Executive and Purchasing Leadership in Purchasing Change Initiatives

Purchasing management is experiencing extensive change: This statement is supported by a number of observations. First, a major article in Fortune, makes the argument that purchasing is gaining new muscle due to its innovations.[1] A conference in the United Kingdom analyzed purchasing best practices and concluded that many changes occurred in recent years.[2] Smith goes so far as to state that 80 percent of the purchasing tasks delineated under the "traditional role" have been compressed into fewer than 30 percent of the "new role."[3] Research and case documents have thoroughly documented that extensive changes are occurring.[4] Specific research studies have indicated extensive changes in such areas as supplier development[5], total cost management[6], and outsourcing.[7] Changes in buyer-supplier relationships for a number of companies are also well documented in several books and articles.[8] However, a common theme heard from purchasing managers is that these changes are difficult to implement. Of course, this is a common concern of all managers, not just purchasing managers. As a result, research has been conducted and numerous books have been written on change management. No lack of models, prescriptions, and descriptions exist on the management of change. A recurring theme in this literature is that change management efforts must be supported by the organization's top executives.[9] Top management support, however, appears to be a greater issue in the case of purchasing management than other functional areas. One reason for this is that purchasing professionals have not advanced to the executive suite in the same numbers as professionals in other functions. The following are typical comments from purchasing managers: "The CEO doesn't understand what we are trying to do because he has no experience in purchasing." "How can a person from marketing understand purchasing and this company will always be run by marketing people?" "It is difficult to explain our challenges to the V.P. because she just doesn't see the issues." "Banking people don't understand purchasing,"[10] Research indicates that there may be some truth in these comments because top management gives purchasing only limited authority. For instance, research supported by the Center for Advanced Purchasing Studies (CAPS) indicated that many executives believe that, while purchasing is important, it has been given limited support to increase its responsibilities.[11] In another study, a survey of 210 organizations found that the purchasing function can influence at least 18 key decision issues in the organization. However, for only six of these issues did a majority of the organizations' purchasing function have authority to make major changes.[12] Another CAPS study suggests that the purchasing function may lack a strategic orientation because it has limited support from the executive office.[13] Another study concluded that top management provided limited support because it viewed purchasing as rather unsophisticated. But the meaning and nature of the support was not examined.[14] One conclusion from this literature is that purchasing has limited support; however, the type and effect of the support has not been directly investigated. A literature review found no research that directly investigated the relationship between executive leadership and purchasing management change initiatives. A number of recent articles argue for the importance of studying organizational phenomenon within its context.[15] The essence of the argument is that both practitioners and researchers have too frequently attempted to generalize across boundaries that can easily result in erroneous conclusions. Thus, is it not possible to generalize from the general change management literature to purchasing change management? RESEARCH QUESTIONS Because no research has directly investigated the effect and type of CEO support on purchasing change initiatives, the following research question was addressed. …