model Sum of Squares df Mean Square F Sig. 

Regression 13.113 1 13.113 48.647 .000b 

Residual 35.043 130 .270   

Total 48.157 131    

a. Dependent Variable: Organizational Performance (OP) 
b. Predictors: (Constant), Green Construction (GC) 

 

Source – developed by the authors 

 
In first step analysis carried out to control the influence of demographics on the relationship between 

variable while in second step the regression analysis (ANOVA test) was carried out. According to the 

statistical result of analysis it is found that one-unit increase in IV i.e. green construction will tends to 

increase in the DV i.e. organizational performance by the 0.522 units while total effect is 0.445. F test 

value also above the 4.0, in our case we have 48.647 which indicate the acceptance of our hypothesis. The 

value of “Adjusted R Square” indicate the value of relationship between IV and DV. In our study variation 

exist between the Green construction and organization performance is 26.7% (0.267). Adjusted R square 

has smaller value as compared to R square. Standard error of estimates how much change is not elaborate 

by the model and for this model its value is 0.51919.  

 

 

 



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 Table 4. Coefficient of ANOVA Test 

 

 

 
 
a. Dependent Variable: OP 

Source – developed by the authors 

 

Table 4, indicate the result of linear regression analysis for Independent and outcome variable. Result 

indicate the positive relationship between the Green construction and organizational performance. After 

analysing results, it is clear that independent variable significantly impacts dependent variable. Hence all 

above result of ANOVA test of linear regression lies under the defined ranges which indicate that, Green 

construction (IV) bring positive significant changes in Organization Performance (DV). We can narrate 

as the one-unit change of green construction can bring 0.445 unit positive and significant change in 

organizational performance. First hypothesis of this research study or direct path relationship in conceptual 

framework is accepted. 

4.3 Multiple Regression for Mediation  

4.3.1 Impact of IV on Mediator  

Table 5. Model Summary of IV on Mediator 

R R-sq F df1 df2 p 

.2071 .0429 5.8243 1.0000 130.000 .0172 

 

Source – developed by the authors 

 

Result indicate the Multiple regression for indirect path as defined in conceptual framework, Indirect 

path further have two direct patches from IV to Mediator and from Mediator to DV. Initially for direct 

relationship of Green construction (IV) and Sustainable Development (Mediation) without consideration 

of outcome variable (organizational performance) statistical result as follow: significance level 

p=0.172<0.05,   Variable variation R-sq=.0429 (4.2 percent). Since value of p is less than 0.05 and F test 

value lies above 2.0, therefor overall model is significant. 

Model Unstandardized Coefficients Standardized 
Coefficients Beta 

t Sig. 

B Std. Error 

Constant 1.242 .136  9.153 .000 

Green Construction .445 .064 .522 6.975 .000 



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Table 6. Result of impact on Mediator 

 Coeff Se T P LLCI ULCI 

Constant 1.6243 .1638 9.9169 .0000 1.3002 1.9483 

GC .1860 .0771 2.4134 .0172 .0335 .3385 

 

Source – developed by the authors 

 
Result highlighted the Impact of independent variable (Green construction): Per unit variable change or 

coefficient (beta value) = 0.1860, T model test (t) = 2.4134, (Above 2.0), Significance level p = .00172 

(Less than 0.05), Boot value are non-negative, Null fall outside the strapping value so confidence interval 

also lies between Non-Zero. Hence; for every 1-unit increase in Green construction, we get a 0.186-unit 

increase in sustainable development. Hypothesis –II; Accepted. 

 

4.3.2 Direct effect on Outcome Variable 

Table 7. Model Summary of organizational performance 

R R-sq MSE F df1 df2 P 

.5648 .3190 .2542 30.2135 2.0000 129.0000 .0000 

Source – developed by the authors 

 

Table 7, indicated the Direct effect from independent variable and Mediator variable on Outcome 

variables. Analysis result shows as, significant value p<0.05, variable change R-Sq=.3190 (31.9 percent) 

variance exist due to two predictors. Since value of p is less than 0.05, and F test value is above 4.0, 

therefore overall model is significant.  

