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Are You Receiving Me? A Viable System Model (VSM) Analysis of Purchasing Coordination in a Firm Engaged in Offshoring of Manufacturing Activities

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  • Godfrey Mugurusi

    (Norwegian University of Science and Technology (NTNU))

  • Luitzen de Boer

    (Norwegian University of Science and Technology (NTNU))

Abstract

This paper presents an account of the coordination of purchasing activities in a firm that offshored their manufacturing operations that later turned problematic. Empirical data is drawn from a single in-depth case study within a large multinational company which was involved in production offshoring in 2009. The paper draws on the viable systems model (VSM) as the main theoretical lens. First, our findings suggest that purchasing coordination is a loose construct; one in which the role and types of information aggregation in the purchasing process is loosely defined compared to the aggregation of volumes and the effectiveness of sourcing teams. This finding partly explains why many cross-functional sourcing problems occur. Second, that organizational and functional contextual differences can no longer be sidelined in discussions of purchasing coordination because they define how the system’s functions interface and therefore are one of the most essential considerations for better purchasing coordination and ultimately organizational viability.

Suggested Citation

  • Godfrey Mugurusi & Luitzen de Boer, 2019. "Are You Receiving Me? A Viable System Model (VSM) Analysis of Purchasing Coordination in a Firm Engaged in Offshoring of Manufacturing Activities," Systemic Practice and Action Research, Springer, vol. 32(3), pages 239-272, June.
    • Handle: RePEc:spr:syspar:v:32:y:2019:i:3:d:10.1007_s11213-019-09483-y
    DOI: 10.1007/s11213-019-09483-y
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    References listed on IDEAS

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    1. Clampit, Jack & Kedia, Ben & Fabian, Frances & Gaffney, Nolan, 2015. "Offshoring satisfaction: The role of partnership credibility and cultural complementarity," Journal of World Business, Elsevier, vol. 50(1), pages 79-93.
    2. Lorentz, Harri & Kumar, Mukesh & Srai, Jagjit Singh, 2018. "Managing distance in international purchasing and supply: a systematic review of literature from the resource-based view perspective," International Business Review, Elsevier, vol. 27(2), pages 339-354.
    3. Saadet Toprak & N. Gökhan Torlak, 2018. "An Adaptive Use of Viable System Model with Knowledge System Diagnostics Serving Industrial Democracy in a Textile Manufacturing Company," Systemic Practice and Action Research, Springer, vol. 31(1), pages 1-26, February.
    4. Johansson, Malin & Olhager, Jan, 2018. "Comparing offshoring and backshoring: The role of manufacturing site location factors and their impact on post-relocation performance," International Journal of Production Economics, Elsevier, vol. 205(C), pages 37-46.
    5. Lampel, Joseph & Bhalla, Ajay, 2011. "Living with offshoring: The impact of offshoring on the evolution of organizational configurations," Journal of World Business, Elsevier, vol. 46(3), pages 346-358, July.
    6. Godfrey Mugurusi & Lydia Bals, 2017. "A processual analysis of the purchasing and supply organization in transition: the impact of offshoring," Operations Management Research, Springer, vol. 10(1), pages 64-83, June.
    7. Nicola Burgess & Nicholas Wake, 2013. "The applicability of the Viable Systems Model as a diagnostic for small to medium sized enterprises," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 62(1), pages 29-46, January.
    8. Frank A.G. Den Butter, 2012. "The transaction management perspective on procurement in the era of globalisation," International Journal of Procurement Management, Inderscience Enterprises Ltd, vol. 5(2), pages 123-139.
    9. Batista, Luciano & Davis-Poynter, Simon & Ng, Irene & Maull, Roger, 2017. "Servitization through outcome-based contract – A systems perspective from the defence industry," International Journal of Production Economics, Elsevier, vol. 192(C), pages 133-143.
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