The impact of purchasing strategy-structure (mis)fit on purchasing cost and innovation performance


Ates M., van Raaij E. M. , WYNSTRA F.

JOURNAL OF PURCHASING AND SUPPLY MANAGEMENT, vol.24, no.1, pp.68-82, 2018 (Peer-Reviewed Journal) identifier identifier

  • Publication Type: Article / Article
  • Volume: 24 Issue: 1
  • Publication Date: 2018
  • Doi Number: 10.1016/j.pursup.2017.05.002
  • Journal Name: JOURNAL OF PURCHASING AND SUPPLY MANAGEMENT
  • Journal Indexes: Social Sciences Citation Index, Scopus
  • Page Numbers: pp.68-82
  • Keywords: Purchasing strategy, Purchasing structure, Profile deviation analysis, BUYING CENTER STRUCTURE, SUPPLIER RELATIONSHIPS, MEASUREMENT EQUIVALENCE, EXPLORATORY ANALYSIS, PRODUCT DEVELOPMENT, GENERALIZABILITY THEORY, BEHAVIORAL-RESEARCH, MEDIATION ANALYSIS, BUSINESS STRATEGY, INTEGRATION

Abstract

The organizational design literature strongly supports the notion of "structure follows strategy", and suggests that a misfit between the two has a negative effect on performance. Building on this line of argument, we examine to what extent the (mis)fit between purchasing strategy and purchasing structure impacts purchasing performance. We focus on cost and innovation purchase category strategies, and examine how the deviation from an ideal purchasing structure defined along three dimensions (centralization, formalization, and cross functionality) impacts purchasing performance. Analysing data collected from 469 firms in ten countries, we demonstrate that a strategy-structure misfit negatively impacts purchasing performance in both cost and innovation strategies. We also find that purchasing proficiency is a mediator in this relationship between misfit and performance. Our findings aid managerial decision making by empirically validating the necessity of having the right purchasing structure for successfully executing different purchasing strategies.