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Aligning corporate strategy, procurement strategy and e‐procurement tools

Aligning corporate strategy, procurement strategy and e‐procurement tools This paper presents a framework for assessing alignment between corporate strategy, procurement strategy and purchasing tools. The framework is built on generation of rents as its common denominator for assessing alignment between the levels. Three types of rents are identified: monopoly rents; Ricardian rents and entrepreneurial rents. The framework is then used for assessing the strategic origin of the following e‐procurement applications: e‐sourcing, e‐tendering, e‐informing, e‐reversed auctions, e‐MRO, Web‐based enterprise resource planning and e‐collaboration. The results indicate that the e‐procurement tools are fully viable for creating monopoly rents, moderately viable for creating Ricardian rents and only somewhat viable for creating entrepreneurial rents. Therefore, it is necessary to first understand how the firm generates rents before procurement strategy and e‐procurement tools are implemented in order to avoid misalignment. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Physical Distribution & Logistics Management Emerald Publishing

Aligning corporate strategy, procurement strategy and e‐procurement tools

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References (40)

Publisher
Emerald Publishing
Copyright
Copyright © 2003 MCB UP Ltd. All rights reserved.
ISSN
0960-0035
DOI
10.1108/09600030310502894
Publisher site
See Article on Publisher Site

Abstract

This paper presents a framework for assessing alignment between corporate strategy, procurement strategy and purchasing tools. The framework is built on generation of rents as its common denominator for assessing alignment between the levels. Three types of rents are identified: monopoly rents; Ricardian rents and entrepreneurial rents. The framework is then used for assessing the strategic origin of the following e‐procurement applications: e‐sourcing, e‐tendering, e‐informing, e‐reversed auctions, e‐MRO, Web‐based enterprise resource planning and e‐collaboration. The results indicate that the e‐procurement tools are fully viable for creating monopoly rents, moderately viable for creating Ricardian rents and only somewhat viable for creating entrepreneurial rents. Therefore, it is necessary to first understand how the firm generates rents before procurement strategy and e‐procurement tools are implemented in order to avoid misalignment.

Journal

International Journal of Physical Distribution & Logistics Management – Emerald Publishing

Published: Oct 1, 2003

Keywords: Corporate strategy; Purchasing; Electronic commerce; Sourcing

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