An exploratory cross-country comparison of strategic purchasing

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Journal of Purchasing & Supply Management 13 (2007) 2–16 www.elsevier.com/locate/pursup

An exploratory cross-country comparison of strategic purchasing Jeffrey A. Ogdena,, Christian L. Rossettib, Thomas E. Hendrickc a

Department of Operational Sciences, Air Force Institute of Technology (AFIT), Building 641, 2950 Hobson Way, Wright Patterson AFB, OH 45433-7765, USA b Department of Business Management, North Carolina State University, USA c Department of Supply Chain Management, College of Business Administration, P.O. Box 874706, Arizona State University, Tempe, AZ 85287-4706, USA Received in revised form 23 March 2007; accepted 28 March 2007

Abstract This research utilises a survey to explore differences in three antecedents of strategic purchasing between seven North American and European countries. The extant literature identifies three factors associated with strategic sourcing: (1) Professionalism: purchasing’s skills, knowledge, and professionalism; (2) Status: purchasing’s status within the organisation; and (3) Supply Management: purchasing’s sophistication in managing external relationships. Based on the international purchasing and management literature, we propose that these factors will differ depending on the nation in which the purchasing function operates. Factors are derived from the data and MANOVA are used to test the proposed differences. The results indicate that differences exist among several countries within these three strategic purchasing factors. In addition, the exploratory survey captured both current and desired levels across these factors. Comparisons between current and desired levels are measured and discussed. r 2007 Elsevier Ltd. All rights reserved. Keywords: Purchasing; Strategic purchasing; International; Strategic planning; Cross-country comparison; Gap analysis; Exploratory

1. Introduction Strategic purchasing has been defined as ‘‘the process of planning, implementing, evaluating, and controlling strategies and operating purchasing decisions for directing all activities of the purchasing function toward opportunities consistent with the firm’s capabilities to achieve its longterm goals’’ (Carr and Smeltzer, 1997). The shift toward strategic purchasing was accentuated when Porter (1980) listed buyers as one of the five forces impacting the competitive nature of an industry. Whether the firm’s strategy is one of differentiation, cost, or focus (Porter, 1980), strategic purchasing’s main goal is to support the overall corporate strategy. Key decision makers must proactively seek to understand how value and costs are created in their own supply chains and look for ways to Corresponding author. Tel.: +1 937 255 3636x4653; fax: +1 937 656 4943. E-mail addresses: jeffrey.ogden@afit.edu (J.A. Ogden), [email protected] (C.L. Rossetti), [email protected] (T.E. Hendrick).

1478-4092/$ - see front matter r 2007 Elsevier Ltd. All rights reserved. doi:10.1016/j.pursup.2007.03.005

attain the overall strategic goals of the organisation in terms of its market and value positioning objectives (Cox and Lamming, 1997). In other words, ‘‘an effective purchasing system is not necessarily one that promises maximum efficiency or least total cost, but rather one that fits the needs of the business and strives for consistency between its capabilities and the competitive advantage being sought’’ (Rajagopal and Bernard, 1993). Purchasing’s involvement in the overall corporate strategic planning process can better ‘‘fit’’ purchasing’s strategy with the strategy of the corporation. As firms purchase more goods and services from suppliers than they produce internally, the potential benefit achieved from aligning the goals and objectives of the purchasing function with the organisation’s overall strategy increases (Kraljic, 1983). In recent years, the purchasing function has become increasingly involved in the formulation and implementation of strategy within many organisations (Cousins, 2005; Spekman et al., 1994). Consequently, purchasing is no longer viewed as a tactical function within these organisations, but rather as an important, strategic function (Krause et al., 2001).

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Previous studies have shown that strategic purchasing is defined by multiple factors such as the nature of internal and external relationships and the level of responsibility. In addition, research has shown that strategic purchasing can have positive effects on the firm’s overall financial performance (Carr and Pearson, 1999). Research has also shown that in order to affect the firm positively, strategic purchasing must be fully involved in a variety of internal and external activities (Ellram and Hendrick, 1995). Though previous research has provided great insight into strategic purchasing, results have been mostly limited to large North American companies. An examination of these findings in the context of international generalisability would enable a more thorough understanding of strategic purchasing. In addition, research is needed to determine whether strategic purchasing involvement levels differ among various countries. The exploratory research presented here fills this gap by answering three main questions: (1) Do the factors that compose strategic purchasing change within an international setting? (2) Is there a difference between the current and desired level of each factor across different international settings? (3) If these differences exist, what are the reasons for these differences and what can purchasing managers do to help overcome these differences? To help answer these questions, a survey instrument was created and targeted to purchasing professionals representing firms from seven countries: Belgium, Canada, France, Germany, Hungary, the United Kingdom, and the United States. The factors were then tested using principal component analysis. These factors were then compared using MANOVA. This research article is divided into seven sections. The article begins with a review of the relevant literature and proposition development. The research methodology is then presented, followed by a discussion of the research findings. Finally, managerial implication, summary, and research limitation sections conclude the article. 2. Literature review and proposition development 2.1. Gaining political power in a cross-cultural context Management scientists have often looked at firms as political bodies (Eisenhardt and Bourgeois, 1998; Saunders and Scamell, 1982). Using this theoretical lens, internal political forces are just as likely to shape strategy as external economic forces. The need for resources, or even the basic need to survive, causes the formation of coalitions between members of strategic groups. These coalitions are then governed and exert political power throughout the organisation (Astley and Sachdeva, 1984; Gresov and Stephens, 1993). Using its power, the group or individual is able to influence its own destiny as well as the destiny of the

