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.