Organizational Buying Behavior Research Articles

Artificial intelligence advancements in procurement: transforming organizational buying behavior

Artificial intelligence advancements in procurement: transforming organizational buying behavior

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.

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.

The buying center concept as a milestone in industrial marketing: Review and research agenda

The buying center (BC) has captivated the attention of researchers for >50 years, becoming a central element of organizational buying behavior. While it seems easy to identify the BC participants in any given situation, the marketing literature lacks an integrative framework for examining the nature of BC. The purpose of this study is threefold: (1) to develop a rigorous BC conceptual model; (2) to provide an assessment of the BC state-of-the-art; and (3) to identify key opportunities for future research. Based on a systematic literature review, the descriptive findings indicate a decreasing number of publications since the late 2000s and that top-tier marketing journals have been almost silent since the early 90s. The domain-based findings suggest a three-layer model driving a thorough understanding of the concept, the main stages associated with BC deployment (formation, dynamics, and outcomes), and the contextual factors influencing BC decision-making.

Economic Sustainability by Using Life Cycle Cost Information in the Buying Center: Insights from the Public Sector

Following the triple-bottom-line approach, sustainability comprises not only an ecologic and a social dimension but also an economic one. In that sense, economic sustainability (ES) tries to achieve a state in which present economic activities do not place a disproportionate burden on future economic activities. The time-related dimension of ES is of interest for this research, because procurement management makes use of life cycle cost (LCC), which is an instrument to measure long-term economic effects. LCC information could help to consider ES, but practice struggles to consider the information. This research addresses this issue and merges organizational information processing with organizational buying behavior theory. Empirically, it reports original insights into eight cases in the public sector. Decisions in the cases are usually made by councils (buying centers); as such, a group of people with different backgrounds must be informed with ES LCC information. The findings show ES LCC information requirements, capabilities, and fit, as well as information distribution and perception in buying centers. As such, the cases provide indications as to which decisions in the project are influenced by ES LCC information. Overall, the analysis integrates two theoretical perspectives and provides strong indications that LCC is a promising instrument to link decision making with a sustainability rational.

Information sources used by charterers to select shipowners

This study aims to identify the information search behaviour of charterers in selecting shipowners within a business-to-business framework. It focuses on charterers' information sources and how different factors (individual, organisational, and purchase-related) affect the information search since this construct is a major component of comprehensive theories of organisational buying behaviour. Understanding the buying behaviour of charterers also helps marketers to increase customer satisfaction. The analysis is based on questionnaire responses from 141 firms that have recently chartered vessels. From a principal components analysis, the study identified eight sets of information sources, of which impersonal, e-mails and reference-based information were the most important. The results show that the business-to-business information sources used by ship charterers vary significantly according to organisation size, centralisation, type of purchase, purchase complexity and experience. Further analyses revealed a significant relationship between these factors and business-to-business information sources, specifically between the importance of the purchase, perceived risk, formalisation, standardisation, personal stake, specialisation, and use of information resources. Finally, the study revealed a significant relationship between business-to-business information sources and customer satisfaction.

Identifying institutional barriers and policy implications for sustainable energy technology adoption among large organizations in California

Large organizations wield considerable market power, their procurement activities can be leveraged to achieve social, economic and environmental goals by ‘pulling’ more desirable products into the market. However, while there is substantial research in individual consumer buying behavior and market barriers to sustainable technology adoption, less is known about large organizational buying behavior and the impact of institutional barriers in this area. To address these research gaps, we conducted an exploratory study aimed at better understanding the process through which large organizations purchase sustainable energy technologies and what internal barriers they experience during that process. We surveyed and interviewed 120 individuals involved in procurement from Californian organizations representing both public and private sectors. Survey results indicate the need to resolve the conflict between prioritizing lowest first cost and lowest life cycle cost, better engage multiple stakeholders involved in internal decision-making around purchasing, and improve existing procurement tools or offer new ones. We provide recommendations for how policymakers can apply our findings to increase the adoption of sustainable energy technologies in their own organizations and communities.

