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Do Sustainable Procurement Practices Improve Organizational Performance?

Author

Listed:
  • Md. Mazharul Islam

    () (Department of Finance, College of Business, King Abdulaziz University, Jeddah 21589, Saudi Arabia)

  • Abalala Turki

    () (Department of Economics, Faculty of Economics and Administration, King Abdulaziz University, Jeddah 21589, Saudi Arabia)

  • Md. Wahid Murad

    () (UniSA College, University of South Australia, Adelaide, SA 5001, Australia)

  • Azharul Karim

    () (Science and Engineering Faculty, Queensland University of Technology, Brisbane CBD, Brisbane, QLD 4001, Australia)

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.

Suggested Citation

  • Md. Mazharul Islam & Abalala Turki & Md. Wahid Murad & Azharul Karim, 2017. "Do Sustainable Procurement Practices Improve Organizational Performance?," Sustainability, MDPI, Open Access Journal, vol. 9(12), pages 1-17, December.
  • Handle: RePEc:gam:jsusta:v:9:y:2017:i:12:p:2281-:d:122716
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    References listed on IDEAS

    as
    1. Linda W.P. Ho & Nicholas M. Dickinson & Gilbert Y.S. Chan, 2010. "Green procurement in the Asian public sector and the Hong Kong private sector," Natural Resources Forum, Blackwell Publishing, vol. 34(1), pages 24-38, February.
    2. Samson, Danny & Ford, Steve, 2000. "Manufacturing practices and performance: Comparisons between Australia and New Zealand," International Journal of Production Economics, Elsevier, vol. 65(3), pages 243-255, May.
    3. Karim, M.A. & Smith, A.J.R. & Halgamuge, S.K. & Islam, M.M., 2008. "A comparative study of manufacturing practices and performance variables," International Journal of Production Economics, Elsevier, vol. 112(2), pages 841-859, April.
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    5. Edeltraud Guenther & Lilly Scheibe & Vera Greschner Farkavcová, 2010. "“The Hurdles Analysis” as an instrument for improving sustainable stewardship," Management Research Review, Emerald Group Publishing, vol. 33(4), pages 340-356, March.
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    7. Bulent Menguc & Seigyoung Auh & Lucie Ozanne, 2010. "The Interactive Effect of Internal and External Factors on a Proactive Environmental Strategy and its Influence on a Firm's Performance," Journal of Business Ethics, Springer, vol. 94(2), pages 279-298, June.
    8. da Cruz, Nuno Ferreira & Marques, Rui Cunha, 2014. "Revisiting the determinants of local government performance," Omega, Elsevier, vol. 44(C), pages 91-103.
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    More about this item

    Keywords

    sustainable procurement practices; organizational performance; private and public organizations; multivariate analysis; Saudi Arabia;

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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