Centralized, Decentralized, and Hybrid Purchasing Organizations: What Lies Beyond?

This paper addresses one of the focal issues in purchasing and supply management – global sourcing – from an organizational design perspective. In particular, we elaborate the traditional classification of global sourcing organization designs into centralized, decentralized,
and hybrid models. We illustrate with our empirical analysis on global sourcing organization design at Global Chemical Company (GCC, a pseudonym) that revisiting the conventional wisdom about global sourcing organization designs is required; by engaging in a detailed, subfirm level of analysis on the design of the purchasing organization we can identify organization designs beyond the classical centralization-decentralization continuum. We also provide explanations for the observed organization design at GCC. The study contributes to research on purchasing and supply management as well as research on organization design.