Heliyon (Feb 2024)
Unravelling the asymmetric effects of procurement practices on firm performance: A complexity theory approach to complementing fsQCA with NCA
Abstract
Current economic upheavals and supply chain uncertainty have threatened the profitability and sustainability of business organisations. Procurement has proved to be one of the strategies for enhancing firm performance without necessarily increasing revenue with its attendant increase in costs. However, rather than investigating the complex asymmetric relationship between procurement practices and firm performance (which this study advocates), past research engaged in a symmetric evaluation of the relationship between the phenomena. Accordingly, this study, using complexity theory, employs fsQCA and NCA on a sample of 150 respondents from private universities in Ghana to (a) identify different combinations of procurement practices, namely procurement planning, supplier partnership, contract management, and compliance, that lead to firm performance and (b) explore the necessity of these procurement practices (in kind and degree) for firm performance. Whereas the findings from fsQCA reveal three distinct combinations of procurement practices for high firm performance and further suggest that none of the procurement practices was necessary for firm performance, the NCA results suggest that two out of the four procurement practices investigated are necessary for firm performance and hence must be present in the causal recipes produced by fsQCA to guarantee that they lead to firm performance. The study offers pathways to firm performance through procurement practices and demonstrates how to complement fsQCA with NCA to ensure that causal recipes produced by fsQCA can produce the outcome.
