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Abstract
This paper reflects on purchasing & supply management (PSM) research in an industrial marketing perspective, using Industrial Marketing Management (IMM) as a proxy. A systematic review of IMM papers is conducted, demonstrating that a large and growing number of PSM papers have been published in IMM and that a large proportion of these rely on the IMP Interaction Approach as theoretical perspective. The paper discusses themes of PSM research and proposes three avenues of future PSM research for industrial marketing scholars: 1) theorizing on the concept of supply networks, 2) revisiting the notion of managing supply networks and 3) debate established “best practices” in PSM. The proposal is therefore to dedicate more research to develop further theory on supply networks and how to manage within supply networks, because there is a surprising lack of conceptual clarity as to the meaning of supply networks and the notion of managing supply networks. The paper argues that as increasing supply net- work complexity and risks, especially concerning sustainability, requires new thinking about how best to in- fluence and manage supply networks.
Purchasing and Supply Management (PSM) has changed from a tactical to a strategic function in many companies. This change has been in response to a recognition of the large proportion of value that stems from the supply chain, a trend that has increased in recent years as a consequence of outsourcing and which is widely seen as necessitating a mature PSM function dedicated to contributing to overall company value creation rather than merely aiming for cost savings.
Reflecting this trend in practice, PSM has also grown in academic standing to the extent that many universities and business schools now offer specialized (e.g. masters) degrees in PSM. Moreover, where PSM research used to be regarded as unserious and unworthy of publication, it is now widely seen as an emerging academic discipline (Harland et al., 2006) although still struggling to establish itself as truly in- dependent. Often, PSM continues to be considered part of the wider field of supply chain management (SCM) (Larson & Halldorsson, 2002), industrial organization or even industrial marketing. PSM seems to be in a never-ending identity crisis, fighting for recognition among its more established peers.
Industrial Marketing Management (IMM) is naturally dedicated to industrial marketing but considers PSM (and SCM) to be without the scope of the journal. In fact, as this paper will demonstrate, a large and growing number of PSM papers have been published in IMM to date, suggesting an increasing focus on PSM within the bounds of industrial marketing research and more widely. This paper discusses the evolution of PSM research, comparing PSM research published in IMM with PSM research in general i.e. published elsewhere. So, using IMM as a proxy for an industrial marketing perspective on PSM research, this paper reflects on PSM research in an industrial marketing perspective and offers avenues for future PSM research in an industrial marketing perspective. These avenues concern theorizing on the concept of supply networks, revisiting the notion of managing supply networks and de- bating established “best practices” in PSM.
The paper begins by providing a brief systematic literature review of PSM research published in IMM, giving an overview of the number of PSM papers published since the journal beginnings in the 1970s and an analysis of theoretical perspectives and how these have changed over time.1 The systematic review provides the basis for a discussion of theoretical debates that have appeared in IMM including an evaluation of recent trends. A comparison with dominant themes in the wider PSM literature is then made to propose future avenues of PSM research in IMM.
With PSM struggling to be viewed as a serious academic discipline (Harland et al., 2006), it is hardly surprising that there is a relatively low number of journals that publish PSM research. Zsidisin, Smith, McNally, and Kull (2007) showed that Industrial Marketing Management is a key journal target for PSM scholars. Where the Journal of Supply Chain Management and Journal of Purchasing and Supply Management are specialized PSM and SCM journals, Industrial Marketing Management is a journal that is open to PSM papers albeit without being a specialized PSM journal. Given the strong reputation and ranking of Industrial Marketing Management, PSM researchers have long considered the journal an important target. Fig. 1 shows an increase in PSM papers published since the early 1970s. However, with an increasing number of total Industrial Marketing Management publications (four annual is- sues from 1971 to 1995; then six annual issues until 2001; eight annual issues since 2001), this growth needs to be seen in the light of the overall increasing volume of publications in this journal as across the field in other journals. Nevertheless, this shows a gradual increase in IMM publications focusing on PSM with peaks often explained by special issues dedicated to PSM-related topics.