Impact of software as a service (SaaS) on software acquisition process

PurposeOrganizations worldwide are adopting software as a service (SaaS) applications, where they pay a subscription fee to gain access rather than buying the software. The extant models on software acquisition processes, several of which are based on organizational buying behavior, do not sufficiently explain how SaaS application acquisition decisions are made. This study aims to investigate the acquisition process organizations follow for SaaS software, the changes to the roles of the Chief Information Officer (CIO) and the business user and also looks at the impact of SaaS on the proliferation of unauthorized software systems.Design/methodology/approachThe authors used exploratory research using the grounded theory approach based on 18 in-depth interviews conducted with respondents who have studied with enterprise software delivered on-premise and as SaaS in different roles such as sales, consulting, CIO, information technology (IT) management and product development.FindingsThe authors identified a need to classify the SaaS software and developed a framework that uses software specificity and its strategic importance to the organization to classify SaaS applications. The aforementioned framework is used to explain how software evaluation processes have changed for different kinds of SaaS applications. The authors also found that the CIO’s and the business users’ have changed substantially in SaaS application evaluations and found evidence to show that shadow IT will be restricted to some classes of SaaS applications.Originality/valueBy focusing on the changes to the roles and responsibilities of the members of the buying center, this paper provides unique insights into how the acquisition process of SaaS is different from the extant models used to explain enterprise software acquisitions. An understanding of how information search is conducted by the business users will help software vendors to target business users better.

Organizational buying behaviour for perishable‐food packaging in grocery retail

AbstractThis qualitative study investigates the structure of the buying centre, the buying process, and the factors that influence buying decisions for perishable‐products packaging. This empirical investigation is based on the case study of a major Quebec food retailer. We show that the purchase of packaging changes significantly depending on whether the product is considered more or less strategic for the organization, which determines the required level of packaging customization. Buying centre structure becomes more complex as packaging customization increases. Given the multi‐functionality and the interdisciplinarity of packaging, we propose a multi‐criteria analysis grid to improve buying decision efficiency and to streamline communication between the various levels of the buying centre.

Information Sources Used By Charterers to Select Shipowners

This study aims to identify the information search behaviour of charterers in selecting shipowners within a business-to-business framework. It focuses on charterers' information sources and how different factors (individual, organisational, and purchase-related) affect the information search since this construct is a major component of comprehensive theories of organisational buying behaviour. Understanding the buying behaviour of charterers also helps marketers to increase customer satisfaction. The analysis is based on questionnaire responses from 141 firms that have recently chartered vessels. From a principal components analysis, the study identified eight sets of information sources, of which impersonal, e-mails and reference-based information were the most important. The results show that the business-to-business information sources used by ship charterers vary significantly according to organisation size, centralisation, type of purchase, purchase complexity and experience. Further analyses revealed a significant relationship between these factors and business-to-business information sources, specifically between the importance of the purchase, perceived risk, formalisation, standardisation, personal stake, specialisation, and use of information resources. Finally, the study revealed a significant relationship between business-to-business information sources and customer satisfaction.

Archetypes of sourcing decision-making

PurposeThe purpose of this paper is to develop taxonomy of sourcing decision-making (SDM) archetypes and explore how different contextual factors influence these archetypes when global sourcing of complex components is considered a viable option.Design/methodology/approachA multiple case study approach with five in-depth cases is employed. In total, 19 interviews as well as publicly available and internal data from large buying firms headquartered in Austria and Germany were collected and analyzed.FindingsThe results reveal three different SDM archetypes which are described in detail (i.e. “consensus,” “argumentation” and “cabal”). Furthermore, it is found that these archetypes are mainly influenced by three contextual factors: sourcing maturity, product complexity and leadership style. The final model comprises six propositions which illustrate how these contextual factors determine companies’ SDM archetypes.Research limitations/implicationsThe study contributes to theory development at the intersection of organizational buying behavior and the (global) SDM literature. Thereby, it answers the call for more rigorous investigation of the influence of contextual factors on SDM processes.Practical implicationsThe findings enable practitioners to better understand and consequently manage SDM processes and their outcomes. By supporting decision-makers in identifying SDM archetypes, this study allows sourcing managers and teams to make better decisions by avoiding problems that occur in situations in which the preferred decision-making type would result in suboptimal decisions.Originality/valueThe study provides a first step toward taxonomy of SDM archetypes and is among the first that explores their underlying contextual factors.

Goals, Conflict, Politics, and Performance of Cross‐Functional Sourcing Teams—Results from a Social Team Experiment

Strategic sourcing is carried out in cross‐functional teams to account for the complexity and multidimensionality of modern procurement decisions. However, such teams not only enable the integration of distinct interdependent skill sets and viewpoints, they are also characterized by functional goal misalignment. We focus on the resulting behavioral challenges, namely conflict and politics, and their effects on team satisfaction and rationality, which ultimately leads to observed outcomes. We test our hypotheses in a structural equation model based on data gathered from 468 participants in a social team experiment. We find a mediated effect of goal misalignment on political behavior via two types of team conflict. Political behavior, in turn, obstructs rational team sourcing decisions and reduces team members’ satisfaction with the process. Our study indicates that behavioral challenges in the framework of Organizational Buying Behavior not only co‐occur but affect each other via mediation. Hence, managers need to closely monitor the escalation chains’ origin, task conflict, which constitutes a necessary condition for further emotional dissent and political biasing. We contribute to the understanding of the challenges in cross‐functional sourcing teams, thereby providing advice to executives in their pursuit to rationalize and improve sourcing team decisions and their outcomes.

