The influence of organizational structure on international purchasing success

Abstract

International purchasing is one of the most important strategic topics for managers and attracts more and more interest among researchers. Yet, research often lacks strong theoretical and systematic insights on the intricacies of purchasing success and does not make enough use of advanced empirical methods. We apply a structural equation modeling technique to better research into the intricacies of higher or lower purchasing performance owing to different organizational design choices. We build our model on the resource-based view and on transaction cost economics and make use of survey data of purchasers engaging in international sourcing activities. We find four important drivers of purchasing performance, namely specialization, configuration, standardization and centralization. The importance of these drivers seems to be contingent on the sourcing environments, namely on the characteristics attributed to high cost and low cost countries.