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firm (Pfeffer, 1992). In order to form a coalition or to exercise political power, a group must have something of worth to exchange. In this sense, the group must have access to or control a resource valuable to other members of the organisation (Emerson, 1962). Emerson states that power is defined as the ability to influence the actions of another party. This power is explicitly related to the dependence of the other parties upon a resource controlled by the person or group exercising power. In management theory, dependence is usually associated with a need for a scarce resource. A group inside the organisation can increase its power by controlling scarce resources (Liden and Mitchell, 1988; Manz and Gioia, 1983). Management theorists state that scarce resources may include capital, budgets, or access to information. In addition, resources may be controlled through formal or informal mechanisms. Using this lens, researchers have found that organisational functions gain political power by controlling an ever-larger share of internal or external resources (Fligstein, 1987; Homburg et al., 1999). Homburg et al. found that the marketing function also controls information about customers and thus controls ways in which the firm could increase revenue (Homburg et al., 1999). Previous research has shown that functions or business units that held more power tended to be better educated and more professional (Fligstein, 1987). Greater professionalism instills a sense of trust in decision-making. Education increases the likelihood that decisions will be correct. In summary, functions are able to increase political power by exercising authority over resources, acting as a conveyer of knowledge about external resources, and increasing professionalism (Hambrick, 1981; Kipnis et al., 1980; Narayanan and Fahey, 1982). The purchasing literature, though not explicitly using a political lens, has identified similar constructs. In studying the rise of strategic purchasing, authors have stated that the purchasing function is responsible for dictating its own strategies (Anderson and Katz, 1998). Furthermore, as purchasing’s strategic influence increases, it has a greater role in shaping the strategy of the firm (Carter and Narasimhan, 1996a; Ellram and Carr, 1994; Kraljic, 1983; Smeltzer and Goel, 1995). Researchers have identified three major factors that measure purchasing’s strategic influence within the firm: these include the ability to exercise authority, to provide valued knowledge about the supply base capabilities, and to increase the efficiency and effectiveness of the supply base (Pearson et al., 1996). Unfortunately, the majority of this research is based on firms in the United States. Furthermore, though international strategic purchasing studies exist, there have been few cross-country comparisons of purchasing strategic influence. Therefore, an important research question remains unanswered: do national differences affect purchasing’s strategic influence? Previous research studying the difference between organisations in different countries has found support for distinct management philosophies across different national

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cultures (Bendixen and Burger, 1998; Frost et al., 2002). Culture is defined by Hofstede (1980) as ‘‘the collective programming of the human mind that distinguishes the members of one human group from those of another. Culture is a system of collectively held values.’’ These differences in management philosophies influence the management structure as well as strategy (Adler, 1983; Brouthers and Brouthers, 2000; Herbert, 1984). If national cultural differences affect both structure and strategy, it follows that purchasing’s strategic influence should vary according to the culture in which the function resides. In the following section, we examine possible strategic influence factors and develop propositions relating to national cultural affects. 2.2. Professionalism: garnering skills and knowledge Researchers studying political power in organisations have also included professionalism of the function as a measurement of influence (Eveleth et al., 1995; Reed, 1996). As purchasing becomes more strategic it requires more professional personnel. Purchasing professionals are expected to have specific training and are relied upon to provide a more in-depth analysis of sourcing decisions (Smeltzer, 1998). With increased skill and knowledge, purchasing professionals are more knowledgeable of supply market trends and the needs and desires of internal customers (Young and Varble, 1997). In addition, through advanced training, purchasing professionals may be aware of new tools and techniques designed to increase the effectiveness and efficiency of their supply bases. The specialized knowledge may also be viewed as a scarce resource that improves political power within the organisation (Davenport et al., 1992). Withholding knowledge or sharing knowledge within a coalition can increase a subunit’s power (Gresov and Stephens, 1993). Specialized knowledge may also be required for cross-functional efforts, incorporating disperse knowledge centres (Giunipero and Vogt, 1997). With increased knowledge and skills associated with professionalism, purchasing’s strategic influence is higher (Cox et al., 1995). The professionalism of a certain class of jobs is often related to the national context. Many companies have found that due to cultural differences, the same accord that is given to a profession in one country may not carry over to another country (Jaeger, 1983; Yaconi, 2001). In addition, the idea of professional control is very much related to the nature of the relationships within the organisation (Frost et al., 2002). As these intraorganisational relationships change due to contextual settings, the value of professionalism may vary (Bendixen and Burger, 1998). Also, because purchasing training organisations, such as the Institute for Supply Management or the International Federation of Purchasing and Supply Management, may not have a presence in some nations, the ability of purchasing employees to improve their skills and knowledge may be limited.

Proposition 1. Purchasing’s professionalism, knowledge, and skills, will vary according to the country in which the purchasing organisation is located. 2.3. Status: legitimate authority of purchasing The purchasing literature has identified status within the organisation as one of the key determinants of purchasing’s strategic influence (Smeltzer and Goel, 1995). Researchers have defined this construct using questions such as, is there access to the CEO or other important decision makers? Does the CEO or upper management team have a purchasing background? Does the firm have a chief purchasing officer? Status within the organisation provides the holder with legitimate authority. The holder is then allowed to make decisions on behalf of the CEO and the decisions carry the same weight as if they came directly from the CEO (Astley and Sachdeva, 1984; Pfeffer, 1992). The use of legitimate authority may allow the purchasing department to make decisions, which impact other functions. As purchasing’s status increases, its responsibility increases. Tactical responsibilities, such as ordering or inventory management, are automated or routinized to allow for an increase in strategic responsibilities (Carr and Smeltzer, 1997). Researchers have found that when purchasing is able to set its own strategic agenda, its strategic influence is higher (Carr and Smeltzer, 1997; Pearson et al., 1996). With legitimate authority and assured status within the organisation, purchasing may be more likely to take risks without the negative repercussions of failure (Smeltzer and Siferd, 1998). Furthermore, when purchasing influences the firm’s overall strategy or the strategies of other functions within the organisation, the same can be said. Contrarily, when purchasing is viewed as simply an order fulfillment function, its status is low and its ability to modify or dictate its own or other functional strategy is low (Carr and Smeltzer, 2000). Cultural norms often determine who or which functional area will be granted status. These norms may be developed through internal or external effects (Kelley and Worthley, 1981; Smith, 1992). Because of macroeconomic and cultural effects, certain functions in certain countries may be more valued than in other countries (Yaconi, 2001). For example, countries where it is difficult to procure raw materials may place greater emphasis on the purchasing function; countries where markets are fully developed and outsourcing is prevalent may also hold purchasing in high regards. Proposition 2. The status of the purchasing function will vary according to the country in which the purchasing organisation is located. 2.4. Supply management: purchasing’s ability to reward Purchasing may have the degree of professionalism, knowledge, and skills to increase its strategic influence