Inside the Black Box: Organisational Buying Behaviour and Strategic Purchasing in Healthcare: A Response to Recent Commentary

We read the Hanson et al1 paper with great interest, utilising as it does our IJHPM paper, ‘What’s Needed to Develop Strategic Purchasing in Healthcare? Policy Lessons from a Realist Review.’2 We very much agree with their statement identifying a key gap in our paper: ‘One empirical finding which is not directly anticipated in either the economics of organisation or the inter-organisational relationships literatures was the critical importance of organisational capacity. Strategic purchasing is technically demanding and requires a number of capacities of the purchaser.’1 The realist review from which our paper was derived included the issue of organisational capacity as a key aspect of strategic purchasing. Limitations of space prevented us from discussing it in the paper, but this correspondence provides an ideal opportunity to do so, albeit briefly. Much of the procurement literature concerns buyer-supplier interactions, with principal-agent, transaction cost and inter-organisational relationships theories centre-stage. This was covered in our recent paper.2 However, there is also a complementary part of the literature that concerns ‘organisational buying behaviour’ (OBB) – research into the structures, cultures, systems, processes, capabilities and behaviours (that together create organisational capacity) that affect whether the buy-side organisation can manage its interactions with suppliers effectively. In what follows, we look at three key aspects of the OBB literature and illustrate their relevance to strategic purchasing via an application to English National Health Service (NHS) commissioning.

Towards a better understanding of organizational buying behavior across cultures: empirical evidence from the Arabian Gulf

PurposeThe purpose of this study is to examine, through the lens of the buying center concept, a theorized link between organizational buying behavior (OBB) and a national culture of collectivism, large power distance, particularism and a wasta practice.Design/methodology/approachA qualitative methodology was used to gain better understanding of OBB in an under-researched business environment of the Arabian Gulf. The data come from 41 organizational practitioners who reported on the industrial buying processes in their organizations with reference to the buying center framework.FindingsThe study developed a model of the buying center for the emerging markets governed by socio-political institutions.Research limitations/implicationsThe data were obtained only from one culturally specific world region.Practical implicationsTo attain efficacious results in culturally distant business environments, industrial marketers should complement home country experience with a thorough understanding of how national cultures affect the dynamics of OBB.Originality/valueThe study updates the conceptualization of the buying center’s organizational actors (OAs) for business contexts beyond traditional, mature markets. It reveals the typology of decisional influencers, introduces and defines the role of advisers and clarifies the role of the gatekeeping bureaucracy and differing perceptions thereof by OAs.

How to recover B2B relationships after a failed online reverse auction

PurposeThis paper aims to explore the possible scenarios after a failed reverse auction to continue a current buyer–seller relationship.Design/methodology/approachThe authors developed a further understanding of reverse auctions through the examination of a longitudinal case study in the mining industry based on grounded theory.FindingsThe study indicates that losing a reverse auction is not a death sentence for the current supplier. Four factors influence the potential scenarios: buyer factors, supplier factors, buyer–seller factors and contextual factors. If the overall evaluation favors the current buyer–seller relationship, the supplier can continue the business interaction by full renegotiation or discrete step-by-step reconsideration. Conversely, the buyer–seller relationship would reach a state of dissolution.Originality/valueThis manuscript contributes to the understanding of reverse auction, an under-researched theme in organizational buying behavior theory. This paper is the first attempt to link buyer–seller relationship dissolution and reverse auctions. The authors suggest that more academic endeavors are needed to study online reverse auctions.

Adoption of the Internet of Things technologies in business procurement: impact on organizational buying behavior

PurposeThe purpose of this paper is to discuss the potential of Internet of Things (IoT) to affect organizational buying behavior. Potential impacts on organizational communication, buying center structure and processes and privacy and security issues are discussed.Design/methodology/approachThis is a conceptual paper that advances testable propositions based on the technology overview and use of existing organizational buying behavior theory.FindingsThis paper concludes that major changes are likely as a result of the adoption of IoT. The nature of organizational communication may shift to more machine-to-machine communication and buying centers may become smaller, less hierarchical but more coordinated, with less conflict. In addition, privacy and security concerns will need to be addressed.Originality/valueThis is the first attempt to conceptualize the impact of adoption of IoT technologies that may help future researchers to examine the impact on a more granular level. For practitioners, it may help them prepare for the impacts of the IoT technological juggernaut.

