The influence of corporate governance on strategic procurement and competitive advantage

Abstract

This research explores the influence of Corporate Governance on Strategic Procurement and Competitive Advantage. The study employs Structural Equation Modeling (SEM) to examine the direct and moderating effects of Strategic Procurement and Corporate Governance on Competitive Advantage. Data collected from firms highlights that Strategic Procurement significantly enhances Competitive Advantage (coefficient = 0.37, p-value = 0.00), and Corporate Governance has a strong positive effect on Competitive Advantage (coefficient = 0.62, p-value = 0.00). Additionally, the interaction between Strategic Procurement and Corporate Governance positively moderates this relationship (coefficient = 0.10, p-value = 0.04), indicating that effective Corporate Governance amplifies the impact of Strategic Procurement on Competitive Advantage. Descriptive statistics reveal that firms generally demonstrate high levels of engagement in Strategic Procurement and Corporate Governance, with variability in implementation across different firms. The findings underscore the importance of integrating robust governance practices with strategic procurement to enhance competitive positioning. The research recommends strengthening procurement practices, reinforcing Corporate Governance, and aligning both strategies to leverage their synergistic effects. This approach can address variability in practices and support sustained competitive advantage in a dynamic market environment.