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within the organisation, but without the ability to improve the value of purchased inputs, this influence will be short lived (Anderson and Katz, 1998; Trent and Monczka, 2002). The purchasing literature has identified multiple techniques that purchasing organisations use to improve the competitive position of their firms. These techniques include a total cost approach to purchasing decisions (Ellram, 1995), strategic make or buy decision (Venkatesan, 1992), relationship management (Olsen and Ellram, 1997), supply base reduction (Hahn et al., 1986), supplier development (Krause and Ellram, 1997), reverse marketing, just-in-time purchasing practises, commodity management, and global sourcing (Monczka and Trent, 1995). These practises have been shown to improve the competitiveness of organisations that utilise them correctly (Carter and Narasimhan, 1996a). When purchasing is able to reduce the cost and delivery times, increase quality levels, and negotiate improved terms and conditions, it has the ability to reward other functions within the organisation (Young and Varble, 1997). For example, by engaging in supplier development activities, the quality of suppliers may improve substantially (Krause, 1999). This quality may translate to lower downtime and improved flexibility for manufacturing (Narasimhan and Das, 1999), decreased customer complaints for marketing and sales (Hartley and Choi, 1996), and lower inbound and outbound inventory positions for incoming supplies. However, the ability of the purchasing function to engage in these activities may be limited by the supply markets and logistics networks that exist. Suppliers may not be advanced enough to incorporate Total Quality Management (TQM) philosophies. Certain cultures may rely on high degrees of interpersonal trust and therefore may be unwilling to make specific investments without a lengthy relationship. Some cultures may not have the legal infrastructure that supports complex contracting terms that may result from complex purchasing agreements. Furthermore, some cultures may be very unwilling to accept change in general. Therefore, incorporating changes in the buyer/supplier relationship may be impossible. Proposition 3. The degree to which supply management techniques are practised will vary according the country in which the purchasing organisation is located. 2.4.1. Availability of resources A resource dependence view of an organisation or a function would argue that internal power is solely dependent upon the number of resources under a group’s control (Fligstein, 1987; Manz and Gioia, 1983). This argument would state that purchasing’s influence on the firm’s strategy is not context-specific but internally specific, that is, a function with greater resources will have greater influence on the strategic direction of the firm. With a larger budget and more employees, slack resources may be accumulated and used to improve political power within the firm (Palmer et al., 1987). These slack resources may

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also be used to start supplier development projects, explore new supply markets, and facilitate greater training of purchasing personnel. In addition, by its sheer size, a large purchasing organisation may be able to influence strategy simply by its bureaucratic inertia (Mintzberg, 1978). Proposition 4. Purchasing’s available resources determine the level of status, professionalism, and supply management strategies. In the preceding section, we have developed four propositions relating to purchasing’s strategic influence within the organisation. We propose that purchasing strategic influence is captured by three factors: status, professionalism, and supply management. Our first three propositions posit that purchasing can attain each of these factors if the country in which they operate facilitates such activities. Our last proposition states that purchasing’s strategic influence is not derived from national or cultural constraints, but from the amount of resources at its disposal. In the following section, we discuss the research methodology used to test these four propositions. 3. Research methodology and data analysis Based on the prior strategic sourcing literature (Carr and Pearson, 2002; Carr and Smeltzer, 1997, 2000) and discussions among several purchasing academics, an exploratory survey instrument was created to test the aforementioned factors of strategic purchasing (see Appendix A). Survey questions were designed to elicit information on (1) purchasing’s professionalism and skills, (2) purchasing’s sophistication in supply management, and (3) purchasing’s status within the organisation. Survey participants were presented with a brief definition of strategic planning and a list of ways that a strategic function may contribute to the overall strategic planning process. The participants were then asked to rate their current and desired levels of activity in each of these areas on a seven-point Likert scale (1 ¼ no activity, 4 ¼ some activity, and 7 ¼ extensive activity). These pairs of responses provided an opportunity to perform a gap analysis to compare actual levels of involvement to desired levels of involvement in strategic purchasing activities. The survey also included a short-answer section. This section asked the purchasing professionals, if applicable, why they had not attained their desired levels of involvement in their firm’s strategic planning process. The amount of resources available to purchasing was also collected for each company. Each respondent was asked to report their company’s sales, spend, purchasing’s budget, firm’s number of employees, purchasing employees, and number of suppliers. This data was used to create a summative index of purchasing’s available resources. Although not common in the purchasing literature index scales measuring different operational characteristics have been used in the strategy and operations management and marketing literature (e.g. Houston and Johnson, 2000; Jack

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and Raturi, 2003; St. John and Harrison, 1999). Such indices rely on content validity of the items composing the index (Houston, 2004). This index, although not a perfect measure of purchasing resources, contains many of the determinants of a well-funded organisation (Carr and Pearson, 2002). Correlation between the resource index and purchasing’s budget was 0.82. Once the survey instrument was created, it was pre-tested for face and content validity by a panel of industry executives and scholars. Language translations were performed as necessary, after which the questionnaire was sent to purchasing professionals in Belgium, Canada, France, Germany, Hungary, the United Kingdom, and the United States. These countries were selected because they provided cultural and economic differences and because academics within these countries were willing to assist with the data collection efforts. A combined total of 329 usable responses were received from the seven countries. Gap analysis required matching current and desired levels of influence, and therefore only 261 responses were usable for this portion of the analysis. Data involving currency was standardized to a common unit before the data analysis occurred. Table 1 contains demographic information from the responding companies displayed by country of origin. Attention should be drawn to the discrepancy between the average sizes of the firms in each country. This information was utilised to test Proposition 4: resource differences as an alternative explanation for the observed differences in factor scores among countries. Confirmatory factor analysis was performed by limiting the solution to three factors. The three-factor solution, as predicted by the literature, explained 51.8% of the variance. Factors were extracted with SPSS using the principal component analysis, followed by a Promax rotation with Kaiser normalization. Promax rotation, an oblique rotation, was chosen since there is not a theoretical basis for expecting these factors to be entirely orthogonal. We expected questions to load on multiple factors. This cross-loading also helps explain the strategic nature of various purchasing responsibilities. For example, the question relating to delivery and quality loaded solidly on the second factor, supply management. However, the scales

relating to supply base rationalisation, strategic alliances, and cost savings cross loaded on professionalism and supply management. It can be hypothesised that with more professional training and strategic thinking, purchasing departments are practicing more advanced supply base management techniques. The original 18 items were retained. Factor loadings were all above 0.6. Chronbach’s alpha were all acceptable with values greater than 0.75: Professionalism ¼ 0.82; Supply Management ¼ 0.78; Strategic Integration ¼ 0.76. Inter-item correlations were acceptable with most interscale items correlated above 0.35. The fact that the survey was translated and used across multiple languages may have been problematic for certain items, therefore we chose to retain those that might otherwise have been removed with a more stringent confirmatory factor analysis. Table 2 shows the factor pattern matrix for each item and the corresponding survey question. Factor scores were calculated using the regression procedure in SPSS, allowing for a certain amount of parallel structure between the factors. The three factors were then compared across two dimensions, nationality and purchasing’s resources. Purchasing’s resources was calculated as a summative index of the standardized values of company revenue, firm employees, purchasing employees, spend, and number of suppliers. These values were highly correlated, correlations ranged from 0.7 to 0.95, however, not all companies reported all values. By using a summated index, mean substitution could be used to increase the sample size without greatly affecting the variance of the index. The index was then divided into quintiles and ranked: much less, less, average, more, much more. To test the four propositions, MANOVA analysis was employed. Three general linear models were constructed in SPSS version 7.0. A model was constructed for each factor that included nationality and resources as main effects, as well as an interaction term. A significant interaction term would indicate that nationality or resources alone do not explain differences in a factor. Theoretically, this would imply that culture and available resources have a multiplicative effect on higher levels of professionalism, supply management, or status factor scores.

