Organizational Buying Research Articles

Artificial intelligence advancements in procurement: transforming organizational buying behavior

PurposeThe purpose of the paper is to discuss the potential of AI to impact organizational buying behavior. Potential impacts on organizational communication, Organizational Buying Center (OBC) structure and dynamics are discussed.Design/methodology/approachThis research is conceptual in nature and uses narrative literature review to develop testable propositions derived from a technology overview and incorporates existing organizational buying behavior theory.FindingsThe article's conclusion suggests that significant changes are likely due to the adoption of AI. The nature of organizational buying is anticipated to undergo a shift toward increased reliance on AI-generated input. Additionally, it is expected that the size of OBCs may decrease, with reduced vertical and lateral involvement, while promoting greater coordination and less conflict among members.Originality/valueThis paper aims to conceptualize the effects of AI technology adoption on organizational buying situations and the structure and dynamics of OBCs. For practitioners, this conceptualization may equip them to navigate the impacts of the AI technological advancements effectively.

Drivers of industrial sales performance in the agent-buyer chat channel: The role of social and functional content, message valence, and synchronicity

With retailers increasingly taking an omnichannel approach to customer engagement, the online chat has become a strategic communication platform for salesperson-organizational buyer interactions. In this research, we explore chat messages between sales agents and organizational buyers to identify which attributes are more likely to increase sales outcomes (B2B segment). Drawing from social response theory and media synchronicity theory, we develop hypotheses to understand how message content (social versus functional), message valence (positive versus negative), and message progression (synchronicity, or time between responses, and response proportion, or ratio of words typed for salesperson-buyer interactions) influence sales revenue, sales frequency, and sales conversion rates. We test this phenomenon within an auto-manufacturing firm over 714 days, where 19,817 chat conversations yielded 3433 sales. The results show that social content increased sales revenue and sales conversion rates while functional content influenced frequency. Positive message valence influenced all three outcomes while negative valence increased conversion rates. Finally, shorter response times and replies were shown to positively influence organizational buyer purchase behavior. These findings offer implications for sales organizations utilizing live sales agents in their chat platforms and present avenues for future research in this domain.

Customer equity drivers and repurchase intent among B2B customers: the moderating role of perceived switching cost

Purpose This study aims to investigate the role of three customer equity drivers on customer repurchase intent in business-to-business (B2B) markets. It also explores the interconnected nature of equity drivers, specifically, the effects of brand equity and value equity on relationship equity. Further, it investigates how perceived switching costs moderates the interrelationships between customer equity drivers. The authors explore the interrelationships between the customer equity drivers in a B2B context involving commodity products in a developing market. Design/methodology/approach Data collection was done from a pool of 184 institutional customers of a lubricant brand in a developing market. The sample had representations of buyer organizations across sectors, namely, automobile, cement, metal, fertilizer, railway, defence and mining, etc. The final data were subjected to partial least squares-based structural equation modeling to test the hypothesized model. Findings The study found a direct effect of brand equity, and value equity on relationship equity and an indirect effect on repurchase intent, namely, relationship equity. Perceived switching cost was found to moderate the interaction between brand equity and relationship equity as well as between value equity and relationship equity. The direct effect of relationship equity on repurchase intent was also significant. Practical implications The study implies that B2B firms should ground their marketing program on these customer equity drivers, especially when dealing with commodity products. The absence of any of these drivers would be detrimental in customer retention. The study also establishes the relevance of switching cost(s) and its impact on the underlying dynamics between the different equity drivers in the context of commodity products. The customer equity drivers along with switching costs, if managed well, may become switching barriers for customers and eventually would ensure recurring revenue through repeat purchases. Originality/value To the best of the authors’ knowledge, this is one of the first studies that focuses on the disaggregated effect of customer equity on customer outcomes in the B2B context. Furthermore, this study investigates how perceived switching costs moderates the interrelationships between customer equity drivers in the industrial sales context in an emerging market.

The Window of Opportunity

Abstract This article explores UK bookselling in terms of the retail buying functions, promotional activity, merchandising, and stock management processes commonly adopted. The business structures and mechanisms that dictate organizational book buying in the UK market are also explored in terms of the time allowed for titles to succeed or fail. These very practical and logistical aspects of retailing are brought to life by the qualitative data obtained through seven semi-structured interviews in 2018–2019. The sample represented actors across the UK publishing industry supply chain but focused predominantly on the book buyer function. This research finds that the sale-or-return purchasing model, prevalent in the UK book trade, plays a crucial role in dictating the window of opportunity for books to succeed or fail; the book-buyer gatekeeper function is pivotal and highly sensitive to local demand; and that local demand is fulfilled through the curation of predictable or proven products in combination with novel or speculative products – the level of purchasing risk is dependent on retail location and footfall. These findings are aligned with organizational buyer behaviour, retail location theory, and buyer behaviour theory.

