The Impact of Procurement Practices on the Organizational Performance in Small and Medium-Sized Enterprises (SMEs) in Services Sector in Johor Bahru, Malaysia

Procurement practices play a vital role in every organization that involves procurement of goods or services. It must be effectively managed and handled by organizations to accomplish high organizational performance, especially in services sectors of Small and Medium Enterprises (SMEs) as services sector is one of the major contributors which brings growth in Malaysia’s economy. Due to this, services sector should enhance their procurement practices with the objective of increasing their organizational performance. Hence, the main objective of this study is to examine the impact of procurement practices on the organizational performance of the services sector of SMEs, as well as to identify which dimension of procurement practices (procurement planning, supplier selection, buyer-supplier relationship, and e-procurement) impact most of the organizational performance of SMEs in Johor Bahru, Malaysia. To conduct the study, questionnaire is prepared and distributed to 60 respondents who work in procurement-related position in services sector of SMEs in Johor Bahru. Data was then collected and analyzed using PSPP software and SmartPLS software. The findings of the study allow organizations to gain knowledge and improve their procurement practices in order to achieve better organizational performance.