The Influence of Organizational Structure Characteristics on International Purchasing Performance in Different Sourcing Locations

Abstract

This study provides a detailed understanding of how firms structure their organization to foster international purchasing (IPP) and firm performance (FP) in different purchasing locations.It proposes a moderated mediation model in which organizational structure characteristics are associated with IPP and FP building on transaction cost economics and the resource-based view. We posit that the relationships are contingent on the national context of the purchasing location.Taking a sample of German firms, we test the model using structural equation modeling. We find that centralization, specialization and configuration are positively associated with IPP which is positively related to FP. The specialization and PP relationship is stronger for purchasing locations in developing countries, while the configuration and IPP relationship is stronger for those in industrialized economies.