Strategic Purchasing and Performance: the Role of Supply Chain Innovation, Technology Orientation, and R&D Effectiveness

Abstract

This paper illustrates how the Purchasing Department (PD), thanks to its involvement in strategic decisions, can stimulate business performance. In particular, this paper analyses the mediating role of supply chain innovation, technology orientation and R&D effectiveness. Based on a unique survey conducted on 131 Italian firms in the chemical industry, we performed a structural equation modelling path analysis to investigate the path leading to performance. We found that PD, when duly involved, plays a special role by acting as a bridge towards external players (i.e. suppliers and other partners) and, internally, by playing both a bonding (via sharing knowledge and expertise with other firms' departments) and bridging role (via stimulating the firm through innovation and R&D activities).This research provides an integrated view of how involving the PD in the firm's strategic decisions leads to higher organisational performance, thanks to the supply chain, the technology orientation, and the R&D effectiveness.