Table 1 Country characteristics Characteristics (means)

Belgium

Canada

France

Germany

Hungary

United Kingdom

United States

Annual sales $ (millions) Annual purchases $ (millions) Number of active suppliers Approximate number of active suppliers that account for 90% of annual $ purchases Number of purchasing employees Per cent of total annual goods purchased by purchasing department (%) Per cent of total annual services purchased by purchasing department (%)

269 140 3273 338

507 130 1970 309

268 124 961 287

2028 759 1824 191

0.30 0.26 187 58

1786 968 6321 635

7514 2749 8689 687

25 86

18 78

16 86

53 88

17 88

76 64

197 79

54

55

65

62

12

54

56

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Table 2 Survey items and corresponding factor pattern Item Question

P A N E R Q O J K I L M H B C G D F

Factor 1 professional

Purchasing trains/educates purchasing professionals to think/act strategically 0.731 Purchasing has a formal process for developing strategic plans 0.695 Professionalisation of purchasing staff 0.689 Purchasing sets its own strategic goals and objectives 0.679 Purchasing professionals focus primarily on strategic activities; operational transaction-orientated 0.674 duties are delegated to internal clients/suppliers Purchasing recruits individuals who have a strategic orientation 0.655 Purchasing contributes to major outsourcing/make/buy decision 0.531 Supplier on-time delivery 0.194 Supplier lead time (cycle time) 0.161 Quality improvement 0.359 Supply base rationalisation 0.455 Strategic supplier alliance development 0.516 Purchasing cost savings 0.379 Purchasing integrates its strategic plan/ process into corporate’s strategic plan/planning process 0.523 Purchasing’s strategic plan influences the structure of corporate’s strategic plan 0.344 Purchasing and corporate jointly set Purchasing’s goals and objectives 0.240 Purchasing’s strategic plan is influenced by corporate’s plan 0.375 Corporate sets Purchasing’s goals and objectives 0.113

The adjusted means were then compared by nationality and resource level. Because of the number of nationalities (seven), the number of resource classifications (five), and the exploratory nature of this study, unadjusted least significant difference at a 0.10 significance level was used over more stringent tests. 4. Discussion of results The results indicate support for three of the four propositions. The three models were significant at the 0.000 level with an adjusted R2 of 0.930 for the professionalism model, 0.893 for the supply management model, and 0.889 for the status model. Multivariate tests were performed to check if there was evidence of a significant difference in the factor scores. The results indicated that a significant difference existed for nationality (Wilkes Lambda adjusted F-test p ¼ 0.00) and for the resource effect (Wilkes Lambda adjusted F-test p ¼ 0.05). The interaction effect was not significant (Wilkes Lambda adjusted F-test p ¼ 0.17). The following is a discussion of the results associated with the four propositions. Pairwise comparisons are used to highlight differences between nationalities and purchasing resources. 4.1. Purchasing’s skills, knowledge, and professionalism Proposition 1 states that purchasing’s professionalism will differ by nationality. MANOVA results reveal that there is statistical support for Proposition 1: the main effects due to nationality are statistically significant. The professionalism factor is a combination of training,

Factor 2 supply management

Factor 3 status

0.425 0.234 0.509 0.060 0.283

0.404 0.476 0.215 0.101 0.245

0.475 0.299 0.775 0.768 0.692 0.645 0.607 0.489 0.295 0.323 0.366 0.327 0.169

0.388 0.350 0.314 0.416 0.350 0.120 0.287 0.187 0.795 0.784 0.686 0.685 0.579

knowledge, and actions that should lead a purchasing department towards more strategic influence within the firm. As seen in Table 3, the results show that Hungary had the lowest levels of professionalism. This result might be expected, given that Hungary is the only Eastern bloc country represented in the sample and had a large number of very small firms. Hungary has only recently joined the EU, and therefore its market economy may not be as mature as other countries in the sample. The surprising result is that firms from the UK had significantly lower professionalism than their Canadian and US counterparts. Unlike the Hungarian sample, the UK sample was evenly distributed in resources and did not include any very small firms. Interestingly, the Hofstede indices for the UK and the US are almost indistinguishable (Hofstede, 1980). Therefore, at least by Hofstede’s measure, culture does not offer an explanation for this lower level of professionalism. 4.2. Purchasing’s status within the organisation Purchasing’s status within the organisation was dependent upon nationality—significant at 0.015—whereas the effect of resources available was not significant. However, unlike with professionalism, the interaction term was not significant. This factor examines how purchasing integrates its strategy with the organisation and these results suggest that purchasing’s status within the organisation may be more dependent upon the organisational culture within the company than on the resources that are available. Perhaps the most interesting result is the unexpected low levels of status for the UK and Germany. On average, German purchasing companies had significantly less status

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Table 3 Professionalism differences across countries Country

Hungary UK Germany France Belgium USA Canada

n

49 50 48 29 22 89 42

Adjusted mean

Std. error

90% confidence interval

Statistically significant results

Lower bound

Upper bound

(Based on pairwise comparisons of adjusted mean with p ¼ 0.10)

4.545 5.971 6.133 6.366 6.742 6.796 7.292

Less than all 4 Hungary;oCanada and USA 4Hungary and UK 4 Hungary 4 Hungary 4 Hungary and UK 4 Hungary and UK

3.691 5.330 5.688 5.743 5.769 6.273 6.536

0.518 0.388 0.270 0.378 0.589 0.317 0.458

2.837 4.689 5.242 5.120 4.797 5.75 5.781

Adjusted mean

Std. error

90% confidence interval

Statistically significant results

Lower bound

Upper bound

(Based on pairwise comparisons of adjusted mean with p ¼ 0.10)

3.182 3.453 4.145 4.481 4.171 4.095 4.489

4.549 4.403 5.757 5.596 5.993 6.169 5.819

o o 4 4 4 o 4

Table 4 Status Differences across Countries Country

UK Germany Canada USA Hungary Belgium France

n

49 50 48 29 22 89 42

3.865 3.928 4.951 5.039 5.082 5.132 5.154

0.414 0.288 0.488 0.338 0.552 0.629 0.403

than those in the US, France, and Hungary. This is interesting because based on geographic distance, one would think that German culture might bridge eastern and continental European cultural differences. However, on this measure, Germany’s purchasing status was lower than both of its nearest neighbours to both the east and the west. Germany also had the greatest unadjusted gap between current and desired status levels. This raises a very interesting question: do German purchasing departments view their status more critically than other nationalities? That is, do German purchasing departments have much higher expectations for their level of strategic integration than their counterparts? Future research is needed in this area (Table 4). Another interesting result is the lack of a significant difference between US and Canadian purchasing departments and those in France and Belgium. Examining the unadjusted data, the general results show a loose hierarchy, with departments in the US and France having greater status than those in Canada and Belgium. However, it appears that language and geography do not influence this factor as much as other, more subtle, forms of cultural differences. Some of the comments from case research conducted prior to this study shed some light on these results (Arnold et al., 1999).



