Procurement & Resource Based View

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Procurement
  is
  An
  Integral
  Part
  of
  Resource-­ Based
 View
 of
 An
 Organization
 

 
 

 
 
  Phuong
 Duong
 

University
 College
 Dublin
 (12251697)
  4112
 words
 
 
  ABSTRACT
 
  Procurement
  has
  become
  an
  increasingly
  widespread
  practice
  among
  organizations
  and
  is
  today
  of
  strategic
  importance
  that
  attract
  great
  interest
  from
  scholars
  in
  the
  literature.
  The
  primary
  purpose
  of
  the
  paper
  is
  to
  contribute
  with
  a
  review
  of
  leading
  studies
  that
  analyze
  procurement
  from
  the
  resource-­‐based
  view
  of
  the
  organization.
  The
  paper
  begins
  by
  setting
  out
  the
  business
  environment
  of
  procurement
  and
  then
  presents
  the
  development
  and
  propensity
 of
 procurement.
 This
 is
 followed
 by
 a
 review
 of
 principal
 works
 and
  differences
 of
 perspectives
 of
 resource-­‐based
 view.
 The
 next
 section
 contains
 an
  analysis
  of
  the
  relationship
  between
  procurement
  and
  resource-­‐based
  theory
  and
 discusses
 empirical
 works
 on
 outsourcing
 that
 address
 outsourcing
 from
 the
  resource-­‐based
  view.
  The
  studies
  are
  classified
  into
  two
  categories:
  those
  studying
 the
 propensity
 to
 procure
 and
 those
 studying
 the
 relationship
 between
  procurement
  decision
  and
  firm’s
  performance.
  Finally,
  some
  insights
  are
  put
  together
  to
  assess
  the
  outsourcing
  decision
  influenced
  by
  resource-­‐based
  view
  with
 the
 aim
 of
 contributing
 to
 a
 better
 understanding
 of
 outsourcing
 and
 its
 role
  from
 the
 perspective
 of
 resource-­‐based
 view
 of
 an
 organization.
 
 
 
  1.
 Procurement
 and
 the
 propensity
 to
 procure
 in
 modern
 business
 context
 
 
  Procurement,
  or
  in
  other
  words,
  “sourcing”,
  for
  years
  has
  become
  “a
  financial
  material,
  but
  strategically
  peripheral,
  corporate
  function”
  of
  an
  organization
  (Gottfredson
  et
  al.,
  2005).
  In
  the
  literature,
  procurement
  becomes
  a
  key
  component
  and
  is
  of
  major
  strategic
  importance
  to
  many
  organizations
  (Humphreys
  et
  al.,
  1998,
  Paulraj
  et
  al.,
  2006).
  Recent
  decades
  have
  witnessed
  significant
 changes
 in
 macro-­‐economic
 trends
 that
 direct
 business
 environment.
  These
  changes
  have
  been
  driven
  by
  increased
  globalization,
  technology
  innovation,
  changing
  consumer
  behaviours,
  and
  consequently,
  a
  shift
  toward
  procurement
  and
  outsourcing
  (Giunipero
  et
  al.,
  2005,
  Giunipero
  et
  al.,
  2006,
  Zheng
  et
  al.,
  2007).
  Gottfredson
  et
  al.
  (2005)
  argued
  that
  globalization,
  accompanied
  by
  technological
  advances,
  is
  causing
  the
  core
  of
  competition
  to
  change.
  These
  days,
  the
  ownership
  of
  capabilities
  of
  an
  organization
  is
  not
 ...
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