Aligning purchasing portfolio management with sourcing negotiation styles

Abstract

Purpose

The purpose of this paper is to examine how to align purchasing portfolio management with sourcing negotiation styles.

Design/methodology/approach

The authors have adopted two-step field tests: a case study; and a follow-up experimental test with 77 sourcing professionals.

Findings

The authors note that Kraljic Portfolio Matrix (KPM) provides a valuable guide for determining sourcing negotiation styles (i.e. competitive negotiation for leverage items, collaborative negotiation for strategic items and accommodative negotiation for bottleneck items). Interestingly, effective buyers adopt right negotiation styles based on the switching costs of changing suppliers, the dependence level on specific suppliers and the availability of alternative suppliers.

Originality/value

This study shows that aligning purchasing portfolio management with sourcing negotiation styles improves the chances of effective buying outcomes. Practical implications suggest that successful buyers move beyond interpreting generic predictions of the KPM framework and rather implement specific negotiation styles to maximize the potential benefits of purchasing portfolio management.

Citation

Kang, M., Hong, P., Bartnik, R., Park, Y. and Ko, C. (2018), "Aligning purchasing portfolio management with sourcing negotiation styles", Management Decision, Vol. 56 No. 11, pp. 2341-2356. https://doi.org/10.1108/MD-09-2016-0662