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Risk Reduction in Purchasing Organisational Professional Services

Author

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  • V.W. Mitchell
  • L. Moutinho
  • B.R. Lewis

Abstract

Organisational professional services are often costly, time consuming, high-profile and of undeterminable and variable quality; all of which increase the risk associated with their purchase. Yet understanding of what risks are perceived and how they are reduced is limited. The results of a Lisrel analysis of organisational purchasers’ risk perceptions in a high risk scenario confirmed the positive relationship between risk perception and reduction and that overall risk is derived mainly from the financial risk involved. The article also presents a new framework for understanding organisational purchasers’ risk-reduction behaviour in the context of purchasing professional services by a not-for-profit organisation which involves latent risk-reducing concepts such as clarifying, simplifying and risk sharing. Implications for risk measurement are discussed, together with more managerial recommendations for understanding purchasers’ behaviour and changing marketing practice in this sector.

Suggested Citation

  • V.W. Mitchell & L. Moutinho & B.R. Lewis, 2003. "Risk Reduction in Purchasing Organisational Professional Services," The Service Industries Journal, Taylor & Francis Journals, vol. 23(5), pages 1-19, November.
    • Handle: RePEc:taf:servic:v:23:y:2003:i:5:p:1-19
    DOI: 10.1080/02642060308565621
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    Cited by:

    1. Brown, Brian P. & Zablah, Alex R. & Bellenger, Danny N. & Johnston, Wesley J., 2011. "When do B2B brands influence the decision making of organizational buyers? An examination of the relationship between purchase risk and brand sensitivity," International Journal of Research in Marketing, Elsevier, vol. 28(3), pages 194-204.
    2. Yi-Wei Zhang & Jeong-Gil Choi & Armigon Ravshanovich Akhmedov, 2021. "The Impacts of Perceived Risks on Information Search and Risk Reduction Strategies: A Study of the Hotel Industry during the COVID-19 Pandemic," Sustainability, MDPI, vol. 13(21), pages 1-17, November.
    3. Fuchs, Galia & Reichel, Arie, 2011. "An exploratory inquiry into destination risk perceptions and risk reduction strategies of first time vs. repeat visitors to a highly volatile destination," Tourism Management, Elsevier, vol. 32(2), pages 266-276.
    4. Pueschel, Julia & Chamaret, Cécile & Parguel, Béatrice, 2017. "Coping with copies: The influence of risk perceptions in luxury counterfeit consumption in GCC countries," Journal of Business Research, Elsevier, vol. 77(C), pages 184-194.
    5. Adam, Issahaku, 2015. "Backpackers' risk perceptions and risk reduction strategies in Ghana," Tourism Management, Elsevier, vol. 49(C), pages 99-108.

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