Archetypes of Global Sourcing Decision-Making: The Influence of Contextual Factors

The study provides a first step towards a taxonomy of global sourcing decision-making (GSDM) process archetypes, by answering the questions ‘which archetypes of global sourcing decision-making exist?’ and ‘how do contextual factors determine these types of global sourcing decision-making?’. We highlight the extent to which differences in decision-making processes are explained by variations in environmental, organizational and decision-specific factors. In order to do so, we employ a multiple case study approach with five in-depth cases drawing on 19 interviews as well as publicly available and internal data from large buying firms headquartered in Austria and Germany. Our findings identify three different GSDM archetypes (i.e., bureaucratic-discursive, pragmatic-impartial and political-unstructured) which are mainly influenced by the three main contextual factors: global sourcing maturity, product complexity and leadership style. These factors determine how companies make decisions on sourcing complex components when global sourcing is considered a viable option. This study contributes to theory development at the intersection of organizational buying behavior and global sourcing literature and answers the call for more rigorous investigation of the influence of contextual factors on GSDM processes and their variance. Further, we enable practitioners to better understand and consequently manage GSDM processes and their outcomes. By identifying which GSDM context sourcing managers and teams face, this study allows to make better decisions by avoiding problems that occur in situations, in which their preferred decision-making type would cause them to act irrationally.

The relationship between national culture and the use of professional services: Evidence from two cross-country studies

Each year, clients spend large sums on professional services, such as accounting services, legal services and consulting services. While research has found significant cross-country differences in organizations’ spending on professional services, we do not know why they occur. Inspired by the organizational buying behavior literature, this paper investigates the influence of national culture on the use of professional services, particularly management consulting services. As the use of professional services involves considerable uncertainties—particularly for the buyer—it can be assumed to be influenced by cultural differences regarding the level of Uncertainty Avoidance, Individualism and Masculinity. By drawing on two independent cross-country studies, we show that organizations in high uncertainty avoidance and individualistic cultures use professional services less than organizations in low uncertainty avoidance and collectivist cultures. We found no relationship between Hofstede's dimension of Masculinity and the use of professional services. The findings contribute to the theorizing on how the cultural context influences organizational buying behavior and the purchasing of professional services.

The heart in organizational buying: marketers’ understanding of emotions and decision-making of buyers

PurposeOrganizational buying behavior has often been treated as a rational activity, even though humans are involved in the decision-making. Human decision-making often includes a complex cadre of emotions and rationalizations. Subsequently, organizational buyers may not only be driven by logic, testing and facts, but also by emotions. The purpose of this paper is to investigate the role that emotions play in organizational buying behavior.Design/methodology/approachIn-depth interviews were conducted with marketing decision-makers for one of the most valuable brands in the world. The role that emotions play in the behavior of organizational buyers is elucidated from the perspective of these marketing professionals.FindingsEmotions are prevalent at all stages in the organizational decision-making process and various discrete emotions fuel action tendencies among buyers. Efforts are made by marketers to strategically manage the emotions buyers experience.Practical implicationsAlthough organizational buyers must see the functional value of a product or brand, companies need to consider ways in which brands can connect with buyers on an emotional and personal level.Originality/valueThis paper contributes to the literature by offering insights into which discrete or specific emotions are most prominent in organizational buying behavior and how the manifestation of these emotions impact decision-making at each stage in the buying cycle.

The role of a solutions salesperson: Reducing uncertainty and fostering adaptiveness

Suppliers in business-to-business markets increasingly are seeking growth by providing end-to-end solutions to customers. Customers, on their part, see solutions and accompanying performance-based vendor contracts as ways to assure themselves of performance outcomes they need. This article draws on extant literature in organizational buying behavior, industrial marketing and project marketing, as well as the distinctive nature of customer solutions, to delineate three overarching types of uncertainties among customers and suppliers: (1) need uncertainty, (2) process uncertainty and (3) outcome uncertainty. Each of these types of uncertainties is present across the four stages of a solution process (requirements definition, customization and integration, deployment, and post-deployment support). However, the nature of these uncertainties changes as a solution evolves from one stage to the next. Based on this, we delineate a solution salesperson's role as one of reducing specific uncertainties across the solution process by providing pertinent information to key stakeholders within the customer- and supplier organizations, and encouraging adaptive behavior of the parties involved. We discuss implications for practice, and suggest directions for further research.