1. Introduction
Since the introduction of just-in-time (JIT) production, total quality management (TQM), and supply chain management (SCM), which were implemented to gain a competitive advantage after 1980, purchasing strategies that were previously considered within the realm of production have garnered heightened attention from management [
1]. The emergence of multinational corporations and globalization has emphasized the important role played by purchasing activities in corporate strategy [
2]. Consequently, apart from core competencies, all aspects of production are increasingly being delegated to specialized collaborative or supply partners, highlighting the establishment of a comprehensive purchasing process that encompasses the entire supply chain [
3,
4].
In line with this, various studies have been conducted on the purchasing strategies that are utilized within the supply chain [
1,
5,
6,
7]. In particular, research on supplier selection holds a significant position within the purchasing strategy of companies [
3,
8,
9,
10]. This is because a company’s purchasing strategy begins with their collaborative relationship with suppliers [
11,
12]. In other words, the selection of suppliers that meet the company’s criteria and the formation of long-term and strategic partnerships can be considered a competitive advantage that is not easily replicated by competitors [
2,
13,
14]. Thus, the establishment of more efficient and effective relationships with these collaborative partners is considered a key element in the success strategy of the supply chain [
13].
Meanwhile, both government intervention regarding the environmental issues that arise from corporate activities and the pressure exerted by stakeholders demanding corporate social responsibility significantly influence corporate strategies today [
15]. To survive and thrive in the global market, companies can no longer exclude environmental issues, which have rapidly emerged as a major global concern, from their strategic decision-making processes [
16,
17]. Particularly in markets such as Europe, where environmental issues are being seriously addressed at a national level, the adoption of voluntary environmental management is essential for exporting products to these markets or sustaining business relationships with companies therein [
18].
Today, a substantial literature stream confirms that the focus on adopting environmentally friendly practices has pivoted from the company level to the supply chain level [
19,
20,
21]. Accordingly, many scholars have studied environmental practices in the supply chain and purchasing strategy domain based on real-world cases. For example, Ref. [
22] highlighted the pivotal role of green supplier selection in pharmaceutical supply chains before and after the COVID-19 pandemic. Ref. [
1] provided another case study from China that exhibits the importance of integrating green supply chain principles in equipment manufacturing companies’ purchase strategy as a primary source to maintaining sustainability. Ref. [
23] indicated that, as the literature reported, approximately 80% of greenhouse gas (GHG) emissions result from suppliers’ practices in implementing supply chain activities. Therefore, suppliers’ environmental practices that reduce such damage have become one of the supplier evaluation and selection indicators.
However, many research gaps remain despite the large body of literature devoted to studying the environmental side of the supply chain, purchasing strategy, and supplier selection criteria. Most studies assume that supplier selection criteria will obtain the same importance level in all organizations and will accordingly be applied. These studies ignored the buying managers’ perception and purchasing firms’ performance effects on adopting those criteria or their importance, and few studies addressed this gap, such as [
24,
25,
26]. This led to scarce evidence concerning the effect of supplier selection criteria on a purchasing company’s performance [
27] and how each affects the other’s performance in the buyer–supplier relationship [
28]. Moreover, studies on the relationship between the performance of the supplier and manufacturing firm in relation to the supplier selection criteria have yielded ambiguous results, and they focused on financial performance [
3,
29,
30]. In addition, research on comprehensive supplier selection, which integrates the environmental factors recognized as essential elements in today’s corporate strategies and traditional supplier selection factors, such as quality, price, or flexibility, has been largely lacking [
31].
Furthermore, many recent studies have concentrated on developing models for green suppliers’ evaluation and selection using mathematical, statistical, laboratory, and multi-criteria decision-making models [
22,
23,
32,
33,
34,
35,
36,
37,
38]. Despite their importance, none of these studies have yet to go beyond the selection stage. In other words, these studies are limited to developing supplier selection models without considering the supplier’s ability to meet these criteria, making these models useless. Additionally, these studies have inconsistent results due to the differences in weights given to each criterion. Most also depend on simulation without real-world evidence and neglect the interaction relationships between criteria and sub-criteria. Additionally, their results must be validated and compared with those from other studies using different techniques.
