Academic journal article
By Pearson, John N.; Ellram, Lisa M.
International Journal of Purchasing and Materials Management , Vol. 29, No. 3
It has long been recognized that the purchasing function can play an important strategic role in contributing to the success of a firm. In many cases, however, members of the purchasing function have been too far removed from decisions that affect their ability to perform the purchasing job effectively. The purpose of this article is fourfold. First, it begins with a brief exploration of past literature regarding the involvement of the purchasing function in a variety of decision issues that affect the purchasing function. Second, key purchasing decision issues are presented and clustered into categories. Third, the results of a survey of purchasing executives regarding the current level of the purchasing function's involvement in a variety of decision issues are presented. Finally, based on the study results, the article examines future trends in purchasing decision involvement.
IMPORTANCE OF PURCHASING INVOLVEMENT IN DECISIONS
The past decade has seen an increase in the body of literature that supports the concept that the purchasing function can be an active, vital contributor to the strategic success of a firm if it is informed of and involved in key decision issues.|1~ In particular, purchasing can contribute by playing a key role in the supplier selection process--matching the selection of a supplier with the firm's strategy. Researchers have postulated that given access to information regarding the firm's strategy and involvement in key decision-making issues within the firm, the purchasing function can be an important contributor to the overall strategic success of the firm.|2~
Thus, the purchasing function's involvement in decision making should reflect the important role that purchasing can play in the firm. In particular, the decision-making involvement of the purchasing function should reflect the large number of dollars that purchasing controls in many firms. Further, the involvement of the function in decision making should reflect the potentially significant strategic contribution purchasing can make to the firm's overall success.
However, relatively little work has been undertaken that examines the purchasing function's involvement in decision making. An important study conducted by the Center for Advanced Purchasing Studies|3~ explores the purchasing function's involvement in key decision issues by examining the major areas for which the purchasing function is responsible. The involvement of the purchasing function in key decision issues is also explored to some extent by several other researchers.|4~
Nature of Decision Participation
This research explores in some depth the specific nature of the purchasing function's involvement in decision making on a decision-by-decision basis. There are a variety of ways in which purchasing may become involved in a firm's decision-making process. Purchasing might have responsibility for some aspect of a given decision, responsibility for routine, day-to-day decisions, or complete responsibility for all decision making in a given area.
On the other hand, purchasing could be involved in decision making as a member of a team. Today the team concept is becoming increasingly important in managing a business.|5~ For the purposes of this research, a team includes the use of a committee, task force, or group of people from a variety of functional areas to achieve a common goal. By using work teams that include a number of functions with a variety of skills and knowledge, communication, decision making, understanding, and commitment all improve. The concept supporting team involvement holds that improved interfunctional cooperation and understanding can improve the quality, the speed, and the commitment of decision making. Issues that have broad and strategic implications increasingly are decided at a team level.
Team action typically provides a greater breadth of information for consideration in the decision process. …