United States: All firms reported some degree of involvement in strategic planning. Some organisations



France, Hungary, and USA France, Canada, Hungary, and USA Germany;oHungary Germany and UK Belgium, Canada, Germany, and UK Hungary Germany and UK

are highly involved with elaborate processes, and some take a more informal approach. However, all believe that their strategic initiatives can have a profound and positive effect upon the competitiveness of their firms. A common ‘‘complaint,’’ however, is that they (purchasing professionals) believe they should have even more influence on the overall strategic direction of their firms. United Kingdom: In most of the companies studied ‘‘there is a lack of a properly integrated purchasing process. In particular, there appears to be a major problem linking long-term strategic planning with a more proactive and innovative role for purchasing in supplier development.’’ However, this is not an ‘‘issue that appears to be receiving significant attention in most of the companies studied. This leads to the conclusion that the need to link supply chain and market strategy with operational practice within the company and with suppliers remains one of the most underdeveloped areas of purchasing excellence in the UK, etc. In virtually all of the cases analysed, it is clear that purchasing feels itself to be in an essentially reactive role.’’

In summary, Proposition 2 is supported. The country in which a purchasing department resides appears to influence its status and thus the degree of integration in the strategyforming process.

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4.3. Supply management The overall results for the supply management model were not significant. Based on these results, it does not appear that there are overall differences in supply management between firms from different countries or with different levels of resources. Consequently, Proposition 3 is not supported. Although limited differences between nationalities exist, the differences are not generalisable. Still, as seen in Table 5, there were several significant differences worth noting. The sophistication of supply management practises captures the level of involvement in managing supplier relationships. These range from quality and delivery to forming strategic alliances. Again, the United Kingdom appears to have a lower level of one of the strategic influence factors than does Canada. It was also lower than Germany. 4.4. Resources The fourth proposition stated that resources determined purchasing’s professionalism, status, and use of supply

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management strategies. This proposition was partially supported. First, there were differences in a purchasing department’s professionalism at different resource levels, shown in Table 6. Purchasing departments with much less resources had significantly lower professionalism than all of their counterparts. Therefore, the resource effect, though not as strong as the nationality effect, does appear to play a role in professionalism in purchasing departments. Whether this increased access to resources is due to increased centralisation, increased perceived importance of the function, or just the increased size of the staff, is worthy of further research. Second, Table 6 indicates that resources had no effect on purchasing’s status within the organisation. Finally, in terms of the degree to which supply management techniques are practised, the only significant results when comparing resources was a difference between firms with much greater and much less resources. Perhaps, these smaller purchasing departments typify the purchasing clerk position as described in early purchasing literature. Purchasing departments of this size may not have the excess resources to engage in activities

Table 5 Supply management differences across countries Country

n

Adjusted mean

Std. error

90% confidence interval Lower bound Upper bound

Statistically significant results (Based on pairwise comparisons of adjusted mean with p ¼ 0.10)

UK Hungary USA Belgium Germany France Canada

49 50 48 29 22 89 42

4.942 5.514 5.964 6.013 6.069 6.072 6.563

0.501 0.667 0.408 0.759 0.348 0.487 0.590

4.116 4.414 5.290 4.760 5.495 5.268 5.590

o Canada and Germany

5.768 6.614 6.637 7.266 6.642 6.875 7.537

4 UK 4 UK

Table 6 Resources results Dependent variable

Resources

n

Mean

Std. error

90% confidence interval Lower Upper bound bound

Statistically significant results (Based on pairwise comparisons of adjusted mean with p ¼ 0.10)

Professionalism

Much less Less

61 64

4.612 5.826

0.207 0.202

4.270 5.493

4.953 6.159

Average Greater Much greater Much less Less Average Greater Much greater Much less Less Average Greater Much greater

61 64 63 61 64 61 64 63 61 64 61 64 63

6.394 6.017 6.840 4.906 4.895 4.619 4.482 4.985 5.630 6.105 6.178 5.637 6.423

0.207 0.202 0.204 0.226 0.221 0.226 0.221 0.223 0.252 0.246 0.252 0.246 0.248

6.052 5.683 6.505 4.532 4.530 4.245 4.117 4.618 5.215 5.699 5.763 5.232 6.015

6.735 6.350 7.176 5.279 5.259 4.992 4.846 5.353 6.045 6.510 6.593 6.043 6.832

Less than all 4 Much less;ogreater and much greater 4 Much less, less 4 Much less;omuch greater 4 Much less, less, and greater

Status

Supply management

o Much greater o Much greater 4 Much less and greater

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outside the firm’s direct control. These departments may simply be ensuring that basic quality, delivery, and price targets are achieved. Lastly, purchasing departments with much greater resources had higher levels of supply management than those with greater resources and much less resources. This appears to indicate that supply management demands a high level of resources and smaller firms may not be able to engage in this activity. 4.5. Gaps: differences in strategic influence factors The gaps in strategic influence factors were carried out in a two-stage process. First, the difference between the current and desired levels for each factor score was calculated. Then a general linear model was used to calculate adjusted means based on both countries and resources in the model. The 90% confidence intervals of the adjusted means were used to determine if the gap was significant. Countries and resources were then compared across the three factors. Interestingly, these results for country differences are in agreement with the previous findings. Germany and the UK both have the largest gaps between their current and desired levels of strategic influence factors. Professionalism contained three gaps that were statistically different from zero: USA, UK, and Germany. Supply management did not contain any statistically significant gaps. The UK and

