TITLE:
Aligning Business Strategic Priorities and Purchasing Practices in Industrial Firms: Evidence from an Emerging Economy
AUTHORS:
Ghazi Samawi, Ismail Abushaikha, Loay Salhieh, Metri Mdanat, Abdelsalam Al-Rashid
KEYWORDS:
Purchasing Categories, Strategic Intent, Cluster Analysis, Factor Analysis
JOURNAL NAME:
Theoretical Economics Letters,
Vol.9 No.4,
March
29,
2019
ABSTRACT: Recent literature emphasized purchasing as a
strategic function to improve competitiveness, but existing purchasing models
lack a comprehensive approach to define the variety of purchasing practices in
purchasing strategic categories. This paper assesses purchasing practices’
strategic fit with business strategic priorities, providing an in-depth,
descriptive assessment of different purchasing construct practices, and
proposing a framework to allocate the variety of purchasing practices according
to the targeted strategic intent. The model was tested with cluster analysis of
structured questionnaire data from industrial firms in Jordan, to develop an
empirical taxonomy of purchasing operational practices. The results suggest
that purchasing practices can be grouped into three categories (cost, quality,
and availability practices) and there is a significant relationship between
different possible purchasing practices and varied related strategic intents,
which can be utilized to improve business performance. Practical implications
are provided for purchasing executives to better understand what practices need
to be adopted in order to reduce transaction costs, in support of firms’
overall business strategies.