A Multi‐Theoretic Vendor Selection Mechanism for the Power Sector: Integrating Agility, Innovation, and Risk for Performance Optimization

This study develops and validates a multidimensional vendor selection mechanism (VSM) to examine how vendor‐related capabilities shape supply chain performance in the power sector. Drawing on dynamic capabilities view (DCV), resource orchestration theory (ROT), technology–organization–environment (TOE) framework, and social exchange theory (SET), the study conceptualizes vendor selection as a strategic organizational capability rather than a cost‐based procurement decision. Using survey data collected from 351 professionals in India's power sector, partial least squares structural equation modeling (PLS‐SEM) was employed to examine direct, mediating, and moderating relationships. The findings reveal that VSM significantly strengthens supply chain agility, innovation and technology integration, and risk mitigation, which in turn contribute to operational efficiency and cost optimization. Risk mitigation emerged as a particularly influential capability within the proposed framework, while technological readiness functioned primarily as an enabling organizational condition. The study contributes to knowledge and process management literature by repositioning vendor selection as a capability‐driven process through which organizations integrate supplier knowledge, coordinate inter‐organizational processes, and strengthen supply chain resilience. The findings also offer practical insights for developing resilient and technology‐enabled procurement systems in infrastructure‐intensive sectors.