The role of procurement in the management of supplier relationships

This paper explores the role of procurement in supplier relationships (SRs). Driven by the importance of outsourcing, there is a widespread awareness that procurement plays an important role in their management, yet there is still an incoherent view of what this role entails. The role of procurement is identified in this study by exploring how procurement managers conduct certain activities for the management of SRs that involve the exchange of products/services with different levels of asset specificity. The role is analysed and assessed in terms of four fundamental dimensions of SRs (trust, power, commitment and involvement). The findings reveal a far more limited role for procurement managers than what is advocated in the literature, especially for SRs that involve the exchange of products/services with high level of asset specificity and criticality. In light of the findings, certain profiles that can be adopted by procurement managers in specific contextual situations are identified and a guide to how procurement departments may be involved in an effective way in the management of SRs is proposed.