Germany both had statistically significant status gaps. Although comparing insignificant gaps (gaps with confidence intervals that contain zero) is questionable, in several cases the means differed significantly. This is particularly true of the status factor. Purchasing departments in Belgium, France, and the US had smaller status gaps than those in Germany. Similarly, purchasing departments in Belgium, France, US, and Canada had smaller status gaps than those in the UK. These results indicate that although purchasing departments in both the UK and Germany have lower average professionalism and status than their counterparts in other countries, they desire to improve (Table 7). The gaps were significant at all resource levels, but there was only one significant difference in resource levels. Medium resources had a lesser gap than small resources. This result suggests that gaps between desired and current levels of strategic influence exist within all purchasing departments regardless of the resources available. However, the sizes of the gaps tend to differ by the nationality of the purchasing department (Table 8). 5. Managerial implications This exploratory research has revealed that general differences exist between countries in terms of professionalism and status, but not in terms of the degree to which

Table 7 Gap analysis by country Dependent variable

Professionalism gap

Status gap

Supply management gap

Country

na

Adjusted mean

Std. error

90% confidence interval

Statistically significant results

Lower bound

Upper bound

(Based on pairwise comparisons of adjusted mean with p ¼ 0.10) oGermany and UK

France Canada USA Belgium UK Germany Hungary France USA Belgium Canada Germany UK

21 34 86 22 44 40 14 21 86 22 34 40 44

0.135 0.557 0.695* 0.847 1.149* 1.275* 1.297 -1.171 -0.524 -0.366 0.307 1.124* 1.473*

0.537 0.464 0.391 0.535 0.428 0.438 1.122 0.805 0.586 0.802 0.695 0.656 0.642

0.752 0.208 0.050 0.036 0.442 0.553 0.555 2.501 1.491 1.690 0.839 0.040 0.413

1.022 1.322 1.340 1.731 1.856 1.998 3.148 0.158 0.443 0.958 1.454 2.207 2.533

Hungary UK

14 44

2.430 0.28

1.681 0.547

0.345 0.623

5.205 1.183

oCanada and USA

France Hungary Belgium Germany Canada USA

21 14 22 40 34 86

0.486 0.511 0.882 1.164 1.322 1.325

0.686 1.432 0.683 0.559 0.592 0.499

0.647 1.854 0.246 0.241 0.345 0.501

1.619 2.876 2.01 2.087 2.299 2.149

4UK 4UK

*Significantly different from zero p ¼ 0.10. a Sample size of matching pairs of current and desired ¼ 261.

4France 4France

o Germany and UK 4France;oUK 4Belgium, France, and USA 4Belgium, Canada, France, and USA

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Table 8 Gap analysis by resources Dependent variable

Resources

na

Adjusted mean

Std. error

90% confidence interval Lower Upper bound bound

Statistically significant results (Based on pairwise comparisons of adjusted mean with p ¼ 0.10)

Professionalism gap

Much less Less Average Greater Much greater Much less Less Average Greater Much greater Much less

38 53 53 56 61

1.242* 0.975* 0.307 0.465 0.899*

0.413 0.293 0.292 0.431 0.498

0.559 0.492 0.176 0.247 0.077

1.924 1.458 0.789 1.177 1.721

4 Average

38 53 53 56 61

0.746 0.769* 1.513* 0.534 1.305*

0.520 0.368 0.367 0.542 0.626

0.112 0.162 0.907 0.361 0.272

1.604 1.376 2.120 1.428 2.339

38

0.434

0.624

0.595

1.464

53 53 56 61

0.833* 0.718 0.635 0.213

0.441 0.441 0.650 0.751

0.105 0.010 0.439 1.026

1.562 1.446 1.709 1.453

Status gap

Supply management gap

Less Average Greater Much greater

o Much less

*Significantly different from zero p ¼ 0.10. a Sample size of matching pairs of current and desired ¼ 261.

supply management techniques are practised. This research has also revealed that the amount of resources available to the purchasing organisation can influence its level of professionalism. Astute purchasing managers should utilise this information when seeking to make changes within their various purchasing organisations. The following sections may be helpful in these change management efforts. The first section discusses why gaps exist between current and desired strategic purchasing involvement levels. This section is based upon the qualitative responses captured on the survey. The second provides information about how purchasing organisations may potentially close the gap between current and desired strategic involvement levels in terms of professionalism, status, and the degree to which supply management techniques are practised. 5.1. Why gaps exist between current and desired involvement levels As mentioned earlier, in addition to collecting quantitative information about current and desired involvement levels, respondents were also asked to provide qualitative responses stating why, if applicable, gaps exist between current and desired involvement in strategic purchasing activity levels (see Appendix A, question 3). A content analysis of these qualitative responses revealed four distinct categories or reasons for the perceived gaps between current and desired involvement levels (see Fig. 1). Based on the literature, these categories were labelled (1) organisational structure, (2) top management support, (3) organisational history, and (4) organisational culture.

Organizational Culture 12%

Top Management Support 26%

No Gap 9%

Organizational History 25%

Organizational Structure 28%

Fig. 1. Reasons for gap between current and desired involvement.

Interestingly, comments representing each of these categories were made by respondents from each of the countries and none of these reasons were mentioned more frequently in one country than another. In addition to the four categories listed above, 9% of the respondents stated that there was ‘‘no gap’’ between current and desired levels of strategic involvement. The following paragraphs discuss each of these categories in greater detail. Organisational structure was the first and largest category. Twenty-eight per cent of the respondents stated that the reporting structure of the organisation was the greatest inhibitor to purchasing achieving strategic involvement. One purchasing professional’s response was typical: ‘‘Purchasing is considered an operational function; strategic planning is considered a ‘policy-making’ task for non-operational

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units.’’ The nature of reporting relationships and responsibilities seems closely related to, and may be a substitute measure for, the status that a given function holds within the organisation. The high frequency with which this category was mentioned by respondents lends further credibility and validity to the use of status as a factor affecting strategic purchasing within the organisation. The second largest category, accounting for 26% of the responses, was top management support or, more appropriately, the lack thereof. Statements like, ‘‘lack of awareness of purchasing’s ability’’ and ‘‘not enough understanding by senior management as to the value purchasing has,’’ were representative of comments in this category. These two common responses support the previously cited literature, which states that purchasing must have representation in or access to upper management in order to achieve involvement in the firm’s strategic corporate plan. These responses also support the status factor mentioned previously. Historical reasons, at 25%, made up the third group. A purchasing professional from Germany summarised these responses well by writing, ‘‘In the past, there were problems in accepting the strategic meaning of procurement.’’ A respondent from the United Kingdom echoed this sentiment by stating, ‘‘Historically, purchasing y is still perceived as a clerical function staffed at a minimal cost.’’ These statements seem to suggest that purchasing must not only act strategically but must be perceived as strategic before its activities will be fully recognised for the value that they can add. Organisational culture comprised the fourth category with 12% of the respondents listing reasons such as, ‘‘purchasing professionals are not respected for their contribution y’’ and the ‘‘strategic development plan is dominated by sales objectives.’’ A respondent from the UK stated that strategic purchasing is a ‘‘new philosophy’’ and that it ‘‘takes time to change corporate culture.’’ Since differences in management philosophies or cultures can influence the management structure as well as strategy (Adler, 1983; Herbert, 1984), it is not surprising that these types of comments were made by survey respondents. These latter two reasons for gap differences, organisational history and organisational culture, demonstrate how slowly some organisations adapt their norms, values, and beliefs. They emphasise the difficulty that purchasing functions have of overcoming traditional views concerning their role within their organisations. Specifically, even though studies have shown that procurement can have a significant impact on the bottom line, many organisations still do not view the services provided by purchasing as being critically important. 5.2. Suggestions for closing the gap between current and desired involvement levels The three strategic purchasing factors evaluated in this research are (1) purchasing’s level of professionalism

