Intra-organizational legitimization strategies used by purchasing managers

How to achieve cost savings and strategic performance in purchasing simultaneously: A knowledge-based view

“…Legitimizing strategies depend on the type of internal client and, thus, the attainable performance contributions. In general, purchasing must implement internal collaborative and coordination mechanisms that generate knowledge and capabilities which cannot be easily duplicated by competitors (Tchokogué, Paché, Nollet and Stoleru 2017).…”

Cost Avoidance: Not Everything that Counts is Counted

“…The roles and responsibilities of purchasing have expanded greatly since the function has matured into a recognized profession. Cost saving has long been an important and high visibility priority for the purchasing function (Woodside and Samuel 1981;Ellram 1992;Tchokogu e et al, 2017;Ellram et al 2020). Today, purchasing departments are accountable for both efficiency and effectiveness (Tate et al 2016).…”

“…The influence of reputational concerns or legitimacy on behavior is significant (Raven 1958;Goebel et al 2003;Cavinato 1987;Johnson and Leenders, 2010;Tchokogu e et al, 2017). If other departments perceive that purchasing creates value, then its actions are seen as more legitimate and reputational concerns are reduced (Cavinato 1987;Tchokogu e et al, 2017).…”

“…Companies want to motivate purchasing agents to seek cost saving and better value for the organization (Nollett et al 2008;Pohl and Foerstl 2011). These organizations also want to safeguard the legitimacy of real cost saving that contribute to the organization's success, while preventing the moral hazard of giving credit for savings, when credit isn't due (Mirrlees 1976(Mirrlees , 1999Nollett et al 2008;Tchokogu e et al, 2017). In sum, cost saving are desirable; defining them can be murky.…”

“…Agency theory helps articulate how multiple principal-agent relationships in which a purchaser engages can lead to potential opportunism when the purchaser attempts to achieve and be recognized for cost avoidance efforts (Zhang et al 2015). The issue is that decisions regarding what counts as cost saving (i.e., whether or not cost avoidance is considered cost saving) affects the motivation of the purchasing agent and the legitimacy of the purchasing organization (Melnyk et al 2004, Tchokogu e et al, 2017. The misalignment, or lack of "credit" toward achieving goals may lead to opportunistic behavior, where purchasing agents operate in their own best interests instead of the best interest of the organization.…”