Sustainable Procurement : Comparing In-House and Outsourcing Implementation Modes

Sayed, Maysara and Hendry, Linda and Bell, Marta (2021) Sustainable Procurement : Comparing In-House and Outsourcing Implementation Modes. Production Planning and Control, 32 (2). pp. 145-168. ISSN 0953-7287

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Abstract

Sustainable supply chain management practices can be particularly difficult to implement when the responsibility for sustainable procurement (SP) rests with buyers employed by a contractor, rather than an in-house procurement team. Yet there is no extant research that investigates the effect of outsourcing on SP. To address this research gap, this paper uses multi-case study data to explore the impact of outsourcing versus in-house implementation modes in the pursuit of SP. The findings suggest that each implementation mode has distinctive challenges and facilitators. However, by considering Transaction Cost Economics, results reveal that the advantage of outsourcing to professionals, with well-established SP expertise, brings information asymmetries in developing initial outsourcing contracts, which can lead to poorer sustainability performance than initially expected. Furthermore, when applying Principal Agency Theory, results suggest that sustainable performance can be improved in the long term through the effective design of well-constructed contractual relationships as SP maturity increases.