The role of strategic purchasing in dynamic capability development and deployment: A contingency perspective

Purpose: This paper reports on research into the impact of two sequential dimensions of strategic purchasing – purchasing recognition and purchasing involvement – on the development and deployment of dynamic capabilities. We also examine how such dynamic capabilities impact on both cost and innovation performance, and how their effects differ for service as opposed to manufacturing firms.

Design /methodology/approach: We test hypotheses using structural equation modelling of survey data from 309 manufacturing and service firms.

Findings: From a dynamic capability perspective, our analysis supports the positive relationships between purchasing recognition, purchasing involvement, and dynamic capability in the form of knowledge scanning. We also find support for the positive impact of knowledge scanning on both cost and innovation performance. From a contingency perspective, data supports hypothesized differences caused by industry, whereby service-based firms experience stronger positive linkages in our model than manufacturing-based firms. Finally, emerging from our data, we explore a re-enforcing effect from cost performance to purchasing involvement, something that is in line with the dynamic capabilities perspective but not typically addressed in Operations Management (OM) research.

Originality/value: Our research offers a number of theoretical and managerial contributions, including (1) being one of a relative few examples of empirical assessment of dynamic capability development and deployment; (2) examining the enablers of dynamic capability in addition to the more commonly addressed performance effect; (3) assessing the contingency effect of firm type for dynamic capabilities; and (4) uncovering a return (re-enforcing) effect between performance and enablers of dynamic capabilities.

Keywords:
Dynamic capabilities; strategic purchasing; knowledge scanning; contingency perspective; survey