 

Table 8. Model of organizational performance 

 Coeff. se t P LLCI ULCI 

constant .9010 .1746 5.1599 .0000 .5555 1.2465 

GC .4063 .0634 6.4106 .0000 .2809 .5316 

SD .2098 .0706 2.9740 .0035 .0702 .3494 

Source – developed by the authors 



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Table 8, shows the overall result on outcome variable which is organizational performance from the 

sustainable development and Green Construction. The impact of Green construction (IV) as; Per item 

change through coefficient (beta value) = 0.4063, T Model test value, t = 6.4106, (Above 2.0) Significance 

value, p = .0000 (Less than 0.05), Confidence interval also lies between Non-Zero from upper limit and 

lower limit interval  

Secondly, mediation Sustainable Development impact on outcome variable as; Coefficient (beta value) 

= .2098, T Model test value, t = 2.9740 (above 2.0), Significant value, p = 0.0035 (Less than 0.05), and 

Confidence interval also lies in positive ranges and No Zero exist between interval. Hence; for every 1-

unit increase of Green construction, we get 0.4063-unit increase, and 1-unit increase of Sustainable 

development, we get 0.2098-unit increase in overall outcome value. Hypothesis III accepted. 

4.4 Role of Mediating variable: 

Role of Mediation analyzed through the indirect effect of Multiple Regression Model of Andrew Hayes 

and Preacher. Mediating variable presence indicate that overall strengthen or weaken the relationship. For 

Analysis Model 4, used and mediation role indicated by the Indirect path or effect from X to Y. Statistically 

result indicate as; confidence interval from positive boot strapping value interval as Zero falls outside the 

confidence interval, (.0021 and .0948) hence the relationship is Signification. Effect indicate the beta value 

which means, change of 1 unit of mediator (Sustainable Development) brings .0390-unit change in the 

relationship between IV (Green Construction) and DV (Organization Performance). Overall relationship 

has 0.4063 direct effect without mediation and 0.0390 indirect effect on outcome variable through the 

mediating variable. 

 

Table 9. Indirect effect of X on Y 

 Effect Boot SE BootLLCI BootULCI 

SD .0390 .0238 .0021 .0948 

Source – developed by the authors 

 

 



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Table 10. Direct effect of X on Y 

Effect SE T P LLCI ULCI 

.4063 .0634 6.4106 .0000 .2809 .5316 

Source – developed by the authors 

 

Table 11: Total Effect 

Effect SE T P LLCI ULCI 

.4453 .0638 6.9747 .0000 .3190 .5716 

Source – developed by the authors 

 

Table listed above, indicated the result of mediating variable which is sustainable development in our 

research study. From the results of analysis, overall, with the mediation the effect is .4453 within the 

significant level (p=0.000<0.05) and lies under positive confidence interval (Non zero). Total effect of 

direct path through linear regression (ANOVA) remains same from as through the multiple regression 

Hence, from the mediation test it is concluded that the mediating variable which in this study is 

sustainable development is affecting the relationship of Green construction and organizational 

performance to 8.75 % with (0.0390) per item change. Therefore, in the light of the observation we 

conclude that there is partial mediation exist between the model, Sustainable development practices 

partially mediate the impact of green construction on organizational performance. 

 

5. Discussion 

In this section, we relate our finding with the theoretical literature support. The current study tested the 

direct and indirect relationship between the green construction and organizational performance with 

mediating variable sustainable development practices. 

5.1 Green construction impact on organizational Performance. 

This study is supported by some of the previous researches which also contributed the same results 

toward the organizational development in the construction industry. Fahimnia, Sarkis, and Davarzani 

(2015), Green construction mainly divided into two parts green design and green operation which means 



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18 

planning and execution of green practices such as less production of waste and reuse of old material. The 

field which focus on the importance of corporate practices related to green construction focused on the 

preservation of natural resources, reuse and recycling of old building material. The adoption of such 

practices by the organization at corporate level help to reduce their expenses such as overheads and 

increase market share through the better business strategies with modern techniques. Green construction 

involves the review of project life cycle and analyze project phases and convert them in to less economical 

and less environment degradation factors such as reverse logistics and network design in planning phase 

which involve review of policies and change the strategies while in execution phase involve waste 

management such as less use of pollution sources and material which can easily recycled.  (Brunner & 

Rechberger, 2015) 

According to the Chakraborty (2010), green practices at corporate level are the major source of cost 

efficiency, profitability, market share, preservation of resources and less causes for rework during the 

construction which enhance the organization performance by developing new market opportunities with 

higher profit and good practices for others in industry. Statistical result of our research study also added 

in the favor of argument that adoption of green practices at construction industry bring positive 

consequences on the organizational performance. 