Finally, the large body of prior studies has focused on developed economies. Hence, there is a considerable knowledge gap concerning the incorporation and effectiveness of green supplier selection with traditional selection criteria in developing economies [
3] such as Jordan.
Based on the research gaps identified in prior literature, this study raises the following research questions:
Is the selected supplier actually capable of meeting the purchasing firm’s requirements, which are reflected in the pre-well-identified selection criteria based on which it was selected?
Are there differences between purchasing firms’ corporate performance levels resulting from actual suppliers’ performance levels in fulfilling the pre-identified selection criteria?
Do the supplier selection criteria affect the purchasing firm’s overall corporate performance?
This study conducted an in-depth empirical analysis of the supplier’s traditional and green selection criteria, as perceived by purchasing managers of manufacturing firms in Jordan, and whether those criteria affect the buying firm’s performance. Such analysis helps fill the existing literature’s knowledge gaps by providing comprehensive supplier selection criteria that combine traditional and green ones, reconciling the contradictory results of prior studies, offering an in-depth understanding of interactions between selection criteria and buyer performance, and validating the results of previous studies based on real-world evidence. Therefore, this study contributes valuable insights into the existing literature and advances the extent of the existing body of knowledge on traditional and green criteria of supplier selection and the effects of those criteria on buyer performance in the context of business from a strategic purchasing management perspective.
In the remainder of this paper,
Section 2 reviews the relevant literature, while
Section 3 presents the conceptual research models and hypotheses. Subsequently,
Section 4 gives the results of the empirical analysis, and finally,
Section 5 presents the conclusions drawn from the research.
3. Research Methodology
3.1. Method and Procedures
This study adopted a mixed approach, quantitative and qualitative. To examine the measurement validity and reliability, describe the respondents’ characteristics, and test the hypothesis, the factor analysis, frequencies, independent sample t-test, and multiple regression analyses were used, utilizing SPSS version 23.0. The study was conducted in Jordan, and data collection utilized an online survey sent via email supplemented by site visits. Data were obtained in the 4th quarter of 2023. The research participants were informed of the study objectives and notified that their identities were confidential. The resulting consent is in line with the research’s ethical considerations.
3.2. Development of Measurement Tools
Through a careful review of previous literature, it is clear that researchers agree that the criteria for selecting suppliers that significantly affect their performance and, thus, the companies’ decision to purchase from them are price (cost), quality, delivery, technological capability, flexibility, relationship, financial issues, and environmental aspects related to green practices. Accordingly, these criteria were chosen as dimensions for selecting suppliers in this study, and the following explains each.
- (1)
Price (Cost)
Traditionally, manufacturing firms consider price to be a significant factor in supplier selection [
2,
40,
41]. In particular, Ref. [
61] asserted that in cases where multiple suppliers are contracted for short-term agreements, price is deemed the most important criterion in supplier selection. Ref. [
62] also presented research findings from Tanzania indicating that purchasing firms who prefer multiple sources prioritize price more than those who favor single sources. Moreover, the findings assert that less price enables purchasing firms to reduce cost, and as a result, their performance enhanced.
- (2)
Quality
Ref. [
63] mentioned that quality is the most important factor among the supplier selection criteria, with similar results being presented by [
64] in review papers on supplier selection. Ref. [
65] compared supplier selection criteria based on the size of the enterprise and mention that both large and small businesses prioritize quality the most. Additionally, Ref. [
58] found that all entities in most industries consider quality, on-time delivery, and consistency to be the most important criteria for their supply chain.
- (3)
Delivery
Many researchers have emphasized the importance of delivery time. Ref. [
66] concluded that in the pharmaceutical industry, quality and delivery time are the most critical criteria considered during supplier selection, despite the differences between the countries studied. Ref. [
67] also mentioned that along with quality, the delivery time contributes greatly to customer satisfaction and represents a crucial competitive advantage; in addition, there is a particular emphasis on the lead time among the delivery-related factors.
