Purpose – The purpose of this paper is to contribute to the existing knowledge about the relationships between information technology (IT), lean manufacturing (LM), organizational environmental issues and business performance.

Design/methodology/approach – A questionnaire-based survey was conducted to collect data from 122 elite manufacturers, and the hypothesized relationships were tested using partial least squares structural equation modeling. Findings – IT competence in LM acts as a lower-order organizational capability, and its business value should be recognized through the intermediate roles of LM effectiveness and environmental management capability. Findings recommend that the net benefits of LM are mainly materialized through waste and pollution reduction and simplified implementation of proactive environmental practices.

Research limitations/implications – Among other limitations, relying on a rather small sample size and cross-sectional data of this research, and lack of generalizability of findings, tends to have certain limitations. An interesting direction for future research would be to extend this research by assessing interaction of other types of IT resources with LM and organizational environmental issues.

Practical implications – Both LM and proactive environmental management are information-intensive. Investment in both technological and human aspects of IT resource aimed at increasing the effectiveness of LM activities and proactive environmental practices is imperative for contemporary manufacturers.

Originality/value – This study introduces the IT capability of IT competence in LM and two organizational capabilities of LM effectiveness and environmental management capability. By doing so, the study highlights the significant role of organizational environmental issues in devising firms’ IT and advanced manufacturing technology investment strategies in LM context.