Options
Strategic alignment and purchasing efficacy: an exploratory analysis of their impact on financial performance
Journal
Journal of Supply Chain Management
ISSN
1523-2409
Type
journal article
Date Issued
2008-10-01
Author(s)
Abstract
Purchasing and supply management (PSM) has become a discipline of major strategic importance for effectively competing in today's global marketplace. Literature recognizes that the full value-creation potential of the purchasing function can only be realized if its decisions and activities are aligned with the organization's overall strategic orientation. Despite general agreement on this matter, research and practice lacks knowledge on how exactly such an alignment can be achieved and what performance implications it has. Therefore, this article empirically investigates the alignment-performance link in PSM in a comprehensive manner. Drawing on the theory of production competence, we suggest that the relative fit between business strategy and purchasing strategy, labeled as strategic alignment, and between purchasing strategy and purchasing practices, referred to as purchasing efficacy, is key to achieving superior financial performance. Results from profile deviation analysis on data collected globally from 141 strategic business units (SBUs) with revenues greater than US$3 billion support our hypotheses. Findings provide clear guidance to managers on how to design their purchasing strategies and practices to achieve maximum alignment and thus to effectively contribute to the SBU's financial success.
Language
English
Keywords
Studies
Supply chain management
Strategic planning
Financial performance
Purchasing
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Wiley-Blackwell
Publisher place
Hoboken, NJ
Volume
44
Number
4
Start page
36
End page
52
Pages
17
Subject(s)
Division(s)
Eprints ID
216622