- (4)
Technological Capability
Technological capability has also been widely recognized as a key criterion in supplier selection across many studies [
68,
69]. Ref. [
70] found that larger enterprises prioritize the suppliers’ technological capabilities more than smaller ones, indicating that larger firms rely more on their suppliers’ technological innovation and their participation in design.
- (5)
Flexibility
Ref. [
71] emphasized the importance of flexibility in their research. However, Ref. [
72] analyzed various supplier selection criteria, including price, quality, and delivery, and found that flexibility in response to order changes was rated as less important. This may be attributed to their study’s focus on metal fabrication manufacturers dealing with small machinery, indicating that criteria such as flexibility in supplier selection are greatly influenced by the characteristics of the industry. Therefore, analyzing such criteria is deemed necessary, given their substantial impact compared with other criteria.
- (6)
Relationship
Ref. [
73] argued that long-term relationships characterized by trust and cooperation should be established. Ref. [
74] also emphasized the importance of communication with suppliers, particularly two-way communication. They suggested that by engaging in bidirectional communication, purchasing firms can not only provide feedback to suppliers but also improve the efficiency of the supply chain through these suppliers.
- (7)
Financial
While research using financial factors as criteria for supplier selection is relatively limited, the importance of such factors continues to grow. Ref. [
75] emphasized that the financial stability of suppliers is essential to the establishment of long-term partnerships. Additionally, Ref. [
76] mentioned that the financial status of the supplier provides reliability for the establishment of long-term contracts with purchasing firms.
- (8)
Environmental (Green)
Since the increased government intervention and stakeholders’ pressures concerning environmental issues, there has been an explosion of research that has considered ecological factors; this has been due to the tightening of environmental regulations for businesses. Ref. [
77] presented several criteria for measuring suppliers’ environmental performance using the Delphi technique. Ref. [
13] divided environmental criteria into quantitative and qualitative factors and provided recommendations. Ref. [
42] assert that possible suppliers who adopt environmentally friendliness practices achieve high sustainability performance levels and have a higher chance of being chosen as actual vendors.
Table 1 presents the items used in this study to measure the above criteria or dimensions with references, while
Table 2 displays the items used to measure business performance.
3.3. Data Collection
In this study, we conducted a survey (
Appendix A) targeting purchasing managers working in domestic technology-intensive industries. We assessed supplier selection criteria using the dimensions mentioned above. Precisely, cost (price) was assessed using a 3-item scale developed based on the studies of [
78,
79,
80]. Sample items include “We make our decision to purchase our supplies based on competitive pricing provided by suppliers” and “We make our decision to purchase our supplies based on attractive credit terms offered by suppliers”. Quality was measured using a 4-item scale adapted from the work of [
65,
81,
82,
83]. Sample items include “We make our decision to purchase our supplies based on supplier’s capacity for continuous quality improvement” and “We make our decision to purchase our supplies based on supplier’s consistency in quality level”. Flexibility was evaluated using a 4-item scale established in the research of [
72,
87]. Sample items include “We make our decision to purchase our supplies based on supplier’s immediate response to requirements” and “We make our decision to purchase our supplies based on the short supply lead time of the supplier”. The relationship was measured using a 5-item scale introduced by [
73,
74]. Sample items include “We make our decision to purchase our supplies based on the degree of intimacy with the supplier” and “We make our decision to purchase our supplies based on supplier’s reputation for honesty and integrity”. Technological capability was assessed using a 3-item scale identified by [
70,
85,
86]. Sample items include “We make our decision to purchase our supplies based on the supplier’s technical expertise in product manufacturing” and “We make our decision to purchase our supplies based on the product innovation capabilities of the supplier”. Delivery was measured using a 4-item scale adapted from the work of [
67,
84]. Sample items include “We make our decision to purchase our supplies based on the supplier’s ability to deliver on time” and “We make our decision to purchase our supplies based on the supplier’s ability to comply with order quantities”. Finance was evaluated using a 4-item scale developed by [
75,
76]. Sample items include “We make our decision to purchase our supplies based on the supplier’s financial status regarding assets and liabilities” and “We make our decision to purchase our supplies based on the disclosure of financial records by the supplier”. Green or environmentally friendless practices were evaluated using a 4-item scale adapted from the research of [
13,
77]. Sample items include “We make our decision to purchase our supplies based on the certification of environmental management obtained by the supplier” and “We make our decision to purchase our supplies based on the supplier’s implementation of environmentally friendly packaging for products”. Business performance was measured using a 4-item scale developed by [
26]. Sample items include “Our profitability increased over the last two years” and “Our sales growth rate increased over the last two years”.
