The Mediation Effect of Procurement Competence on the Relationship between Practices and Performance of the Public Sector Procurement in Tanzania using Higher-order Constructs in SmartPLS

Abstract

Nowadays, organizations are focusing more on operations improvement through proper management of their supply chains. Procurement management as part of supply chain management can play a significant role in operations improvement through better procurement performance. This study examined the determinants of public procurement performance. Based on the dynamic capability view together with empirical evidence from the literature a model with two pathways the direct and indirect path was developed. In the model, the extent of procurement practices was positively related to procurement performance through procurement competence. The study used cross-sectional survey data collected from a sample of 207 key informants from the public procurement sector in Tanzania. The results indicate significant positive effects for both direct and indirect paths of procurement practices to procurement performance. However, the indirect path effect through procurement competence was stronger than the direct path. Findings demonstrate the importance of procurement competence in improving procurement performance in the public sector organizations. Moreover, these results have theoretical, methodological, managerial and policy implications. The study adds to methodological applications of partial least square researches especially those involving higher order constructs. To practitioners, the study highlights procurement competence as a key factor that need to be considered to improve the performance of procurement management in organizations.

Keywords: Procurement Practices; Procurement Competence; Procurement Performance; Dynamic Capability; Higher-Order Constructs