This paper aims to examines the moderating effect of small vs large supply base size on the relationship between strategic sustainable purchasing (SSP) and organizational sustainability performance (OSP). SSP is conceptualized as a dynamic capability consisting of strategic purchasing and environmental purchasing. Environmental collaboration is conceptualized as a mediator between SSP and OSP. Extant research has not examined the effect of the size of the supply base on the relationship between SSP and OSP.
The hypothesized relationships are tested using a two-step multi-group analysis in partial least squares-structural equation modeling (PLS-SEM).
A small supply base size positively moderates the relationship between SSP and environmental collaboration, thus achieving OSP. In contrast, when the supply base is large, strategic purchasing is positively associated with environmental collaboration, while environmental purchasing is negatively related to environmental collaboration. A large supply base has a positive relationship to environmental collaboration and economic sustainability, while the relationship between environmental collaboration and environmental and social performance is not significant.
This research argues that despite the nuances in the moderating effects of small versus large supply base size, managers need to invest in both dynamic and relational capabilities to achieve organizational sustainability.
Scant research is available in supply chain management research that has examined the important effect of the supply base size on the relationship between SSP and OSP. This research aims to fill this gap. The study helps practitioners understand the effects of supply base sizes for their organizations, increase interrelationships among suppliers, reduce the level of differentiation among them, and, thereby, reduce costs and increase revenues.
