Do Sustainable Procurement Practices Improve Organizational Performance?

Abstract

This exploratory study investigates the impacts of sustainable procurement (SP) practices on organizational performance by using the established scales of SP practices and organizational performances, taking Saudi Arabia as a case country. Data used in the study was collected through a questionnaire survey from procurement directors and managers. Regression and multivariate-based path analysis was performed to assess the impacts of SP practices. From the preliminary results, a significant association between combined SP practices and organizations' financial performance was found. A mediational analysis was conducted to discover the direct and indirect effects of SP practices on financial performance. There was no evidence of a significant direct impact of the summary measures of SP practices on financial performance, while the indirect impact of SP practices via organizational nonfinancial performance on financial performance was found to be statistically significant. This study contributes to SP practice literature by developing a conceptual model for the outcomes of SP practices and establishing statistically significant relationships between SP practices, organizational financial performance, and mediating factors.

The Effect of Procurement Practices on Service Delivery: A Case Study of VRA, Ghana

“…Islam, et al [52] assessed the impacts of sustainable procurement (SP) practices on organisational performance. The study found that, there is a positive relationship between sustainable procurement and service delivery.…”

Key factors hindering sustainable procurement in the Brazilian public sector: A Delphi study

“…Cronbach's alpha coefficient ranges from 0 to 1.00, where 1.00 indicates the highest level of validity and reliability of the quantitative inputs [43]. Previous studies suggest that alpha scores above 0.70 are considered acceptable and, since Cronbach's alpha value is above 0.886, the scale in this study is considered reliable and indicated that each item was unique and not a repetition [50], [60].…”

“…The authors of [49] stated that it 'involves the purchase of any product or service that results in a lesser environmental impact while performing a similar function (to comparable products or services) and while demonstrating social responsibility and ethics, at its comparable price to enhance competitive performance'. Despite the growing inclusion of sustainable criteria in the procurement processes [18], [50], and the broader attention received by researchers worldwide [21], in many cases, however, the focus was on only one of the three pillars [40], tending to favor the environmental dimension [51], thus dismantling the concept of SPP.…”

“…This is indispensable given the scale of PPs [8], [52], that allows the Government to employ its purchasing power to influence buyers and sellers [5], [16], [26], [37], [53] towards a more sustainable society. According to [50], some of the benefits provided by SPP practices are the transformation of markets, job creation, monetary economy, and protection of natural resources. Thereby, SPP is already recognized as a powerful agent of change [45] and a key mechanism to drive public policies [37], [52], enabling governments to 'reduce the negative aspects of production and consumption' [7].…”

Tendencies in contractual governance to promote human and labour rights in transnational supply chains

“…These include various fields of business administration and, primarily, supply chain management (e.g. Thorlaksona, de Zegherb and Lambin, 2018;Meehan and Bryde, 2011;Islam et al, 2017). Walker et al (2012) have documented the growing interest of management studies into sustainable procurement.…”