International purchasing offices in China: a dynamic evolution model
International Business Review
The salience of the international purchasing office (IPO) in the management of international sourcing activities of multinational corporations (MNCs) has steadily increased, in developed and emerging economies, since the first adoption of this supply chain strategy in the 1980s. The aim of this paper is to develop an activity/role-based evolution model for IPOs, employing multiple case studies: 14 MNCs’ IPOs in China, studied by British, Italian, and Chinese scholars. Applying role theory in a global purchasing context, we identify eight routine roles and four strategic roles played by IPOs and propose that IPOs could lead an MNC's global sourcing in a geographical region. We challenge the unilinear and sequential nature of existing global sourcing process models and propose a dynamic evolution model, consisting of five stages differentiated by number, depth, and breadth of roles, in which IPOs could leapfrog some stages, re-trench (move back to lower stages) and be potentially withdrawn. Finally, we conclude that the stage of an IPO is determined by the strategic importance of China to its parent company.
“NOTICE: this is the author’s version of a work that was accepted for publication in International Business Review. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in International Business Review 23, 580-593. DOI: 10.1016/j.ibusrev.2013.09.006”
Vol. 23, Issue 3, pp. 580 - 593