THE IMPACT OF ADOPTING GREEN PROCUREMENT PRACTICES ON COMPETITIVENESS IN SMES.

Abstract

In the previous decade, green procurement practices have become increasingly important for the SMEs to adopt in this highly robust business environment. This paper is about green procurement practices as a new trend towards developing a more sustainable economy across the globe. Green procurement has started to being recognized as an efficient tool of minimalizing the adverse impact on the natural environment when it comes to the manufacturing of the items and their usage. In addition to this, the companies are also held accountable for their conduct, especially the SMEs that are plays a pivotal role in shaping the economy of a country. Which ultimately places specific pressures on the company to adopt green practices. This study investigates the impact of adopting green procurement practices upon competitiveness in SMEs. Although many researchers have discussed the role of GSCM known as Green Supply-Chain Management towards sustainability, the notion in context of green procurement practices is still underexplored. However, there are very few researchers who have discussed the adoption of green procurement practices that as well in context of large organizations or in developed countries. So, this paper aims to investigate the impact of adopting green procurement practices on the competitiveness of SMEs, especially in case of a developing country. To address this gap a hypothesized model is developed. Accordingly, a population of manufacturing SMEs operating in Pakistan are targeted among which 188 responses were received through purposive sampling. As CEOs, managers, assistant managers, and procurement managers are more informed about the status of their companies so they are selected as participants of the study. The Structural Equation Modelling (SEM) analysis was conducted on SmartPLS software. Based upon the results and findings customer pressure has significant influence on the adoption of green procurement practices, the AGPP has significant impact on supplier sustainable behavior and green innovation, AGPP alone have insignificant impact on competitiveness but with supplier sustainable behavior and green innovation it will ultimately have significant impact on competitiveness of SMEs. The suggestions and findings of the results will provide greater insight into the subject matter as well as guides on how managers can enhance the performance of their companies.