(internal); (2) purchasing’s status within the organisation (intra-organisational); and (3) purchasing’s interactions with its supply base (inter-organisational). These three factors are highly correlated, indicating that an increase in one area may translate into increases in other areas. As suggested by prior studies, these increases could lead to an overall boost in the level of purchasing’s strategic involvement within a company. Prior studies have shown that this increase in strategic involvement is associated with higher profitability (Carr and Pearson, 1999). Therefore, purchasing should strive to improve in these three areas. Fortunately, the literature suggests some ways that the areas discussed in this article may potentially be improved. The following paragraphs discuss this literature, and the improvement suggestions that it contains, in greater detail. 5.2.1. Professionalism A logical place to start improvement efforts might be in the purchasing department itself through the professionalisation and training of purchasing employees. Purchasing’s skills, knowledge, and professionalism may be the most important current and future critical success factor for strategic purchasing (Monczka and Trent, 1995). Purchasing professionals must clearly have greater skills today than in the past (Carter and Narasimhan, 1996b). Faes et al. (2001) describe the five profiles of effective buyers as (1) the go-getter, (2) the classic negotiator, (3) the caretaker, (4) the traditional buyer, and (5) the traditional expert. They also discuss the skills and traits that each of these profiles involve. To increase their strategic involvement, purchasing managers must be willing to invest in individuals skilled and knowledgeable in these areas and in strategic, rather than tactical, management concepts (DeRijcke et al., 1985). Recruiting, training, educating, and professionalizing these ‘‘strategically-oriented’’ employees may help purchasing professionals become integrated more efficiently and effectively in their organisations and with other firms in the supply chain. Previous studies have noted, ‘‘As purchasing’s knowledge and skills increase, the level of strategic purchasing increases’’ (Carr and Smeltzer, 1997). The expertise of the department is also a crucial determinant of a purchasing manager’s influence in an organisation (Smeltzer and Goel, 1995). Not surprisingly, Carter and Narasimhan list education and training requirements as one of three major categories of items that will affect strategic purchasing in the future. However, as purchasing shifts from a tactical to a strategic function, the ability to attract and retain good employees becomes more difficult (Overell, 1998). Continued education and development of purchasing employees can facilitate the effective communication of purchasing’s contribution to the firm and increase its own influence within the organisation (Smeltzer and Goel, 1995) and along the supply chain. However, as the above analysis

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indicates, the purchasing organisation may want to consider securing the necessary resources (both financial and human) in order to begin to affect change in these factors. 5.2.2. Status In addition to possessing the skills mentioned above, purchasing professionals must be given the authority and support necessary to utilise those skills (Carter and Narasimhan, 1996a; Smeltzer and Siferd, 1998). Purchasing must be perceived as a strategic corporate function in order for the proactive activities mentioned earlier to be fully recognised and implemented (Carter and Narasimhan, 1996a; Smeltzer and Siferd, 1998). The department’s organisational position within the firm, the nature of its linkages with other organisational units, and the awareness and assessment of purchasing activities at top management levels are important determinants of a purchasing manager’s influence within an organisation (Smeltzer and Goel, 1995). Monczka et al. (1998) discuss the importance of this factor as follows: The ability to support company goals requires a fundamental shift in the way that purchasing is viewed within the management structure. Purchasing can no longer be a support function, but must be recognized as a strategic asset that provides a powerful competitive advantage in the marketplace. In order for this to happen, the objectives of executive purchasing management must be aligned with their company’s goals and objectives (Monczka et al., 1998). Carter and Narasimhan (1996b) mention the importance of ‘‘internal organisational integration’’ to strategic purchasing and predict that it will become even more important in the future as organisations structure themselves along ‘‘key business processes’’ that extend across functional boundaries. As organisations become flatter, more cross-functional teams will be utilised (Hammer and Champy, 1993). Executives need to ‘‘examine more closely how supply-base strategies developed through purchasing can be more closely linked with corporate strategies to achieve competitive advantages’’ (Monczka and Trent, 1995). 5.2.3. Supply management Purchasing professionals support the company’s strategy by finding the best suppliers, establishing the correct relationships with those suppliers, and correctly managing those relationships. Cox and Lamming (1997) argue that in order for an organisation to achieve a sustainable competitive advantage it must ‘‘constantly assess the relative utility of a range of collaborative and competitive external—and internal—contractual relationships’’ (Cox and Lamming, 1997). Rajagopal and Bernard (1993) acknowledge the necessity of constructive management of both ‘‘inter-company’’ and ‘‘intra-company’’ relationships

13

as well. Carter and Narasimhan (1996b) discuss the importance of this factor as follows: Although lean manufacturing has brought to light the importance of purchasing and supply management, the primary view of this function in many organisations is that it interacts primarily with manufacturing and suppliers. However, a strategic view of purchasing and supply management demands that it be linked to the market and the customer, leading to the extension of its ‘‘reach’’ all the way from suppliers through the internal value chain of the firm, to the firm’s market, and on through to the ultimate customer. This contention is underscored by the analysis of the survey data , which identified ‘‘internal organisation integration’’ and ‘‘external organisation integration’’ as two of the emerging future directions. The current survey supports Carter and Narasimhan’s (1996a) conclusion: effective strategic purchasing does not stop at organisational boundaries. Effective strategic purchasing involves aligning the internal and external organisations with the firm’s strategic plan. 6. Summary of results This exploratory research addresses two important variables that affect purchasing’s strategic involvement across three factors: (1) purchasing’s skills, knowledge, and professionalism; (2) purchasing’s status within the organisation; and (3) purchasing’s sophistication in external relationships. The first variable, the purchasing organisation’s country, affected two of these factors. The second, the amount of resources available to purchasing, had limited effects. Factor analysis supported the presence of three strategic involvement factors. MANOVA analyses indicated statistically significant differences between countries based on these three factors. Purchasing departments with greater access to financial and human resources, as well as purchasing departments based in certain countries, have higher scores on these factors than other purchasing departments. Support was found for Propositions 1 and 2. Purchasing’s professionalism and status vary by the country in which the department is located. This suggests that the differences in purchasing’s professionalism and status vary according to country. Proposition 3 was not supported. Purchasing departments’ supply management techniques do not vary by nationality. Proposition 4 offered an alternative to the previous propositions and it was partially supported. Due to the principal component method, the first factor (professionalism) explained the majority of the variance. Therefore, it is possible that with a larger sample size and a more refined measure of the purchasing departments’ available resources, more significant results could be established. See the limitations section for a more thorough explanation.