Respondents rated their agreement for all the above scales on “a 5-point Likert scale (1 = strongly disagree, 5 = strongly agree)”.
The survey was conducted via email and direct visits. Out of the 82 questionnaires collected, those with responses that were insincere, extreme outliers, or unrelated to the scope of this study were excluded; this totaled 10 responses. The remaining 72 questionnaires were used for the empirical analysis.
The possibility of bias exists in both convenience sampling and random sampling methods (email) [
88]. To enhance the reliability of the sample used in this study, an independent sample
t-test was conducted to analyze the differences in the means of the 24 questionnaires obtained through random sampling and the 48 questionnaires obtained through convenience sampling. Upon examining the analysis results presented in
Table 3, no significant differences in the mean were observed across all items used in this study. Therefore, it can be reasonably concluded that there was no inherent bias, and it was feasible to consider the two groups, which exhibited conceptually distinct characteristics, as a single group.
5. Discussion
This study explored whether purchasing firms’ supplier selection criteria differ in importance and whether supplier performance on each criterion differs. Moreover, it investigated whether the differences in buying firms’ performance occur due to the suppliers’ ability to satisfy these criteria and whether these criteria can affect purchasing firm performance. To find answers to the study questions, comprehensive supplier selection criteria in the supply chain that combine environmental issues and traditional criteria such as quality, relationship with suppliers, flexibility, price, delivery, and financial capabilities have been investigated. This study also conducted an in-depth empirical analysis to detect whether the purchasing firms’ performance is affected by those criteria. The sample examined in this study primarily consisted of purchasing professionals working within technology-intensive industries in Jordan.
The statistical analysis revealed that the suppliers’ performance ratings in the quality, flexibility, price, and delivery criteria are less than the purchasing firms’ ratings for the importance of these criteria. Hence, the differences between the performance and importance of a particular selection criterion suggest that the supplier cannot meet buying firm requirements reflected in that criterion. One interpretation of this result is that the supplier is unable to appreciate the importance of criteria determining the purchasing decision [
26]. Another interpretation is that high uncertainty and competitive pressures may affect suppliers’ abilities to meet buyers’ requirements [
91]. Furthermore, the risk of disasters and crises negatively affects suppliers’ performance within the supply chain [
22]. From the purchasing firm’s side, supplier selection is affected by managers’ perceptions and behaviors; some of them pay less attention to supplier selection, while others give full consideration. Additionally, the ability of purchasing firms to communicate precise specifications and details regarding quantity, quality, and delivery times to suppliers plays a vital role in suppliers’ performance [
92]. However, this result is consistent with prior studies conducted by [
3,
55,
56].
The analysis results also demonstrate that purchasing firms’ performance differs due to suppliers’ poor performance in green practices, quality, price, and delivery. When suppliers’ performance was high in the above criteria, the purchasing firms’ performance was high; in contrast, when suppliers exhibited poor performance on those criteria, the purchasing firms’ performance was low. This result aligns with previous studies, e.g., [
24,
25,
26]. Many studies assert that green practices maintain purchasing firms’ sustainable performance [
27,
42], while quality is linked directly with customer satisfaction [
58,
63]. Regarding price and delivery, they are related to purchasing firms’ margin profit and responsiveness [
66,
71]. Therefore, any failures in those facets will have a visible effect on purchasing firms’ performance.
