Effect of strategic purchasing, supplier evaluation system and uncertain business environment on supplier-buyer strategic relationship: A structural model

Abstract

In supply management, the supplier-buyer strategic relationship (SBSR) activities are critical elements to a firm's competitive advantage. The purpose of this research is to introduce strategic purchasing (SP) and supplier evaluation system (SES), and uncertain business environmental factors (UBEF) as constructs that could have the potential to contribute to the success of supplier-buyer strategic relationship efforts (SBSR). Based on the relational view of the firm, the authors propose that SP is an antecedent of SES, and UBEF practices and can create value for the buying firm in terms of better purchasing performance. Hypotheses derived from the key features of SP, SES and UBEF practices are tested using structural equation modelling through field research on a sample of 270 senior purchasing executives of 54 manufacturing companies in India. Findings from this study indicate that there is significant evidence to support the hypothesised model in which SP exerts direct influences on SES practices and UBEF, as well as a direct impact on purchasing performance mediated through SES. Copyright © 2012 Inderscience Enterprises Ltd.