Focusing on papers published since 2000, Fig. 2 shows that a large proportion of PSM papers published in IMM is based on an Industrial Marketing and Purchasing (IMP) (Håkansson, 1982; Håkansson & Snehota, 1995) perspective. In fact, out of 155 papers 47 applied explicitly or implicitly an IMP perspective, referring varyingly to this as an interaction, industrial network, or IMP approach. This demonstrates the popularity of IMP especially when comparing with otherwise dominant theoretical perspectives in PSM research i.e. transaction cost economics (TCE) (e.g., Williamson, 1975), the resource-based-view (RBV) (e.g., Barney, 1991; Wernerfelt, 1984), and knowledge-based view (e.g., Nonaka & Takeuchi, 1995). To put this into perspective, Spina, Caniato, Luzzini, and Ronchi’s (2013, 2016) large cross-journal reviews of PSM literature found a strong reliance on TCE, RBV, the knowledge-based view and recorded no IMP-based papers. This is partly as a result of their focus on ‘grand theories’ (Spina et al., 2016), where IMP was not classified as such, but this picture still puts the widespread use of IMP in PSM papers in IMM into perspective. It is worth noting here also that many papers do not rely on a single theoretical perspective and often combine two or more, or authors may adopt, for example, an IMP conceptual framework and use these to interpret an empirical study but view their conceptual framework as founded on a more fundamental or grand theory underpinning the IMP perspective, such as resource dependence theory (Pfeffer & Salancik, 1978). What- ever the counter-arguments against classifying IMP at the same theoretical level as more widely accepted theories, such as resource-based view, or resource-based theory (Barney, 2012), the fact remains that IMP has a significant conceptual and theoretical stronghold over IMM PSM papers and this clearly characterizes IMM PSM papers, as discussed later.
What may strike PSM scholars is that a relatively large proportion of papers build on what can best be described as general business-to- business (B-to-B) marketing literature; these tend to focus exclusively on a sales and marketing and, in reality, are concerned with down- stream customers rather than suppliers. They also do not take a theoretical stance but are usually more driven by a practical agenda. It is worth pointing out that many papers are similarly positioned in PSM or SCM literature, reporting research based on, for example, Kraljic’s (1983) well-known purchasing portfolio models (Caniëls & Gelderman, 2007; Wagner & Johnson, 2004); these tend not to claim a theoretical perspective even if they may, of course, be well-positioned in the literature.
Closely related to the B-to-B marketing perspective, many papers adopt a relationship marketing (e.g., Grönroos, 2011) and/or relationship value (Ulaga, 2003) perspective. Where the B-to-B perspective has little to offer PSM researchers, as it is almost exclusively viewing customers (i.e. purchasers) from a sales and marketing perspective, the concept of relationship value is of more universal relevance to the management of both downstream customer and up- stream supplier relationships. The focus on value rather than cost savings resonates with PSM scholars as contributing to value is associated with strategic and mature PSM (Chick & Handfield, 2014). The relationship value concept offers a novel perspective for PSM scholars and practitioners as value is traditionally related to the value of purchases rather than (supplier) relationships. IMM papers have therefore made important contributions to advance this perspective.
Lastly, it may come as a surprise that there are almost as many papers that adopt a relatively old-fashioned organizational buying behaviour (Webster & Wind, 1972) lens as there are papers adopting a TCE lens. Where the organizational buying behaviour models exerted influence on early PSM literature they are clearly developed from the perspective of sales and marketing with a view to identifying the right decision-makers within customers. They continue to be cited in a relatively large number of IMM PSM papers, perhaps indicating their seminal status.
Table 1 gives an overview of some of the major themes that have been tackled in IMM papers with a PSM focus. These are briefly dis- cussed in the following.
One theme is purchasing-marketing integration, which has war- ranted two special issues in IMM (Ivens, Pardo, & Tunisini, 2009; Lindgreen et al., 2016). The 2009 special issue (Vol. 23 No. 2) focused on organizational issues concerning purchasing/marketing integration, the rationale behind this that the “topic of organization [within business-to-business exchanges] remains desperately under-researched” (Ivens et al., 2009, p. 852). A central theme across the 2009 papers was the need for a change in focus in both marketing and purchasing from the view of buying and selling goods to buying and selling capabilities. The 2016 special issue (Vol. 52 No. 1) edited by Lindgreen, Campelo and Angell goes further in exploring the purchasing-marketing inter- face. A central theme here is the potential value creation and value capture from better purchasing-marketing coordination and ‘co-management’ (Toon et al., 2016). This goes into more depth with organizational design issues in discussing specific ways to combat silo structures and achieve integration and co-management of purchasing and marketing through, for example, inter/cross-functional teams (see also Wynstra et al., 2003) and matrix-type structures.
