Web-enabled direct procurement and competitive advantage: mediating effects of interorganisational management capability

Abstract

How does web-enabled direct procurement contribute to firms' competitive advantage in direct procurement? This study develops a conceptual model in which interorganisational management capability serves as a mediator for the relationship between web-enabled direct procurement and competitive direct procurement advantage. An empirical survey with a valid sample of 157 manufacturing firms was conducted to evaluate the research model. The results confirm that implementing web-enabled direct procurement is a crucial means of building competitive direct procurement advantage that can be leveraged to foster firms' two vital interorganisational management capabilities - relational governance capability and procurement administration capability, which can serve as a foundation for increasing the firms' competitive direct procurement advantage. For practitioners, this study suggest that relational governance and procurement administration capabilities are important enablers of competitive direct procurement advantage and firms should create the necessary conditions for implementing web-enabled direct procurement to improve the required management capabilities.