Purchasing realized absorptive capacity as the gateway to sustainable supply chain management

Purpose Companies' ability to build sustainable supply chains and achieve strategic sustainability objectives largely depends on their supply network characteristics and the nature of the relationships with strategic suppliers. This poses the question of how purchasing departments can help to translate this sustainability commitment into performance benefits. The authors focus the attention on buyer-supplier information sharing practices and study how the availability of information interplays with the purchasing realized absorptive capacity (PRAC) to positively impact performance (operational, environmental and social). Design/methodology/approach The study collected data from 305 procurement executives in four European countries and tested the hypotheses empirically using structural equation modeling. Mediation analysis is used to test the effect of PRAC on the relationship between buyer-supplier information sharing and performance. Findings The results show that increasing buyer-supplier information sharing is sufficient to obtain a positive impact on operational performance. To improve purchasing sustainability performance, companies need to develop their PRAC to adequately transform and exploit external information and identify opportunities in the environmental and social areas. Thanks to these purchasing capabilities, organizations can overcome potential trade-offs between different performance dimensions. Originality/value In the context of collaborative buyer-supplier relationships, this study is one of the first to propose purchasing knowledge management capabilities (i.e. PRAC) as a key factor to improve multiple performance dimensions. Additionally, it captures different sustainability aspects, concluding that organizations can improve purchasing operational, environmental and social performances by implementing appropriate information sharing mechanisms with suppliers and developing their PRAC.

Automated summary

This study focuses on the practices of buyer-supplier information sharing and the impact on performance. It finds that increasing information sharing can improve operational performance. However, to improve sustainability performance, companies need to develop their absorptive capacity to identify opportunities in the environmental and social areas. By doing so, organizations can overcome potential trade-offs between different performance dimensions.