Finally, the analysis results indicate that green practices, flexibility, price, and delivery have a significant statistical positive relationship with the purchasing firms’ corporate performance. Green practices reduce costs by saving energy, improving waste management, and reducing accidents [
93]. Moreover, green practices improve efficiency linked to production, inventory, and responsiveness [
94]. These practices also enhance the purchasing company’s image and reputation [
95], ultimately improving overall performance. Additionally, suppliers’ flexibility enables purchasing firms to continue their operations, especially during crises and disruptions. This leads to maintaining customer satisfaction, protecting marketing share, and improving profitability and competitive edge [
71,
72,
96]. Additionally, suppliers’ prices of materials or components directly influence a buying firm’s profitability, competitiveness, and overall organizational success [
59,
62,
69]. Furthermore, suppliers’ failure to deliver the supplied goods or services on time increases buying firms’ costs, leads to customer loss, and disrupts the supply chain [
66]. Hence, suppliers’ obey delivery times visibly improve purchasing firms’ performance [
67,
71]. However, no conclusive deductions have been drawn concerning the effects of green practices, flexibility, price, and delivery on buying firms’ performance. The contradiction in previous studies’ findings [
27,
41,
50,
58,
59,
97] prevents managers or scholars from agreeing on which supplier selection criteria affect performance.
5.1. Theoretical Contributions and Implications
This study contributes to the literature in several significant ways. First, we study perception-based supplier selection criteria ingrained in the buyer–supplier relationship setting that arise from buying managers’ perceptions and their implications for supplier selection practices related to performance, largely overlooked in previous studies that developed suppliers’ selection models in isolation of purchasing firms’ perception [
36,
37,
38]. Second, this study responds to recent cries to further assess the relationship between the performance of the supplier and manufacturing firm regarding the supplier selection criteria to validate the results of previous studies that yielded ambiguous results [
30,
54,
58,
98,
99]. Third, the present study integrates the ecological factors, largely overlooked in the supplier selection research stream [
1,
2,
31,
40], with the traditional supplier selection criteria, providing a comprehensive understanding of the supplier selection process. With various industries and companies worldwide heavily adopting green practices, the valuable relevance of this research is undeniable. However, the effects of these eco-friendly practices on buying companies’ performance remain a topic of global interest and controversy, with findings ranging from affirmative [
100] to adverse or insignificant [
27,
97], which makes this topic fertile for future research. Fourth, the present study findings help us understand the reason behind the contradictory findings presented by previous studies, as the importance of the suppliers’ selection criterion differs from one company to another and from one industry to another, and supplier capabilities to meet each criterion are different [
1,
49,
53,
66]. This stimulates future research to consider which indicators to include and how by which weights are given to enhance generalizing the results. Fifth, this study overcame the issue raised in previous studies [
22,
23,
34] regarding the interaction relationship between criteria and sub-criteria in supplier selection by using factor analysis and multiple regression, contributing to validating the results of earlier studies. This suggests that future research studies that employ new statistical techniques to overcome such issues become imperative. Finally, this study used financial and non-financial measures to evaluate the purchasing firm’s performance, which substantially contributes to the literature. For instance, it demonstrated how supplier selection criteria affect purchasing firms’ customer satisfaction, as previous studies have limited their analysis to financial performance [
3,
29,
30]. This stresses the need for further studies due to scarce evidence regarding the influence of supplier selection criteria on purchasing firms’ comprehensive performance.
5.2. Practical Implications
The study results provide practical implications for purchasing firms, as the purchasing managers who were surveyed in this study showed that the suppliers could not fulfill the buying firm’s quality, flexibility, price, and delivery requirements. Thus, purchasing firms should monitor their supplier performance for each criterion. Additionally, buying firms should evaluate suppliers based on their historical performance. Those who exhibited a low commitment to meet each criterion should be excluded. Additionally, purchasing firms must assess the risk affecting the supplier’s capability to meet pre-defined criteria and exclude high-risk suppliers. Purchasing firms also need to enhance supplier capabilities to meet each criterion requirement by adopting supplier development strategies and programs, and this could include training. Otherwise, managers should develop a switching strategy to change suppliers with poor performance. Another significant practical implication is that engaging suppliers when developing supplier selection criteria could raise their awareness regarding the priority and importance of each criterion.
