The Impact of Green Procurement on Purchasing Performance: With Special Reference to the Apparel Manufacturing Industry in Sri Lanka

Abstract

This study will explore the impact of green procurement on purchasing by special reference to the apparel manufacturing industry in Sri Lanka. In order to achieve the above objective, the researcher developed three research questions, three research objectives and three hypotheses. Based on institutional theory and natural resource-based view theory, this study constructs a theoretical framework to clarify the mechanisms underlying the relationship between variables. Utilising a sample of two hundred and fifty-two Sri Lankan professionals from the large-scaled apparel manufacturing sector, a structural model is outlined and tested using structural equation modelling (SEM). The study results demonstrate that green procurement has a positive and significant impact on purchasing performance. Further the survey result recommended that the relationship between product-based green procurement and process-based green procurement on purchasing performance were positive and statistically significant. Consequently, organisations strive for achieve better purchasing performance should focus more on executing green procurement practices. These two kinds of procurement capabilities present two facets of firm’s practice on green procurement, which complements rather than substitutes each other. Organisations who strive to achieve better purchasing performance should focus more on executing green procurement practices. To achieve better purchasing performance, firms need to establish more green procurement practices to adapt to internal or external influences where firms need to establish more sustainable procurement practices with supply chain partners on mind. The study provides organisations a set of valid and reliable measurements for evaluating, benchmarking, and comparing purchasing performance at the point from raw material supplier within the supply chain. The measurements developed in this study can capture the different aspects of purchasing performance, thus not only enabling use by practitioners to identify the immediate outcomes of it, but also to understand its impacts on organisational performance.

Keywords: Product-based Green Procurement, Process-based Green Procurement, Purchasing Performance