5.2 Green construction impact towards sustainable development 

Somehow green construction is the part of sustainable development while sustainable development is a 

vast field of knowledge and vary with respect to the working industry. Although it is a new emerging 

concept but it grows very rapidly in the construction sector in different country across the globe and bring 

significant results. (Pedersen, 2018) Sustainable development covers three main aspects as per the 

definition, preservation of natural resources, less cost consumptions resources and meet current demands 

without compromising future generation demands. In our study we focus on the environment and climate 

protection policy and result statistically indicate that green construction is helpful to protect the 

environment and climate protection while scientifically also sustainability techniques have been 

introduced across the globe which causes the less environment degradation. Adoption of that tools and 

techniques during the construction causes the less degradation such as the variation of material used for 

the construction i.e. fabrication, steel and many others. These materials not only save the cost, and time 

but also causes less degradation which is helpful to preserve the natural resources. Researchers including  



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(Sarkis & Zhu, 2018) indicate the role of less waste production through the green construction process 

which is the biggest relief in the environment protection. As construction industry is the major source of 

environment degradation and waste deposition is the emerging issue which is hard to control while new 

latest practices adopted during the green construction such as use of plywood which can easily reuse and 

recycle rather than the use of framework of natural wood which originated from the tree cutting. 

Researchers also indicate the other green practices such as the reuse of old building material in partition 

or low load bearing structure in the form of solid aggregate is quite helpful from the financial aspect. Our 

statistical research added in terms of green construction can bring significant positive changes in the 

sustainable development. 

5.3 Sustainable development impact on organizational development 

Sustainable development and environment protection is major emerging challenge for the world. 

Organizational have to deal with it during the project lifecycle and somehow their projects are the cause 

of this environment degradation due to lack of sustainable business practices. Researcher (Awadh, 2017) 

defined the concept of sustainable institute. World certified institute for green mark, known as Leadership 

in energy and environmental design (LEED) from USA, other institute of France emphasizes on their 

organization to develop and adopt green business strategies which based on the preservation of natural 

resources, long lasting and economical structure. On the other side organizations following the LEED 

standard are strictly bound to adopt and implement the sustainable practices in terms of less carbon 

production in environment which also lead to the heavy penalty. Other researcher including Song, Zhao, 

and Zeng (2017) report the significant changes and positive relationship between environment 

management and the financial performance of the manufacturing companies located in China. Research 

study found the significant evidence between green practices at corporate level and economical 

performances in electronic industries located in Taiwan. Implementation of sustainable practices is the 

responsibility of government stakeholder working at national and international project in terms of 

protection policies and penalties. Government and organizations designed the alternative parameters and 

result shows that adoption of green practices not only enhance productivity and causes less degradation 

but also built standards for other industry at national and international practices. Our research also 

strengthens the argument that adoption of sustainable development practices can bring positive change on 

organization performances. 



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5.4 Sustainable development relationship between green construction and organizational performance. 

Project quality mainly based on the project designing team at the initial phases while financial 

performance based on the execution phase mainly and both play important role in the overall organization 

and project performance. Green construction highly depends on the efficiency of the project designing 

team. As the sustainable development and green construction practices as well is the modern emerging 

concept and growing very rapidly, organization top management, and stakeholder must show their interest 

and update their business and HR development strategies towards the sustainable development. According 

to the Awadh (2017) there are various sustainable material introduces for the construction industry which 

use as the alternatives and their result show as the good practices for others industry, such as the steel 

structure which save the time, cost and overhead of the organization and also control the amount of rework.  

Organization working on the construction sector are the part of policy maker and agreed that long term 

degradation exerted in terms of usage of alternative resources such as HVAC system, and pre-fabricated 

structure instead of concrete structure which rises the temperature of earth. Researchers (Tariyan, 2016) 

indicated that adoption of green practices not only enhance productivity and causes less degradation but 

also built standards for other industry at national and international practices. Moreover, existing of 

sustainable development policy such as environment policy causes the better environment friendly green 

construction which also causes the organization to change their existing business strategies which 

ultimately enhance their productivity in terms of good practices, market share and project performances 

(Nilsson, Griggs, & Visbeck, 2016).  Result of our study also strengthen the argument that sustainable 

development positively mediates between the relationship of green construction and employee 

performance. 

