Strategic alignment and purchasing efficacy

an exploratory analysis of their impact on financial performance

Christian Baier, Evi Hartmann, Roger Moser

Research output: Contribution to journalArticle

97 Citations (Scopus)

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$S3 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.
Original languageEnglish
Pages (from-to)36-52
Number of pages17
JournalJournal of Supply Chain Management
Volume44
Issue number4
DOIs
Publication statusPublished - Sep 2008
Externally publishedYes

Keywords

  • Studies
  • Supply chain management
  • Strategic planning
  • Financial performance
  • Purchasing

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