MARKETING MANAGEMENT AND MEASURES TO REDUCE PERCEIVED RISK IN BUSINESS: AN ANALYSIS OF INTERCONNECTION

The research results on the interrelation between marketing management strategies and measures for reducing perceived business risk have been presented. An analysis of existing scientific literature has revealed a lack of studies concerning theoretical and methodological approaches to reducing perceived business risk. The aim of this article was to investigate the correlation between marketing management strategies and measures aimed at mitigating perceived business risk. The following methods were employed during the research: comparative analysis, synthesis, generalization, graphical representation, and economic-statistical analysis. Considering one of the objectives of marketing provision for risk-mitigation measures, which involves customer-oriented approaches, and taking into account the specific nature of the research subject, the article examines possible attitudes of organizational buyers towards perceived risk based on the expected utility from purchasing industrial goods. The article proposes a general view of the relationship between perceived risk and consumer value, modifying a well-known utility function for expected income and presenting the author’s conclusions. It was found that an organization-buyer is inclined towards risk when it gives preference (over risk) to higher product value compared to guaranteed, yet lower consumer value. For risk-neutral organizational buyers, an increase in perceived risk corresponds to an increase in consumer value. Conversely, risk-averse organization-buyers respond strongly to perceived risk and prefer products in which they are confident to avoid risk. The proposed function establishing the relationship between perceived risk and consumer value, modified to incorporate the utility function for expected income, offers strategies for implementing risk-mitigation measures aimed at reducing risk for specific groups of business-to-business (B2B) organizations in the market. For risk-averse organizational buyers, measures such as marketing research, test sales, financing through credit or leasing, which focus on risk identification and control, should be undertaken. Therefore, reinforcing marketing measures should be applied to persuade risk-averse or neutral organizational buyers of the benefits of purchasing. The proposed function depicting the dependency of perceived risk on consumer value, modified to account for the utility function for expected income and conclusions, allows for segmenting organizational buyers based on their level of consumer risk. This will be valuable for forming and implementing risk-mitigation measures within enterprises, as it enables the consideration and reduction of risks for industrial consumer goods. Further scientific investigations will be directed towards developing a methodological approach to evaluating the levels of perceived risks in online purchases.

Measuring the Effects of Pressure on Consumer Impulse Buying Intention in Online Group Buying

Group buying organizations (GBO) have recently stepped up their well-established practice of employing super-low prices combined with limited product and service supply in a short transaction time span as a means of exerting pressure on consumers. The purpose of this research is to 1) identify and define three types of pressure that are triggered by online group-buying (OGB) promotions, 2) examine the effects of these three types of pressure on consumers' impulse buying behavior, and 3) investigate and produce knowledge about the mediating role of emotion in the relationship between pressure and impulse buying intention (IBI) of consumers. By integrating stimulus-organism-response (SOR) model and consumer impulse buying literature seen from the perspectives of marketing and enterprise information systems respectively, this research has identified three types of pressure (i.e., time pressure, quantity pressure, and price pressure) that influence the impulse buying behavior (IBB) of consumers regarding OGB. The research then examines the mediating role of emotion with reference to pleasure and arousal level. The results of a large-scale online survey combined with an analysis of a structural equation model demonstrate that the above-mentioned three types of pressure have different effects on IBI of consumers. Moreover, the research finds that this is achieved through different mediating mechanisms. Based on the results of the analysis, the authors have made some suggestions that marketers can utilize in developing effective OGB strategies. This research also provides the basis for enterprise information systems (EIS) to develop technologies that will allow organizations to better serve the needs of their OGB customers.

