The role of geographical distance and its efficacy on global purchasing practices

Abstract

Purpose The purpose of this paper is to investigate the extent to which the geographical location of and thus the geographical distance between buyer and supplier impact on the efficacy of purchasing practices (i.e. strategic purchasing management, tactical purchasing management, relational purchasing management) in terms of operational performance. Design/methodology/approach The authors utilise cross-country data collected through the International Purchasing Survey group across a variety of countries and industry sectors. The authors conduct exploratory factor analysis to assess construct validity and regression analysis to test the varying effects of purchasing practices on operational performance. The authors split the sample to compare potential differences in the efficacy of purchasing practices between buyers and suppliers through geographical characteristics. Findings The results indicate that the efficacy of purchasing practices does indeed vary depending on differences in geographical location. Specifically, the authors identify that in cases where the buyer and supplier are located in the same country tactical and relational purchasing tools have a positive impact on operational performance. However, in cases where they are situated in different countries none of the purchasing tools seems to significantly improve operational performance. Originality/value Research that has taken a cross-country perspective on the efficacy of supply chain practices is surprisingly sparse. Since most supply chains are becoming more and more global it is important to consider the geographical location of the supply chain members when assessing the performance benefits of supply chain practices such as purchasing tools. Thus, the authors introduce and test the concept of geographical distance on the efficacy of purchasing practices at the dyadic level. To test the implications of geographical distance for purchasing practices the authors use a large-scale cross-country survey.

Archetypes of sourcing decision-making

“…Therefore, the results may be biased; for example, in Eastern Europe, the processes may occur differently, not to mention in an Asian culture. This is in line with previous research has found that the purchasing practices can be influenced by differences in geographical location (Wiengarten and Ambrose, 2017). Thus, future research might thus investigate region-specific factors for the emergence of SDM archetypes, as well as the types of decision-making in smaller companies.…”

Embracing supply base complexity: the contingency role of strategic purchasing

“…In such firms, a large and varied supply base is not purely seen as an administrative burden (Bode and Wagner, 2015; Choi and Krause, 2006), but rather as a strategic asset that reduces dependency and gives more flexibility in case of supply disruptions (Birkie and Trucco, 2020). Furthermore, such a long-term focus requires the adoption of a more proactive approach and having purchasing strategies that integrate risk and uncertainty into supply base management practices (Paulraj et al , 2006; Wiengarten and Ambrose, 2017). Since firms with a strategic purchasing function are more likely to identify SBC as a source of potential supply risk, they are also more likely to develop proactive approaches for managing the challenges of SBC and to assess its impact on a range of performance outcomes.…”

Product recall strategy in the supply chain: utility and culture

“…Applied research in culture has identified the role of national culture in organizational performance and specific organizational actions (Garg and Ma, 2005). This research includes studies regarding the analysis of product recall announcements in the US Food and Drug Administration enforcement report (Cheah et al , 2007) as well as studies suggesting culture impacts whether an organization takes responsibility, offers an excuse or directs the blame elsewhere (Wiengarten and Ambrose, 2017). Mathews et al (2001) note that managerial approaches to problems typically mirror the home culture.…”