Evolving Purchasing and Supply Organizations: A Contingency Model for Structural Alternatives

Lydia Bals, Jari Laine, Godfrey Mugurusi

    Research output: Contribution to journalJournal articleResearchpeer-review


    Purchasing and Supply Management (PSM) is under significant pressure to find levers to further increase its contribution to corporate goals. In order to improve performance in line with expectations, Purchasing and Supply Organizations (PSOs) have to evolve continuously. To help address this challenge, a comprehensive contingency framework of PSO structures is presented. The framework is based on existing literature on PSO contingency factors as well as analysis of two case companies. The findings highlight the importance of taking a contingency perspective for understanding the PSO and combining a detailed view of macro-level structural dimensions with micro-level characteristics. These macro-level dimensions comprise category, business unit, geography and activity. The micro-level characteristics comprise centralization, formalization, specialization, participation and standardization. From a theoretical perspective, the contingency framework opens up insights that can be leveraged in future studies in the fields of hybrid PSOs, global sourcing organizations, and International Purchasing Offices (IPOs). From a practical standpoint, an assessment of external and internal contingencies and their relation to specific structural dimensions and characteristics provides the opportunity for more consciously evolving the PSO to continue to improve PSM’s contribution.
    Original languageEnglish
    JournalJournal of Purchasing & Supply Management
    Issue number1
    Pages (from-to)41-58
    Number of pages18
    Publication statusPublished - 2018

    Bibliographical note

    Published online:15. October 2017


    • Procurement
    • Purchasing
    • Supply management
    • Sourcing
    • Purchasing and supply organization (PSO)
    • Structure
    • Design
    • Center of excellence
    • Staff function
    • Line function
    • Centralization
    • Hybrid
    • Global
    • Local
    • Contingency theory
    • Case study research

    Cite this