Additionally, this study provides practical implications for suppliers. The findings revealed that a high supplier performance level in green practices, quality, price, and delivery is linked with high-performing purchasing firms. In contrast, poor supplier performance was related to low-performing purchasing firms. Hence, suppliers in technology-intensive industries must effectively adopt and implement green practices and commit to the quality level, price, and delivery required by purchasing firms to have a high selection potential. Green practices could include environmentally friendly packaging, environmental assessment, and environmental management programs.
The results also suggest that purchasing firms can enhance their financial and non-financial performance, such as profitability, sales growth rate, market share, and overall customer satisfaction, by selecting suppliers with high commitment levels to green practices, flexibility, price, and delivery. For instance, they should choose suppliers that implement biodegradable, recycled, or renewable materials, use clean technologies, and push eco-innovation, as these practices improve environmental performance, cut costs, and enhance a purchasing company’s reputation. This sheds light on the crucial role of suppliers in sustaining the purchasing firms’ performance in different aspects, such as economic, environmental, and social performance. Regarding price, delivery, and flexibility, if different cost aspects, such as the material price, costs related to transportation and inventory, and other hidden costs, are well-balanced and aligned with the quality level and suppliers’ resilience and delivery capabilities are high, purchasing firms’ performance will substantially improve.
6. Conclusions
Firms’ success in selecting suitable suppliers is crucial to improving performance and establishing a competitive edge. The firms’ purchasing decisions to select suppliers have generally been based on traditional criteria, such as price, quality, delivery time, and technological capabilities. Nevertheless, relying solely on conventional criteria may yield only short-term results. To guarantee long-term sustainable growth in today’s business context, firms should realize that ecological issues have become a crucial strategic imperative in purchasing and supplier management. This shift in focus forces buying firms to adopt a more holistic approach to selecting suppliers by incorporating suppliers’ green practices into traditional selection criteria to keep up with the evolving strategic landscape. This study examined comprehensive supplier selection criteria combining traditional ones such as quality, flexibility, price, delivery, and green practices and their effects on buying firms’ performance. An empirical analysis was conducted to verify if there is a significant difference between the importance of the supplier selection criteria, as perceived by the purchasing firms, and the actual performance of the suppliers, as perceived by the purchasing firms, as well as if there is a significant difference in the perceived performance level of actual suppliers between purchasing firms that show high and low levels of corporate performance, and if there is a significant positive correlation between the performance level of actual suppliers that is perceived by purchasing firms regarding supplier selection criteria and the overall corporate performance of the purchasing firms in order to provide an in-depth analysis of the relationship between manufacturers and suppliers by targeting purchasing professionals who were currently working in the high-technology industry in Jordan. The analysis results indicate that each supplier selection criterion differs from one company to another, and suppliers’ capability to meet each criterion requirement varies. In high-performing purchasing firms, suppliers exhibited high performance in meeting selection criteria. In contrast, poor supplier performance was observed in low-performing purchasing firms.
The empirical analysis also revealed that green practices, flexibility, price, and delivery notably affect the purchasing firms’ desired financial and non-financial performance, ultimately affecting their purchasing decisions. This study bridged notable gaps in most studies that relied solely on the financial performance measures and simulation for developing supplier selection models from developed economies in isolation of purchasing firms’ perceptions. Drawing on study results, valuable insights were provided for theory and practice.
Despite the significance of this study, which highlights the influence of a supplier performance that features environmentally friendly factors and meets quality, flexibility, price, and delivery requirements on the purchasing decisions of manufacturing firms, it possessed certain limitations. First, the method used to collect the survey data of the purchasing managers employed a mix of convenience sampling and random sampling methods; here, the convenience sampling method may have introduced bias. Therefore, to address this bias, future research should consider employing a completely random sampling method. Second, the sample for the survey was restricted to professionals from technology-intensive industries, such as electrical/electronic and precision machinery/equipment, suggesting that future studies should use diverse samples that represent the entire manufacturing sector. Additionally, given that the scope of green supply chain management (GSCM) has expanded beyond manufacturing to include service industries, further research targeting various industrial sectors is warranted. Lastly, considering the rapid evolution of environmental awareness and technology, future research should not only rely on cross-sectional data but also incorporate time series data for additional insights.