A Dynamic Capability Framework for Sustainable Procurement Performance

Thesis Abstract

A dynamic capability framework is developed to enhance sustainable procurement performance in manufacturing supply chains facing volatile markets, resource constraints, and heightened regulatory and stakeholder expectations. The study addresses the persistent gap between strategic intentions for sustainability and observable procurement performance outcomes by integrating dynamic capabilities with sustainability-oriented procurement practices to explain how firms adapt, integrate, and reconfigure resources and routines in response to environmental changes. The aim is to articulate a theoretically grounded framework that links sensing, seizing, and reconfiguring capabilities to sustainable procurement outcomes, such as supplier diversity, lifecycle cost reductions, and environmental performance. Specific objectives are (1) to identify the dynamic capabilities most predictive of sustainable procurement performance; (2) to examine the mediating role of institutional pressures and organizational learning; (3) to assess the moderating effects of supply market complexity and firm absorptive capacity; (4) to develop and validate a measurement model for the proposed framework; and (5) to evaluate the framework’s applicability across manufacturing sectors in a mid-to-large economy. The research adopts a cross-sectional, multi-industry design, combining quantitative survey data with qualitative case insights to triangulate findings and enhance construct validity. A positivist-interpretive mixed-methods approach is employed. The population comprises procurement and supply chain managers in 180 large- and medium-sized manufacturing firms operating in an emerging market economy. A stratified random sample yields 270 valid responses for the quantitative phase, supplemented by 6 in-depth interviews with senior procurement executives and 2 focus groups with sustainability officers to contextualize results. Data collection instruments include a structured questionnaire measuring dynamic capabilities (sensing, seizing, reconfiguring), sustainability procurement practices, and performance metrics (environmental, social, and economic outcomes). The instrument’s validity is established through content validation with a panel of five procurement scholars and pilot testing (n=30). Reliability is evaluated using Cronbach’s alpha (target ?0.80) and composite reliability; convergent and discriminant validity are assessed via confirmatory factor analysis (CFA). Quantitative data are analyzed with structural equation modeling (SEM) to test the proposed causal relationships and mediating/moderating effects, using maximum likelihood estimation in AMOS. The model specification includes second-order factors for dynamic capabilities and a higher-order construct for sustainable procurement performance. Additional analyses employ hierarchical regression to probe moderation by market complexity and absorptive capacity. Qualitative data from interviews and focus groups are analyzed using thematic analysis, supported by NVivo, to identify patterns that explain the mechanisms by which capabilities translate into sustainable outcomes and to validate quantitative results. Anticipated findings indicate that sensing capability significantly influences seizing and reconfiguring, with a stronger direct effect of seizing on environmental and lifecycle-cost outcomes. Reconfiguration is expected to mediate the relationship between seizing and sustainable procurement performance. Institutional pressures and organizational learning are hypothesized to positively mediate the sensing-to-performance pathway, while supply market complexity dampens certain capability-outcome linkages unless moderated by high absorptive capacity. The study also anticipates cross-sector similarities in the core dynamics of dynamic capabilities, with sector-specific variations in the strength of relationships due to supplier ecosystems and regulatory rigor. Contributions to knowledge include (1) a theoretically integrated dynamic capability framework tailored to sustainable procurement performance, (2) validated measurement scales for dynamic procurement capabilities and sustainability outcomes, (3) empirical evidence on mechanisms linking organizational learning and institutional pressures to capability development, and (4) actionable insights for managers on how to build sensing, seizing, and reconfiguring routines to achieve measurable sustainability gains. The research concludes that dynamic capabilities are essential for translating sustainability ambitions into procurement performance. Recommendations emphasize investing in market intelligence systems, cross-functional teams for rapid decision-making, supplier development programs, and governance structures that institutionalize learning and adaptation to changing sustainability requirements. Policy implications discuss aligning procurement standards with environmental reporting and supplier diversity objectives to reinforce dynamic capability development across industries.