Integration and Coordination in Purchasing and Supply Management: Its Antecedence and its Effects on Purchasing and Firm Performance

Although the positive link between purchasing and supply management (PSM) proficiency and firm performance is conceptually well established, it lacks large-scale empirical investigation of broad and complex frameworks. This paper strives to narrow this research gap. PSM cross-functional integration and its cross-locational coordination constitute the core constructs of this research. We assess their impact on purchasing and firm performance while also investigating the influence of talent management and performance measurement practices as antecedents of the two core constructs. Data was collected in a global survey of 148 companies across different industries leveraging three data collection techniques. To test our research framework, the data was evaluated in a structural equation model. We find strong support for our research framework. In particular, our findings show that pur-chasing departments with high levels of cross-functional integration and cross-locational coordi-nation are more likely to achieve cost reduction, reduced lead times and improved quality of pur-chased goods and services. While talent management was found to exert a significant direct per-formance effect, it also strongly enables high proficiency among cross-functional integration and cross-locational coordination. Furthermore, the impact of performance measurement on PSM’s cross-locational coordination was supported while its impact on cross-functional integration was not supported. Overall, our findings support purchasing performance to be a strong driver of firm performance.