An important area of potential value creation derived from marketing-purchasing integration concerns new product development (NPD) and innovation projects (Gonzalez-Zapatero et al., 2016). IMM has published several articles dedicated to this theme, examining the involvement of suppliers in NPD (Melander & Lakemond, 2015) with some research devoted to the role of the purchasing function in facilitating supplier involvement projects (Luzzini et al., 2015; Wynstra et al., 2003). Although research on (early) supplier involvement in NPD has a long track record (Johnsen, 2009), research on how to organize internally for managing these projects, including the role of purchasing and marketing, is far less developed (Luzzini et al., 2015).
Another theme relates to purchasing of services, including marketing services (Bals et al., 2009; Tate et al., 2010). The trend towards servitization of products (Araujo, Finch, & Kjellberg, 2010) and sup- pliers as full-service or systems providers (Lindberg & Nordin, 2008; Stremersch et al., 2001), has blurred the boundaries between products and services with strong implications for both marketing and purchasing. One of these is that purchasing of services requires an under- standing of interaction processes and buyer-supplier relationships (Lian & Laing, 2007; van der Valk, 2008) and IMM has been instrumental is pushing this research agenda. A core reason for this is the prevalent, if not unique, use of the IMP Interaction Approach that characterizes IMM PSM papers. With services characterized by simultaneous production and consumption, purchasing tasks, especially specification and evaluation, pose particular challenges (Ellram, Tate, & Billington, 2004) that can usefully be addressed through an Interaction Approach (Araujo et al., 2010; Axelsson & Wynstra, 2002).
The final major PSM theme that emerged from this analysis of IMM papers, is networks. More a concept than a theme, networks have provided the conceptual framework for the study of a range of industrial customer and supply market issues, including network change and dynamics (Håkansson & Waluszewski, 2013), implementation of sustainability (Crespin-Mazet et al., 2015; Meqdadi et al., 2017), and strategizing (Öberg, 2010). These studies share a common assumption that markets, be they customer or supply markets, are not ‘something out there’ but inter-connected or interacted through network relationships i.e. an understanding of markets as networks (Abrahamsen & Håkansson, 2015). As will be argued in the next section, there is still much scope for using the network concept, including its foundations in customer-supplier interaction processes and relationships, to advance supply network theory.
Overall, PSM research published in IMM can be characterized by being heavily guided by an IMP interaction perspective. This would appear to contrast with the use of theoretical perspectives in PSM in other journals that rely more on TCE and RBV. Where TCE and RBV are theories with a much wider foundation in strategic management, and sometimes regarded as external grand theories (Spina et al., 2016), IMP is closer to an internal PSM theory (Chicksand, Walker, Radnor, Watson, & Johnston, 2012). The IMP Interaction Approach also sits more comfortably with many PSM scholars who struggle, in particular, with the behavioural assumptions of TCE that lend support to opportunistic buyer and supplier behaviour that runs counter to how the field has progressed since the 1990s (Lindgreen, Vanhamme, van Raaij, & Johnston, 2013). The focus on long-term buyer-supplier relationships, or partnerships, which emerged both in research and in practice during the last 25 years or so (Lamming, 1993), is generally seen as an indicator of strategic PSM. PSM maturity models, dating back to Reck and Long’s (1988) seminal model, associate the sort of behaviour prescribed by TCE with a low level of PSM maturity in contrast with collaborative supplier relationships that indicate mature, strategic PSM functions that contribute to overall competitive advantage and corporate value creation (Chick & Handfield, 2014). With an increasing research focus on collaboration, for example in relation to innovation and sustainability, IMP arguably provides a much better fit than TCE for making sense of strategic PSM behaviour and practices.
Based on the brief review of theoretical perspectives applied in IMM papers and prominent themes, a picture of PSM research published in IMM begins to take shape. On the one hand, this stream of research in IMM has made valuable if not unique contributions to the PSM field. On the other hand, there is scope for further development, in particular, to contribute to further theoretical development in the area where IMM PSM research is clearly strongest: on buyer-supplier relationships and networks. This paper proposes three inter-related avenues of research into this subject.
