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The Purchasing Function Development Level and
Legitimacy Defended proposal Ready to start data
collection
Raluca Mihaela Stoleru, HEC Montreal raluca-miha
ela.stoleru_at_hec.ca Advisor Alain
Halley Logistics and Operations Management
Department HEC Montreal
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Research question Objectives
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How can we legitimize the purchasing function so
that it could fully develop its strategic
contribution potential? O1 Characterize and
model the relationship between the development
level of the purchasing function and its degree
of legitimacy O2 Develop a decision tree to
help managers diagnose and administer the
legitimacy of their purchasing function O3
Help increase the strategic contribution
potential of the purchasing function
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Methodology
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• Research method
• Case study
• Method of analysis
• Cross-case
• Unit of analysis
• The function or the relationship?

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Expected contributions
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• Theoretical
• The concept of legitimacy - new to the
  Purchasing and Supply Management literature
• Practical
• Proactive approach to legitimacy management
  within the purchasing function

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Gap in the literature
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Taken together, this body of research indicates
that procurement is still considered by many both
within and outside the field to be a routine
function with little relation with organizational
strategy and leadership. Claims that procurement
is now strategic are thus either premature or
perhaps should be limited to some segment of the
field (Snider, 2006 p. 277)
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Gap in the literature
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Some authors have successfully reviewed the
rise and demise of businesses . It is a lot
easier to look at companies that have fallen from
grace and report on their demise. Of greater
interest and managerial value is to able to WARN
OF FAILURE AND AVOID IT before it happens
(Rizkallah et Razzouk, 2007 p. 21)
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Gap in the literature
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More research is needed to explore how the
purchasing function is viewed, along a continuum
from reactive to strategic. It would be helpful
to explore how purchasing views itself, how it is
viewed by top management, how it is viewed by
other functional areas within the firm, and how
purchasing is viewed by suppliers to the firm.
Such a comparison could point out gaps that
purchasing should focus on as it strives to
elevate its role to a strategic level (Ellram
and Carr, 1994 p. 18)
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Our model
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The development levels of the purchasing function
Reck et Long (1988) Passive function Independent
function Support function Reactive function
Our classification
Reactive function Neutral function
Proactive function
Freeman et Cavinato (1990) Buying Purchasing
Procurement Supply
Cousins et al. (2006) Under-developed
function Capable function Strategic
function Celebrity function
Robineau (2006) Basic level Support for
competitive advantage Management of core
competences Purchasing as a core competence
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The legitimacy of the purchasing function
LEGITIMACY

• Status, Prestige,
• Recognition

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What is Legitimacy?
Legitimacy is a generalized perception or
assumption that the actions of an entity are
desirable, proper or appropriate within some
socially constructed system of norms, values,
beliefs and definitions. (Suchman, 1995 p. 574)
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Legitimacy three key aspects(Suchman, 1995
Golant et Sillince, 2007)
Cognition
Evaluation
Social audience
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Legitimacy classifications
Strategic perspective
Internal External
Moral
Cognitive
Kostova et Zaheer, 1999
Pragmatic
Institutional perspective
Suchman, 1995 Scott, 1995, cited in Johnson et
al., 2006a Kostova and Zaheer, 1999
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Key factors influencing the relationship

• The environmental pressures
• The power of the purchasing function
• The strategic alignment of the purchasing
  function
• The intensity of use of legitimation strategies

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Methodological issues

• The unit of analysis
• The purchasing function or the relationship?

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Methodological issues
Are there ways to simplify?
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Contributions
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• Theoretical
• Enrich the knowledge body of Purchasing and
  Supply Management (legitimacy)
• Practical
• Develop a tool for legitimacy management
  (a decision tree)

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Contributions
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Operations Management is an applied discipline,
not a pure science. It follows, therefore, that
if the fruits of our research fail to be
applicable in the real world, then our endeavors
are relegated to the point of being irrelevant.
Galliers et Land (1987), cited in Meredith et
al., 1989, p. 298
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