Purchasing alignment under multiple contingencies: a configuration theory approach

Abstract

Purpose – Strategic alignment is a theory-based state that is considered as crucial for organizations in order to realize performance gains from information technology (IT) investments and deployments. Within the domain of purchasing and supply chain management there has been a growing interest on how purchasing strategy can be effectively aligned with IT and what conditions facilitate this state. The purpose of this paper is to investigate complex causal relationships of contingency elements that are key in enabling the “fit” between purchasing strategy and IT. Design/methodology/approach – The paper employs a configuration theory approach and propose that purchasing alignment is dependent upon patterns of multiple contingencies. In adherence with contingency theory, the authors group these elements as relating to strategic orientation, organizational factors, and purchasing decisions. On a sample of 172 international companies the authors then apply the novel methodology of fuzzy set qualitative comparative analysis (fsQCA). Findings – The paper empirically demonstrates that depending on the strategic orientation that a company follows, there are alternative combinations of elements that lead to high purchasing alignment. For companies following an operational excellence strategic orientation, a high contract binding scheme, or a small firm size facilitates purchasing alignment. Enabling elements for product leadership companies include a decentralized purchasing structure, a broad supplier base, and a large firm size. Purchasing alignment for customer intimacy companies is supported by a centralized purchasing structure, loose contract binding, and a large supplier base. Practical implications – The findings of this study suggest that practitioners aiming to attain a state of purchasing alignment should consider a number of contingency elements in the process. The paper shows that there is equifinality in the configurations that lead to purchasing alignment. This means that attaining purchasing alignment is dependent upon various clusters of contingency elements which must be taken into account when formulating a purchasing strategy. Originality/value – In contrast with past studies examining purchasing alignment as a result of the isolated impact of several antecedents, we applied a configuration theory approach to demonstrate that it is facilitated by the combined impact of a set of cause-effect relationships. In cases were non-linear and synergistic relationships exist between independent variables, this type of research may be a viable alternative.