Are You Receiving Me? A Viable System Model (VSM) Analysis of Purchasing Coordination in a Firm Engaged in Offshoring of Manufacturing Activities

Abstract

This paper presents an account of the coordination of purchasing activities in a firm that offshored their manufacturing operations that later turned problematic. Empirical data is drawn from a single in-depth case study within a large multinational company which was involved in production offshoring in 2009. The paper draws on the viable systems model (VSM) as the main theoretical lens. First, our findings suggest that purchasing coordination is a loose construct; one in which the role and types of information aggregation in the purchasing process is loosely defined compared to the aggregation of volumes and the effectiveness of sourcing teams. This finding partly explains why many cross-functional sourcing problems occur. Second, that organizational and functional contextual differences can no longer be sidelined in discussions of purchasing coordination because they define how the system’s functions interface and therefore are one of the most essential considerations for better purchasing coordination and ultimately organizational viability.