Purchasing within SMEs - IPSERA 2014 Abstract

 A Conceptual Model & Analytical Framework for Studying

                                          Purchasing & Supply Management within SMEs

The central objective of this conceptual paper is to gain a better understanding under what circumstances purchasing and supply activities within Small & Medium-sized Enterprises (SMEs) are managed.

Purchasing & Supply Management (PSM) within SMEs differs from that in large enterprises. SMEs have different organisational settings and are not small versions of large enterprises. Whilst there is abundant literature on SMEs as well as on PSM, there is only little literature on PSM within SMEs. PSM research within SMEs must consider specific characteristics such as informal organisation, less specialization in business functions and less available resources. SME management focuses more on the overall operations and less on specific business functions. Their approach to inward-bound purchasing and supply activities is often holistic; their approach to outward-bound purchasing and supply activities is characterized by a relative dependent position in supply chains.
This paper proposes a conceptual model to explain the relationship between the governance of purchasing and supply activities and their purchasing and supply performance. The paper adopts the Transaction Cost Theory (TCT) with levels of integration to describe five governance types. To explain the relation between these governance types and performance, the paper includes the TCT-related moderating variables general uncertainty (macro and meso environment) and asset specificity (meso environment). It also introduces the moderating variables SME characteristics and management characteristics and business model. From this conceptual model the paper then develops an analytical framework which describes the five governance types and the circumstances under which they are ideal-typically sustained.  This framework can be used as a segmentation tool.
The conceptual model and analytical framework combine different domains of literature to enhance the understanding of the different forms of purchasing and supply activities within an SME context. Combining these different domains gives beneficial insights that cannot be found in the separate literature domains. In the empirical research the applying model and framework will enable the design of management instruments. Hence this paper forms a starting point for our purchasing and supply management research within SMEs aimed at supporting SMEs in their performance. (Back to posting).

This competitive paper was presented at the IPSERA 2014 conference in South Africa. 
Authors:  Dr. Geoffrey Hagelaar, Professor in Purchasing and Supply Management at Windesheim University of Applied Sciences, Zwolle (NL), email j.hagelaar@windesheim.nl. Mr. Anne Staal BEng MA DMS MBA, PhD researcher at Auckland University of Technology in Auckland (NZ) and senior lecturer at Hanze University of Applied Sciences Groningen, (NLD), email astaal@aut.ac.nz. Mobile phone: 0064 22 38 944 62. (AUT City Campus; WD209; 55-57 Wellesley Street Auckland 1010 New Zealand), corresponding author. Mr. Richard Holman, Assistant Professor in Purchasing & Supply Management at Windesheim University of Applied Sciences, Zwolle, (NL), email rdp.holman@windesheim.nl. Mr. Gert Walhof MBA, Professor in Purchasing Management at Hanze University of Applied Sciences, Groningen (NL), email g.h.walhof@pl.hanze.nl. The research is supported by theDutch  NEVI Research Foundation.