With PSM closely linked to SCM (Larson & Halldorsson, 2002), PSM needs to play a key role in the management of supply chains and net- works. Both PSM and SCM research recognize a need to focus not only on supply chains but also on wider supply networks. This is not least driven by a recognition that many risks and opportunities exist in distant supplier relationships, for example concerning sustainability (Miemczyk, Johnsen, & Macquet, 2012) and innovation (Yan, Choi, Kim, & Yang, 2015). Where PSM has traditionally limited its attention to the management of immediate (first tier) PSM has gradually shifted its attention from managing dyadic supplier relationships to supply networks. Industrial marketing researchers are well-positioned to con- tribute to the development of supply network theory, using the IMP Interaction Approach to provide much needed conceptual clarity.
Where IMP scholars originally referred to industrial networks (Easton, 1992; Håkansson, 1987) or business networks (Håkansson & Snehota, 1995), the concept of supply networks is rarely used by IMP scholars. This might indicate a preference for conceptual consistency or perhaps an unwillingness to embrace a concept with roots in supply chain management. However, recent theoretical developments within supply chain management acknowledge that supply chains need to be understood as networks (Carter, Rogers & Choi, 2015) although this theoretical development has been a long time coming and yet it remains unclear what supply networks are even at a fundamental level.
Tracing the supply network concept to its roots, one finds that apparently the first author to propose the concept of supply networks as an alternative to supply chains was Harland (1996). Her definition of supply networks referred to a set of supply chains involved in the production and supply of a particular product or product family, incorporating links between, or across, individual supply chains. Borrowing concepts from the IMP group (e.g. Håkansson, 1982, 1987), Harland (1996) proposed the concept supply network to focus on the implications of inter-connections of individual relationships and chains and to provide a more holistic picture of the system and process of supply.
As an extension of supply chains, Harland’s (1996) conception of supply networks included not only the upstream supplier network but also the downstream distribution or customer network, the logic being that, as with supply chains, the supply network is defined from the perspective of the end customer. However, definitions of supply net- works, in particular in relation to whether or not they include only upstream supplier relationships or also include downstream distribution or customer relationships, remain unclear and often simply taken for granted.
Braziotis, Bourlakis, Rogers, and Tannock (2013) make a rare at- tempt to identify the differences between supply chains and supply networks. Building extensively on IMP literature, they align their view with Harland’s (1996), arguing that “Essentially, a [supply network] is a web of [supply chains] and associated satellite companies, with enhanced complexity of inter-firm relationships where power aspects and relationship management among members emerge as key difficulties in managing the network.” (p. 648). They make a key distinction between supply chain actors being active whereas supply network actors include both active and inactive actors. However, their definition does not clarify the upstream or downstream nature of supply networks. Choi, Dooley, and Rungtusanatham (2001) define a supply network purely in terms of the upstream (supplier) network:
“A supply network in this regard includes all companies that take part directly or indirectly in supplying industrial inputs to a focal company with or without that company’s knowledge.”
Discussing the differences between the supply base and the supply network, Choi and Krause (2006) go further to explain that the supply network refers to “All inter-connected companies that exist upstream to any one company in the value system”, and the supply base is “a portion of the supply network that is actively managed by the focal company through contracts and purchasing of parts, materials, and services” (p. 638). Again, supply networks are defined as existing purely upstream in clear contrast with other research (Harland, 1996; Lamming, Johnsen, Zheng, & Harland, 2000) that takes both an upstream and downstream perspective. There is therefore a need for definitional clarification and discussion of the concept of supply networks.
In addition, defining supply networks in terms of traditional supply chains actors may be too narrow as more stakeholders become closely involved in sourcing and supply processes. Johnsen, Miemczyk, and Howard (2017) call for re-conceptualization of the supply network concept, arguing that stakeholders need to be included as these increasingly put strong pressures in and sometimes perform important roles in, for example, conducting supplier sustainability audits. These include stakeholders that are traditionally classified in stakeholder theory as secondary i.e. focal supply network actors are not engaged in transactions with these but they can affect, or are affected by these, for example, non-government organizations (NGOs), neighbouring communities, and social activists (Ehrgott, Reimann, Kaufmann, & Carter, 2011; Hall & Matos, 2010). Reconceptualizing supply networks there- fore requires inclusion of actors that might be considered traditionally as ‘non-business actors’ (Crespin-Mazet & Dontenwill, 2012).
