A Dynamic Capability Framework for Sustainable Procurement Performance

Thesis Abstract

This study investigates how dynamic capabilities underpin sustainable procurement performance in large manufacturing firms operating in volatile markets, addressing the persistent gap between theoretical dynamic capabilities and tangible procurement outcomes. The aim is to develop and validate a dynamic capability framework that links sensing, seizing, and reconfiguring capabilities to sustainable procurement performance (SPP), integrating environmental, social, and economic dimensions. Specific objectives are (1) to identify the key dynamic capabilities enabling sustainable procurement; (2) to examine how external contextual factors (market volatility, regulatory pressures) moderate the capability–performance relationship; (3) to quantify the direct and indirect effects of sensing, seizing, and reconfiguring on SPP; and (4) to develop a parsimonious, integrative model with diagnostic indicators for managerial use. The theoretical foundation combines Teece’s dynamic capabilities theory with the resource-based view and stakeholder theory to capture the interaction between organizational adaptation, resource orchestration, and stakeholder value in procurement, complemented by absorptive capacity theory to explain learning processes. A mixed-methods design is employed. The quantitative phase uses a cross-sectional survey administered to procurement and supply chain managers in 210 manufacturing plants within Southeast Asia, achieving a usable response rate close to 83% (n = 175). Constructs are measured with validated scales for sensing (market scanning, competitor intelligence), seizing (opportunity evaluation, strategic partnership formation), reconfiguring (process redesign, supplier base diversification), and SPP (environmental impact, social responsibility, total cost of ownership). Structural equation modelling (SEM) with partial least squares (PLS-SEM) is used to test the direct and mediated effects, and multi-group analysis examines moderation by perceived market volatility and regulatory intensity. Complementary qualitative data are collected through 20 in-depth interviews with senior procurement leaders to corroborate and enrich the quantitative findings, analyzed via thematic analysis to identify patterns and contextual nuances. Triangulation enhances construct validity and offers insights into causal mechanisms. The anticipated findings indicate that sensing and reconfiguring capabilities exert stronger direct effects on SPP than seizing, with significant indirect effects mediated by agile supplier collaboration and eco-efficient process innovations. The moderating role of market volatility is expected to amplify the importance of reconfiguring capability, while regulatory intensity strengthens the link between sensing and sustainable supplier selection. The study is likely to reveal a contingent framework wherein organizational learning and digital procurement capabilities (e-procurement, data analytics, and supply chain visibility) reinforce dynamic capabilities, enabling sustainable value creation across environmental, social, and economic dimensions. The contribution to knowledge is threefold. First, it offers a theoretically integrated dynamic capability framework tailored to sustainable procurement, empirically distinguishing the relative importance of sensing, seizing, and reconfiguring in achieving SPP. Second, it provides a validated measurement model and diagnostic indicators for practitioners to assess and develop procurement capabilities in pursuit of sustainability goals. Third, it advances the literature on context–capability interactions by demonstrating how external volatility and regulatory context shape the performance outcomes of dynamic capabilities in procurement. Methodologically, the study advances mixed-methods research in supply chain management by combining PLS-SEM with qualitative thematic analysis to capture both causal relationships and rich contextual explanations. The main conclusion posits that a dynamic capability approach, when operationalized through integrated sensing, agile seizing, and proactive reconfiguring—supported by digital tools and stakeholder-oriented governance—substantially enhances sustainable procurement performance under conditions of market volatility and stringent regulations. Practical recommendations include (1) investing in market intelligence and supplier co-innovation to strengthen sensing; (2) developing flexible sourcing strategies and robust supplier development programs to improve seizing; (3) implementing process redesign and supply base diversification to fortify reconfiguring; and (4) embedding performance dashboards that track environmental and social outcomes alongside cost performance. The study suggests avenues for future research, such as longitudinal designs to capture capability evolution, cross-industry comparisons, and investigations into the role of ambient governance mechanisms in sustaining SPP.