Environmental Management Practices: The Mediating Role of Lean Management and the Moderating Role of Environmental Transformational Leadership in Organizational Performance

Environmental practices are now a strategic necessity as firms face accelerating regulatory, market, and societal pressures to operate sustainably. Yet evidence remains mixed on whether and how these practices translate into superior organizational performance in manufacturing. This study examines how environmental management practices improve organizational performance in the manufacturing sector and clarifies two unresolved issues in prior research: the relationship between environmental management practices (EMPs) and organizational performance (ORP). It further investigates the mediating role of lean management (LM) and the moderating role of environmental transformational leadership (ETL). This study used a quantitative method and cross-sectional data. A self-report questionnaire was used with 260 participating employees from all levels in the manufacturing sector in the Kingdom of Saudi Arabia (KSA). Structural equation modeling (SME) was employed to test the hypothesis. The results of this study showed that environmental management practices have significant and positive effects on organizational performance. In addition, this study revealed that lean management exhibited a significant positive impact on organizational performance and was a crucial element in the developed model. Nevertheless, environmental transformational leadership was not significant and did not support the relationship between environmental management practices and organizational performance. Theoretically, these findings advance the literature by (a) specifying lean management as a central mechanism that connects environmental practices to performance and (b) delineating boundary conditions by showing that environmental transformational leadership may not amplify these effects in this context. Practically, the results suggest that managers seeking performance gains from environmental initiatives should prioritize the systematic integration of lean management routines—such as waste reduction, process standardization, and continuous improvement—alongside environmental programs. Organizations should also evaluate leadership development efforts critically, because general transformational behaviors oriented toward environmental stewardship may be insufficient on their own to enhance the impact of environmental practices on performance.