How online information search behavior and the role of tacit knowledge differ across clusters of purchase situations

Online information sources increase the amount of information that is available for purchasing managers in a particular purchasing situation. Yet, how buyers make use of that information and thereby rely on tacit knowledge is theoretically still poorly understood. This paper relies on 40 qualitative in-depth interviews with purchasing managers from different manufacturing industries. Whereas previous research mainly considered the purchasing organization or the purchasing department as the unit of analysis, we are able to provide a finer-grained understanding by zooming-in on separate purchasing situations and employing a quantitative method to cluster these. We find that online information search is differentiated in terms of its extent and role. It is particularly relevant in buying situations characterized by high novelty, while at the same time, these can have either high or low levels of risk, complexity, and importance. We also find that the role of tacit knowledge is differentiated. Across different purchase situations, this provides various kinds of support to purchasing managers to identify, retrieve and use information. Sometimes tacit knowledge aids speed and efficiency of decision-making, but in other clusters, it helps to deal with large amounts of complex information. Furthermore, purchase situations can be distinguished as to whether tacit knowledge is based on accumulation of experience with similar buying situations versus broader purchasing experience.

Credibility and price premium-based competitiveness for industrial brands

Extant research on brand competitiveness concentrates on the B2C contexts, yet it remains poorly understood in the B2B contexts, especially for industrial brands. This current research aims to investigate how seller credibility potentially drives organizational buyers' willingness to pay price premiums (WTPP) through customer-company identification and buyer long-term orientation. In particular, we argue that buyer WTPP represents the industrial brands' competitiveness since buying firms express such strong preferences for the industrial sellers’ products and services compared to competitors that they are willing to pay price premiums. Based on data from 454 US-based industrial buyers, our findings generally support the proposed hypotheses. Our research sheds light on how industrial sellers can build their brand competitiveness. Actionable insights for research and managerial practice are provided.

How boundary spanners wield influence by involving a third person: an exploratory study grounded in social control theory

PurposePower is one of the single most critical concepts for understanding industrial relations management. Yet, despite having been subject to much scholarly attention, existing research often implicitly assumes an organizational level of behavior or examines influence tactics within the confines of an individual-level dyad. This has led to a limited understanding of influence exercises involving a third person. Motivated to advance the understanding of this phenomenon, this study aims to explore how boundary spanners from a buying organization influence supplier representatives by involving a third person.Design/methodology/approachThis study uses a longitudinal single case study design grounded in social control theory. Data consist of interviews, observations and documents collected over a period of 27 months in a global sourcing context.FindingsThe findings demonstrate how the influence agent from the buying organization can invoke a third person’s mediated and nonmediated social power base through either direct or indirect social control mechanisms. With these findings, this paper makes a novel theoretical contribution by developing a deeper understanding of underexposed social influence tactics unfolding in individual-level triads.Practical implicationsThis study offers boundary spanning managers with practical insights into subtle and indirect forms of social influence with which they can influence external exchange partners.Originality/valueTo the best of the authors’ knowledge, this study is the first to draw on social control theory to examine interpersonal influence tactics in buyer-supplier relationships. By integrating this theoretical perspective with extant research on social power, this study emphasizes the importance of considering how the influence agent mobilizes a third person’s social influence base.

Control in the structure of the concept of accounting for contractual obligations

Control over economic resources and ownership of assets represent two interrelated but distinct economic categories in the concept of accounting for contractual obligations. If the ownership of assets arises at the time of signing the contract and, accordingly, the objects of the exchange transaction are evaluated and fixed at that moment, then control over the economic resource arises at the time of the transfer of the underlying asset under the control of the buyer organization. Control allows you to identify the economic resource to be accounted for by the organization during the performance of contractual obligations. Therefore, for accounting purposes, differences in these categories should be taken into account when estimating revenue from contracts with buyers.

Factors Explaining Program Sustainability: A Study of the Implementation of a Social Services Program in Sweden

Even for successfully implemented programs, there is a great risk that new work practices are not sustained over time. Previous research has yielded a number of factors which influence program sustainability, but little is known about which factors are most important in different contexts or how these factors interact. This study tests a model of sustainability factors in a case where a program for structured needs assessment and documentation was implemented in the Swedish social services. In November 2020, a questionnaire was sent out to local implementing actors in the municipalities. The data include 135 municipal organizations with 1–3 respondents per organization. Descriptive statistics and multiple regression were used in the analysis. The outcome variable was routinization as one of the most central components of sustainability. The findings show that while the program was implemented at 21.5% of sites, it was both implemented and routinized at only 13.3% of sites. A key factor for successful routinization was an open project strategy, which entails coordination between the implementation process and other change initiatives, the identification of a long-term planning horizon, and development based on continuous feedback. Additional factors found to contribute to routinization were management commitment, user participation, first-line manager commitment, and available resources. Certain factors were identified as pertinent to the implementing actors themselves, such as effective project leadership and rationally planned projects. These latter factors, however, demonstrated less importance towards routinization. These findings are discussed in relation to the fragmented context of the implementation, whereby the recipient organizations were not single, unified organizations, but rather organizational clusters involving both purchaser and provider organizations. The findings have implications for the planning, management, and evaluation of social program implementation and the ability to sustain novel work practices.