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majority of research on culture relies on direct measures of culture. Other research tests the cultures of different industries. Since this research did not test for industry differences, there may be an industry effect that explains the degree of purchasing’s strategic influence. Secondly, due to incomplete surveys an index measuring purchasing resources was used instead of the direct measure of access to resources. This may provide an opportunity for future researchers to more fully explore the relationship between resources and strategic purchasing. Lastly, this work also suffers from a lack of sample size. Although the study has a relatively large response rate, given the number categories compared (12 with nationality and resources), statistical significance was difficult to guarantee. Future research may wish to test a direct measure of cultural differences and then compare purchasing’s strategic influence. Finally, although the literature suggests ways that the gap between current and desired involvement levels may be reduced, more research may be necessary to empirically test whether these suggestions actually help reduce this gap. Future studies could focus on the implementation of the suggestions mentioned in the literature and determine their overall effect on purchasing’s professionalism, status, and its relationship with suppliers.

The gap analysis provided interesting insight into the possible changes within purchasing departments. Though Germany and the UK both had significantly lower professionalism and status than their counterparts, they also had the largest gaps between current and desired levels of involvement. Purchasing still has an image, as so aptly put by one respondent, as a ‘‘group of old men’’ in many organisations. On average, respondents from all countries and resource categories indicated a desire to become more strategically involved in their firms. Though this result may seem inconsequential, as perhaps all functions wish for increased recognition, when combined with the written comments of 9% of the respondents who stated that there was ‘‘no gap’’ between current and desired levels of strategic involvement, the results show that these desires can actually be realized. 7. Research limitations There are several limitations of this exploratory study that should be dealt with in future research. The first limitation is that the questionnaire relies upon purchasing professionals’ perceptions concerning their current levels of involvement. Respondents may either over- or underestimate their level of strategic involvement. In addition, this study was aimed at the chief purchasing officer; this creates a natural bias within the sample. Corporate headquarters will be targeted in large corporations, whereas purchasing departments in smaller firms more than likely share residence with operational facilities; this creates a bias due to the level of analysis. It is possible that if purchasing personnel at the plant level of large corporations were surveyed, their responses would be more in line with their counterparts at smaller corporations. In addition, this research relies upon two proxies. First, nationality serves as a proxy measure of culture. The

Appendix A. Questionnaire Purchasing and Supply’s Strategic Planning Process and Its Integration into Overall Corporate Strategic Plans. Brief definition: A strategic plan results from a strategic planning process and defines an organisation’s mission, goals, objectives, strategies, initiatives, tactics, and operational plans. In addition, it specifies the human, capital, intellectual, and technical resources required to achieve its mission, goals, and objectives, and a time-phased action plan for implementations (see Table A1).

Table A1 1. To what extent is your purchasing organisation currently involved in the following activities associated with the purchasing and supply management strategic planning process, and, in addition, its integration into overall company strategic plans/planning process? (Please circle one number) No Activity Some Activity Extensive Activity a. Purchasing has a formal process for developing strategic 1 2 3 4 5 6 7 plansyyyyyyyyy.. b. Purchasing integrates its strategic plan/process into corporate’s strategic plan/planning processyyyyyyyyyyyy..

1

2

3

4

5

6

7

c. Purchasing’s strategic plan influences the structure of corporate’s strategic planyyyyyy.. d. Purchasing’s strategic plan is influenced by corporate’s planyyyyyyyyyyyy.. e. Purchasing sets its own strategic goals and objectivesyyyyyyyyyyy.. f. Corporate sets Purchasing’s goals and objectivesyyyyyyyyyyy.. g. Purchasing and corporate jointly set Purchasing’sgoals and objectivesyyyyyyyyyyy..

1

2

3

4

5

6

7

1

2

3

4

5

6

7

1

2

3

4

5

6

7

1

2

3

4

5

6

7

1

2

3

4

5

6

7

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Table A1 (continued ) Purchasing has specific (quantitative) goals/objectives for: h. Purchasing cost savingsyyyyyyyyy.. 1 2 3 4 5 6 7 Briefly describe________________________________________________________________________ i. Quality improvementyyyyyyyyy.. 1 2 3 4 5 6 7 Briefly describe________________________________________________________________________ j. Supplier on-time deliveryyyyyyyyy.. 1 2 3 4 5 6 7 Briefly describe________________________________________________________________________ k. Supplier lead time (cycle time)yyyyyyyyy.. 1 2 3 4 5 6 7 Briefly describe________________________________________________________________________ l. Supply base rationalizationyyyyyyyy.. 1 2 3 4 5 6 7 Briefly describe________________________________________________________________________ m. Strategic supplier alliance development..yyyyyyyyyy.. 1 2 3 4 5 6 7 Briefly describe________________________________________________________________________ n. Professionalisation of purchasing staffyyyyyyyyyyy.. 1 2 3 4 5 6 7 Briefly describe________________________________________________________________________ o. Purchasing contributes to major outsourcing/make/buy 1 2 3 4 5 6 7 decision..yyyyyyyyyyyyy.. p. Purchasing trains/educates purchasing professionals to think/act 1 2 3 4 5 6 7 strategicallyyyyyyyyyyyy.. q. Purchasing recruits individuals who have a strategic orientation 1 2 3 4 5 6 7 yyyyyyyyyyy.. r. Purchasing professionals focus primarily on strategic activities; 1 2 3 4 5 6 7 operational transaction-orientated duties are delegated to internal clients/suppliers.. 2. Now, please return to the beginning of Question #1, and place an ‘‘X’’ over the number that best describes your desired extent (level) of strategic planning activity for each item. (Note: Your ‘‘circled’’ numbers from your current extent (level) of strategic planning activity responses in Question #1 may or may not match your ‘‘X’d’’ numbers for your desired level of strategic planning activity. 3. If there is a gap between the current roles/responsibilities purchasing and supply management plays in your company’s strategic plan development process, and the desired roles/responsibilities, why does this gap exist?

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