The next avenue of PSM research with an industrial marketing perspective follows from the need to better define and conceptualize supply networks and concerns the ability to manage supply networks. Originally research on networks conducted by the IMP group was largely conceptual and provided little managerial guidance as to how to create and manage networks. This is a theme that has been addressed by IMP researchers in more recent years (e.g. Ford & Håkansson, 2002), although the fundamental assumption of the IMP Interaction Approach is that companies do not manage networks although they may manage within these.
This has long been a somewhat controversial issue in IMP, that is, IMP researchers generally hold that it is not feasible to manage net- works in contrast to other research, such as strategic management (e.g. Jarillo, 1988; Dyer & Nobeoka, 2000), which appears to assume that networks are manageable. Usually, this is caused by different ways of using the concept of networks (Johnsen, Lamming, & Harland, 2008). As IMP researchers use the network concept as a means to construct a better understanding of the organizational context (a markets-as-net- works perspective), it makes little sense to talk about network management. Then, management becomes a question of interacting with a multitude of direct and indirect network actors and coping with their actions. In contrast to those who use the network concept to refer to a wide coalition of companies, or an extended enterprise (the networks- as-organizations perspective), the question of network management is entirely different; visualizations of networks as hierarchies (as evident also in supply chain management) and the use of language such as network design and control is hardly surprising. Although IMP re- searchers were initially very reluctant to embrace the concept of supply chain (management), Gadde and Håkansson (2001) did in fact embrace the term supply networks in their book on ‘Supply Network Strategy’, discussing issues such as supply network design.
Research by supply chain management scholars (e.g. Choi et al., 2001; Choi & Krause, 2006) have discussed the question of supply network control versus emergence, conceptualizing supply networks as complex adaptive systems (CAS). Their conceptual framework incorporated three foci: co-evolution, internal mechanisms and environment. Drawing from complexity theory, Choi et al. (2001) use many of the same concepts as IMP researchers to frame supply networks as CAS. Arguing that supply networks are self-organizing structures that emerge rather than being deliberately designed and controlled by individual supply network actors, they echo the assumption and core message that has long been argued by the IMP group (e.g. Ford & Håkansson, 2002; Håkansson & Snehota, 1995) that networks do not develop by design and cannot be controlled or even managed by individual actors that can merely cope within networks. Indeed, Choi et al. (2001) state that:
“We propose that many supply networks emerge rather than result from purposeful design by a singular entity. Imposing too much control detracts from innovation and flexibility; conversely, allowing too much emergence can undermine managerial predictability and work routines. Therefore, when managing supply networks, managers must appropriately balance how much to control and how much to let emerge.” p. 351.
Instead, each supply network actor or node may attempt to manage a portion of system but has to accept that distant parts of the network are essentially given (Carter et al., 2015). One difference with the IMP perspective, as reflected in Ford and Håkansson (2002), is that where they argue that the more a company attempts to control the network in which it is enmeshed, the less effective the network may be, Choi et al. (2001) argue that both emergence and control are necessary.
Another subtle difference between Choi et al.’s (2001) framework and the IMP model is that where IMP views the environment as ‘in- teracted’ (according to the markets-as-networks perspective), Choi et al.(2001) state that the environment exists external to the supply network and consists of agents and their interconnections that are not part of the given complex adaptive system. Nevertheless, they do state that the boundary between the supply network and the environment is fluid and that changes in CAS occur through alterations in the boundaries, as agents are included or excluded, and that such change alters the un- derlying patterns of interaction. Where IMP research makes a point of boundaries being interacted and fuzzy (e.g. Cova, Mazet, & Salle, 1998), Choi et al. (2001) do not go so far as to say that it is enacted (Weick, 1979).
The next proposed avenue of research also concerns the ability of actors to manage (within) supply networks but here the focus is on debating specific ‘best practices’ within PSM that assume a high degree of actor ability to manage and control other actors. This assumption seems to work both ways: marketing assuming passive buyers and PSM assuming passive suppliers.
