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Do Sustainable Procurement Practices Improve Organizational Performance?

Md. Mazharul Islam (), Abalala Turki (), Md Murad () and Azharul Karim ()
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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
Azharul Karim: Science and Engineering Faculty, Queensland University of Technology, Brisbane CBD, Brisbane, QLD 4001, Australia

Sustainability, 2017, vol. 9, issue 12, 1-17

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.

Keywords: sustainable procurement practices; organizational performance; private and public organizations; multivariate analysis; Saudi Arabia (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:gam:jsusta:v:9:y:2017:i:12:p:2281-:d:122716