A matter of trust: Commitment to act for health equity

We believe these recommendations constitute "minimum requirements" for health care organizations to move toward greater health equity. As health systems, standards-setting organizations, national and private purchaser organizations, and thought leaders, we represent organizations in the health care ecosystem that can both advise on strategies for adopting the recommendations and have the power and leverage to cause their implementation. We commit individually and collectively to use our leverage to propel their implementation at our own institutions and across the county. We very much hope others will join us.

B2B brand marketing in Africa? An exploratory investigation of B2B buyers' perception of supplier brands

Despite growing interest in business-to-business branding, there is limited understanding of how B2B brands impact organizational buying decisions in fast-emerging African markets. To address this omission, this study attempts to investigate the role and significance of B2B supplier brands in emerging African economies. Using a qualitative inquiry, we conducted interviews with business-to-business buyers across various sectors of the Nigerian economy. Leveraging insights from these buyers, we offer a comparative analysis of the role of B2B buying practices in African and Western markets and provide a grounded model addressing the role of B2B brands in organizational buying behavior. Findings indicate that the direct role of brands in business-to-business buying is contingent on several factors, including the supplier's branding strategy, the foreignness or localness of the brand, features of the brand as well as an evaluative process of purchase considerations. Our findings provide a deeper understanding into how brand value is perceived by Nigerian buyers, consequently setting the foundation for suppliers to better comprehend buyers in emerging African markets.

B2B Buyers' emotions and regulatory focus in justice and switch back decisions

Research on the role of emotions in organizational decision making is escalating, yet the impact of emotions on organizational buying remains under-examined. Applying the feelings-as-information perspective, we examine the influence of purchasing agents' termination emotions (i.e., emotions associated with the termination of a supplier) on their perception of justice toward an existing win back offer, and their advocacy toward switching-back to this supplier. Additionally, we integrate regulatory focus theory to examine the boundary conditioning effect of a buyer's prevention focus. Drawing on qualitative and quantitative research from purchasing agents, this study provides insight into the positive effect of “felt-bad” termination emotions (i.e., guilt, embarrassment, regret, and sadness) and the negative effect of “felt-good” termination emotions (i.e., joy, hopefulness, and relief) on cognition (i.e., perception of justice in the win back offerings) and subsequent advocacy to switch-back. Additionally, buyer perceptions of justice in a win back offer are found to mediate the relationship between emotions and actions (i.e., advocacy to switch-back). Furthermore, a prevention focus orientation diminishes the influence of buyers' termination emotions on the perception of justice in the win back offer. Our results explicate purchasing agents' emotion-cognition-decision relationships in organizational purchasing.

Risks in Cloud Computing Relationships: A Study of Large Public Buying Organizations in Sweden

Cloud Computing (CC) is an increasingly alternative for IT Outsourcing (ITO). There is a consensus that a good ITO relationship between the service buyer and provider is a prerequisite for the success of an ITO. However, there is a lack of studies concerning the relationships between large companies owned by public organizations and CC-providers in Sweden. Consequently, there is a lack of knowledge about the risks that could jeopardize relationships between companies owned by public organizations and their CC providers. Thus, this study seeks to answer the research question: “What are the risk factors to consider for building and maintaining a successful relationship between CC-providers and companies owned by public organizations in Sweden from a buyer's perspective?”. The study has identified seven most critical risk factors that should be considered to keep or build a well-working relationship between CC parties. These factors are contracts, the client's degree of expertise in IT operations, measurement problems, the Swedish Public Procurement Act, provider challenges, relatedness, and ex-ante imperfection. The findings of this study can be used by large public organizations in Sweden who plan to use or who are using CC in order to mitigate the risks in CC relationships.