Despite advances in marketing research the number of IMM papers that continue to rely on models of organizational buying behaviour (Webster & Wind, 1972), suggests that the assumption of customers as passive actors waiting to be targeted by active suppliers still prevails in much industrial marketing research. From a PSM perspective, this assumption is somewhat surprising as PSM research tends to regard PSM functions as the active agents facing passive suppliers.
The IMP Interaction Approach views both buyers and suppliers as active – or interactive – yet both industrial marketing and PSM research and so-called ‘best practice’ seem to hold on to an assumption of active actors managing passive actors. One might even go so far as to suggest that a range of PSM best practices assume sovereign buyer power to manage suppliers. Consider such practices as supplier selection (de Boer & van der Wegen, 2003), supplier development (Wagner, 2006) or simply supplier management: these assume that buyers are in a position to freely select and control their suppliers. Often these are derived from studies of large manufacturers, such as Toyota, that hold a strong power advantage over suppliers (Womack, Jones, & Roos, 1990). With roots in performance measurement and management, supplier management practices take a one-sided view of power and control in buyer-supplier relationships (Johnsen et al., 2008).
If anything, the IMP Interaction Approach has sometimes over- played the assumption of the lack of ability of individual actors to in- fluence other actors and that actors can merely cope (Håkansson & Snehota, 1995). More recent IMP research focuses on the market shaping actions a buying firm can make and that such actions are not the exclusive domain of large powerful firms (Ulkuniemi, Araujo, & Tähtinen, 2015). Even relatively small buying firms might exert influence over their suppliers and wider supply networks by joining forces with others. Where in the past PSM functions could possibly get away with not managing their supply networks, they can ill afford not to try to do so these days as many stakeholders now hold companies ac- countable for even sub-tier supplier activities (Krause, Vachon, & Klassen, 2009). This is particularly true when it comes to ensuring compliance with sustainability regulations and policies, as a wide range of environmental and social risks exist within supplier operations that companies previously would not have known the existence of and certainly would not have thought to take responsibility for. Such elevated supply network risks, especially those concerning sustainability, seriously question the validity of the assumption that companies cannot or should not seek to manage their supply networks. There is scope for more research and debate not only on established best practices in PSM that tend to assume sovereign power and control over suppliers but also a critical evaluation of IMP research into the possible supply market shaping and influencing actions a buying firm can undertake (e.g., Araujo et al., 2010
An analysis of theoretical perspectives applied in IMM PSM-related papers revealed a very strong reliance on the IMP Interaction Approach. This is in stark contrast to PSM papers published in other journals (Spina et al., 2013, 2016) and suggests a special character of PSM re- search in IMM. Where dominant theoretical perspectives in PSM re- search are TCE (e.g., Williamson, 1975), RBV (e.g., Barney, 1991; Wernerfelt, 1984), and the knowledge-based view (e.g., Nonaka & Takeuchi, 1995), relatively few papers in IMM build on these perspectives.
In some ways, this may not be entirely surprising because the Interaction Approach fits theoretically very well with recent developments in PSM, especially given the strong focus of the Interaction Approach on providing frameworks to understand the nature of long- term buyer-supplier relationships and the embeddedness of these within networks. In fact, SCM theory is emerging that conceptualizes supply chains as networks (Carter et al., 2015), suggesting that not only PSM but also SCM is embracing network theory. However, IMP scholars could do more to engage in conceptual debate concerning PSM and SCM.
This paper therefore proposed three avenues of research that could serve this purpose: 1) theorizing on the concept of supply networks, 2) revisiting the notion of managing supply networks and 3) debating established ‘best practices’ in PSM. Given the central role of networks within emerging SCM theory, there is a surprising lack of conceptual clarity as to the meaning of supply networks where some view supply networks in purely upstream terms but others define networks from an end customer perspective i.e. covering both upstream and downstream relationships. Furthermore, it is argued that new conceptualizations of supply networks are required as these become increasingly complex. This is partly due to the rise of supply network risks, especially con- cerning sustainability, which in turn also requires new thinking about how best to influence and manage supply networks. IMP has traditionally been reluctant to accept that there is a need to manage net- works, or even parts of networks, but would do well to engage in, or even lead, future research on what and how supply network actors can best manage within an increasingly complex and risky supply network context.
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