Baier The Alignment Performance Link in Purchasing and Supply Management

Performance Implications of Fit between Business Strategy, Purchasing Strategy, and Purchasing Practices
1. Auflage 2008
ISBN: 978-3-8349-9751-7
Verlag: Betriebswirtschaftlicher Verlag Gabler
Format: PDF
Kopierschutz: 1 - PDF Watermark

E-Book, Englisch, 231 Seiten, Web PDF

Reihe: Business and Economics

Purchasing and supply management (PSM) has developed into a discipline of major strategic importance for effectively competing in today’s global marketplace. To leverage PSM’s strategic value creation potential, the decisions and activities of the purchasing function must be aligned with the firm’s overall strategic orientation. Despite general agreement on this matter, research and practice lack knowledge on how exactly such an alignment can be achieved and what performance implications it has.

Christian Baier empirically investigates the alignment performance link in PSM. Drawing on the market-based view, resource-based view, principal agent theory, and contingency theory, the author suggests that the relative fit among a firm’s business strategy, its purchasing competitive priorities, and its purchasing practices is key to achieving superior business performance. Results from profile deviation and hierarchical regression analysis of data collected globally from 141 chief purchasing officers in firms with revenues greater than USD 3 billions present strong empirical support for this hypothesis. Baier’s findings provide clear guidance to practitioners on how to design their purchasing strategies and practices to achieve maximum alignment and thus effectively contribute to the firm’s competitive advantage.

Zielgruppe

Research

Autoren/Hrsg.

Baier, Christian

Inhaltsverzeichnis

Problem situation and research approach.- A theoretical perspective on the contribution of PSM to the generation of competitive advantage.- A conceptual model of the alignment-performance link in PSM.- An empirical analysis of the alignment-performance link in PSM.- Summary and conclusions.

Leseproben

3 A conceptual model of the alignment-performance link in PSM (S. 51-52)

The previous chapter outlined that PSM’s ability to contribute to competitive advantage critically depends on the alignment of purchasing strategy and practices with the firm’s business strategy. Given the lack of research on this topic, this chapter will now develop a model for empirically investigating the alignment-performance link in PSM. First, the conceptual model including detailed hypotheses regarding interrelationships between different strategy levels and their performance implications will be derived in section 3.1. Next, the key constructs used in this model will be defined in section 3.2. Last, an analytical approach for testing the model will be presented in section 3.3.

3.1 Development of hypotheses model

The development of a research model of the alignment-performance link in PSM must start with the identification of the key elements to be employed. Because the previous chapter highlighted the need for an alignment of different strategy levels, these levels will be discussed first in order to establish a sound basis for the model. Next, by applying insights from the theory of production competence, the strategy hierarchy will be adapted to the context of PSM. Based on the resulting conceptual model, detailed hypotheses on the links between the different strategy levels and their performance implications will then be developed in the last part of this section.

3.1.1 The strategy hierarchy as the foundation for a conceptual model of the alignment-performance link in PSM

The theory-based discussion in the last chapter showed that different strategy formulation and implementation levels have to be addressed and aligned if PSM wants to effectively contribute to the company’s competitive advantage. In order to obtain an understanding of this strategy hierarchy in the firm and thus to establish a sound basis for the development of the conceptual model of the alignment-performance link in PSM, relevant contributions from strategic management literature will first be presented. Because the term ‘strategy’ is used in a variety of ways in literature, such discussion must start by outlining the connotations of this broad concept in greater detail.

The word ‘strategy’, which derives from the ancient Greek military term ‘strategos’, connoting the art of the general (Galbraith & Kazanjian, 1987, p. 3, Hayes & Wheelwright, 1984, p. 27), has been used extensively in the past decades. It has taken on a variety of broad, ill-defined, and ambiguous definitions covering such different aspects as establishing purpose, setting direction, developing plans, taking major actions, securing distinctive advantage, deploying resources, and ensuring internal consistency (Christensen et al., 1982, p. 93, Galbraith & Kazanjian, 1987, p. 3, Hofer & Schendel, 1978, p. 4, Mintzberg, 1987, pp. 11-17, Quinn, 1980, p. 7). Against this backdrop, Mintzberg et al. state: "We are the blind people and strategy formation is our elephant. Each of us, in trying to cope with the mysteries of the beast, grabs hold of some part of the other" (1998, p. 21).

Über Autor(innen)

Dr. Christian Baier promovierte bei Prof. Dr. Christopher Jahns am Supply Management Institute (SMI) der European Business School (EBS) in Oestrich-Winkel. Er ist als Unternehmensberater für McKinsey&Company, Inc. in Berlin tätig.