Leveraging value creation to drive the growth of B2B platforms

Business platforms have become widespread in business to consumer (B2C) markets and their adoption is on the rise in the business to business (B2B) world. However, our understanding of platform adoption in B2B is less developed than for B2C. In the few cases where B2B platforms have been explicitly examined, it is often assumed that they can be understood using principles developed from the study of B2C platforms. However, the two types of platforms have important differences that often require different managerial policies to be successful. B2B supply chains are much more complex because of multiple echelons, the sophistication of their purchasing and other organizations, the competition they face, and the value of their data. The result is that, among other things, the nature of their value exchange is likely different. To address this gap, we create a novel framework. The value creation lens is grounded in theory and creates a better understanding of the dynamics of platform creation and growth by separating the platform's value into three components: (1) the standalone value of the product, such as a smartphone's ability to take pictures, (2) the value of other participants on the platform, such as the number of friends on Instagram or merchants on eBay, and (3) the value created by complementary products from third‐party providers, such as apps for a smartphone. A dynamic perspective explores the trajectory of differences in value between B2B and B2C platforms along with managerial implications.

Exploring changes in organizational purchasing behaviors brought about by COVID-19 as a catalyst for new directions in sales research

The COVID-19 pandemic’s disruption and ultimate lasting impact on the business world is unprecedented. While there has been much discussion about the specific impact that COVID-19 has had on salespeople and sales organizations as a whole, very little academic investigation has been focused on the impact of the pandemic in terms of the ‘other side’ of the buyer-salesperson dyad–namely, B2B buyers. This research aims to fill this void by providing initial insights into the changes that have emerged post COVID-19 in B2B buyer decision-making. Using qualitative interviews and an exploratory survey (with the goal of generalizing the initial findings across industries and contexts), our findings suggest that significant changes have emerged in the areas of (1) the organizational buying process, (2) how buyers source information, and (3) how buyers and salespeople interact. We expand on these core themes via a list of more detailed subthemes. The results serve as a catalyst for new and relevant avenues for sales related research regarding B2B in the new normal. Consequently, extensive future research directions are proposed.

REDUCING INVENTORY LEVELS IN A SUPERMARKET BY THE SIX SIGMA METHOD

One of the most active sectors in an increasingly globalized world, retail sector has become a rapidly developing sector in Turkey as well. Companies in this sector must follow an inventory policy that provides them with minimum cost and maximum profit in order to compete and survive in market. For this reason, effective management of inventory is crucially important in the retail sector, as in other sectors. In this study, Six Sigma method was used in order to reduce the inventory levels in a large supermarket operating both wholesale and retail in Turkey. Six Sigma is a management tool that emphasizes continuous improvement as a culture and increases the efficiency of processes. In this study, the causes of high inventory levels were determined by following the steps of the Six Sigma method, and the collected data were analyzed. At the end of the implementation, some improvement actions were planned to reduce inventory levels, and a monitoring system was established to ensure sustainability. There was a deficiency in inventory tracking and demand forecasting processes. The main reason for this was seen to be the purchasing organization. It was determined that sometimes more than necessary purchases were made. Six sigma studies on supermarkets in Turkey are limited. This study sets an example for the use of the Six Sigma method, which is a systematic process improvement method for the retail industry.

Positioning strategies for B2B service markets

The study sought to determine the areas of congruence between firm and organizational buyers, and consequently develops a B2B service positioning strategy framework. With an interpretative phenomenology and purposive sampling, the study sampled and interviewed 35 participants from the banking, insurance and media industries. The data was analyzed using thematic analysis, and identified quality, price, network and relationships, competitiveness, service employees, and CSR as positioning strategies required in the B2B market for sustainable competitive advantage. The study makes a substantial contribution to the study of B2B positioning with the proposed B2B service positioning framework. The outcome of the study also informs the practice of marketing in general and B2B positioning strategy in particular.

Sub-Supplier Management - Towards a Process Framework

The multi-tier nature of supply chains (Mena et al., 2013), extending the boundaries beyond the direct supplier level upstream to sub-suppliers (Carter et al., 2015), receives increasing attention in the literatur. While the conversations address particularly supply chain transparency and the identification of risk or malpractices, much less attention is given on the range of activities companies perform to manage sub-suppliers - and what management of sub-suppliers actually means. Sub-suppliers characterize by their organizational distance to the buying organization: buyers lack a contract with sub-suppliers as they are contracted only by suppliers (or other sub-suppliers) which act as middleman (Grimm et al., 2016). In such settings, selecting or knowing sub-suppliers, monitoring their performance and influencing them requires processes that are different to those applied when dealing with direct suppliers. Business experience in managing sub-suppliers is largely limited to resolving immediate problems, in particular actual crises, or sectoral / collective approaches. Academic literature on managing sub-suppliers is scarce and scattered. This paper is based on fourteen case studies and six workshops with industry experts. It proposes a sub-supplier management framework, and suggests a set of business processes for sub-supplier management. This process framework may serve as a basis for future research in managing sub-suppliers.