Developing and Testing a Contingency Paradigm of Group Choice in Organizational Buying

Abstract

The outhors develop a contingency pclrodigm involving two situational factors (the nature of the buying task and the degree of perceived risk) to explain the predictive abilities of seven formal models of group choice and to ree how the mechanism of buying center choice is affected by situation01 foctors. In an empirical test of the mcdels and the paradigm involving 104 procurement decisions made by buying centers, they found that the paradigm dms significantly better than any single model in terms of predicting group choice. The contingency paradigm predicted accurately in 49% of the cases whereas the bast olternotive single model predicted correctly in only 20% of the cases. The results provide empirical suppart for several p r o p asitions in the organizational buying behavior literoture.

Organizational buying as muddling through: A practice–theory approach

“…This undoubtedly gives managers more degrees of freedom when it comes to organizational buying as compared to larger and more bureaucratic organizations. However, it is likely that the existence of and need for muddling through is even stronger in large, publicly listed organizations in which high-commitment buying is commonly subject to joint rather than individual decision-making, and where the required amount of interaction is likely to complicate the process despite more formal operating procedures and control mechanisms (e.g., Grønhaug, 1975;Patton et al, 1986;Wilson et al, 1991).…”

Leadership, the buying center, and supply chain performance: A study of linked users, buyers, and suppliers

“…The buying center's role in providing value in the supply chain and to its participants has assumed an increasing level of importance given the strategic significance of supply chains to organizational success (e.g., Hult, Ketchen, & Nichols, 2002;Hult et al, 2004). The value that the buying center offers to the organization, including its leadership (e.g., Hult, Ferrell, & Schul, 1998), has been argued to have a considerable effect on outcomes (e.g., Krapfel, 1985;Wilson, Lilien, & Wilson, 1991). Well-operating buying centers with appropriate leadership can be a great strategic resource for organizations while dysfunctional buying centers and leaders hinder the effectiveness and efficiency that can be gained from supply chain practices (e.g., Venkatesh et al, 1995).…”

Interrelationships among key aspects of the organizational procurement process

“…Purchase importance is the buyer's assessment of the strategic significance of the purchase-reflecting not only the direct costs of a purchase, but also the impact of the purchase outcome on the buying firm's competitive advantage, strategy, and relationships with its own customers. Purchase importance has been widely discussed in the literature as a key determinant of organizational buying behavior (Cannon & Perreault, 1999;Newall, 1977;Sheth, 1973;Spekman, Kamauff, & Myhr, 1998;Wilson, Lilien, & Wilson, 1991). Nevertheless, although this construct is generally accepted in the literature (and relationships to some other constructs are well documented), it is critical to a complete model of the procurement process.…”