Harnessing the value of procurement knowledge and practices for firm performance: A resource orchestration perspective

Abstract

AbstractAlthough the role of procurement knowledge and practices in securing a competitive advantage for firms cannot be over‐emphasised, the literature lacks empirical evidence in this regard. Accordingly, this study examines the effects of procurement knowledge and practices on firm performance as well as how procurement practices mediate the nexus between procurement knowledge and firm performance. Partial least squares structural equation modelling results based on survey data of 150 procurement and supply chain professionals suggest that procurement planning, supplier partnership, contract management and compliance increase firm performance. Also, a positive relationship was established between procurement knowledge and all procurement practices investigated. Furthermore, apart from procurement planning, the remaining procurement practices fully mediated the effect of procurement knowledge on firm performance. Findings provide relevant implications for theory and practice.