 

6. Conclusion  

Finding of this study indicate that Green construction and organizational performance are associated 

with each other positively. There is positive relation exist between the factors of Green construction such 

as reuse and recycling of material and the factors of organizational performance such as the market share, 

and productivity. Moreover, research result also indicates that mediator which is sustainable development 

including environment protection policies partially mediate the relationship which means organization 

working in construction industry can enhanced their performance through the formalization and adoption 



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21 

of environment protection strategies during the construction projects. This research study filled the 

research gap about the sustainable development and green construction practices role in organizational 

performance. Research focus on the organizations working in construction industry on twin city projects 

since last two years which to develop the better understanding about the relationship between Green 

construction and organizational performance through the mediation of sustainable development.  

Research has managerial and theoretical implications in the field of construction industry. Green 

construction is the modern sustainable development and important for the organization to enhance its 

performance and meet international standards. Organization top management must change their business 

practices and adopt knowledge sharing technique to enhance employee performance. Moreover, this 

research gives a pleasant input toward s the enhancement of organizational performance Change in 

construction process and standards is a long-time consumption and huge dispersion of competitive 

conditions such as company capital, standards, and technology advancement. This study helps to develop 

the understanding about the impact of green construction on the organizational performance and as well 

as the adoption of sustainable development policies in organization business strategies.  

It has been proven from findings that there is ample room for further research. One possible attempt 

could be studying the dependent variable which steam performance as dependent variable. And further 

studying the impact of green construction on the organization performance. Basically, the analysis of the 

relationship between different can only be studied. Further carried out research in longitudinal concept 

with different region (location) and projects (residential or commercial). Increment in sample size and 

change in the sustainable development assessment factor such as economy may bring more significant 

changes in the mediating role. Research can also have carried out as per emerging concept of green 

marketing which mainly depend on the organization and consumer relationship in better environment. The 

study can also be conducted on the relationship between sustainable development practices and green 

construction where green construction can be considered as a dependent and sustainable development as 

Independent variable instead of a mediation variable, and an additional variable playing a moderating role, 

can also be introduced in the conducted study to broaden the scope of the research. Considering all of the 

possibilities that this area of research lacks, one could conclude that there is always still a lot to discover 

in the following field. 

This research study has certain limitations, there was a shortage of time to conduct this research study. 

The questionnaires survey was limited to the employees working in construction based organized located 



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in the twin cities of Rawalpindi and Islamabad. So, time consuming questionnaires would not have been 

affordable. Data was filled on the basis of their previous two-year projects. Secondly, the study has been 

only conducted on the basis of employee working with last two-year project. This again does not represent 

the whole part of the population targeted initially. 

Conflict of Interest: 

There is no conflict of interest 
Acknowledgement: 
Author express his gratitude and thanks to SZABIST for their supervision, technical support and guidance 
in this research. In addition, also thanks for providing partial institutional support. 
 
Funding: 
This research based on the academic point of view and receive no funding from any organization or 
institution.  

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



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Appendix A  

Table 12:  Items of Questionnaire  
In the last 2 years, the company has adopted the following practices in work execution 
Green Construction Reduce waste of materials in construction site 

Reusing materials on construction site 
Replacing, reducing or minimizing the use of toxic substances (eg paints and solvents) 
Actions to reduce liquid waste (e.g., leak containment or flushing with water) 
Reduce energy use at the construction site 
Actions to improve supply chain environmental efficiency (e.g. Cooperation to reduce packaging, 
economic transport, technological synergie) 

Please indicate the extent of your agreement/disagreement with the statements 
Sustainable 
Development 

When people interfere with the environment, they often produce disastrous consequences 
 Environmental protection and people’s quality of life are directly linked 
Biodiversity should be protected at the expense of industrial agricultural production 
Building development is less important than environmental protection 
Environmental protection is more important than industrial growth 

In the last 2 years, there was an improvement in company’s performance 
Organizational 
Performance 

Sales increase 
Market share increase 
Corporate image improvement 
Environmental performance improvement in related businesses or buildings regarding to the 
reduction of water consumption 
Environmental performance improvement in related businesses or buildings regarding to energy 
efficiency 
Environmental performance improvement in related businesses or buildings regarding to the use of 
materials 
Financial results improvement 
Revenue increase 
Reductions of risk of environmental legal penalties 
Improvement in company operation (e.g., building efficiency indicators) 

Source – developed by the authors 

 

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