Developing Operational Competence in Purchasing

This paper contributes to the emerging theory of purchasing competence. First, it replicates and cross-validates the construct with the five underlying supply-side competence dimensions of Narasimhan, Jayaram and Carter (2001), using telephone survey data from 200 high-turnover European companies. The addition of an IT Competence dimension to the construct is proposed and empirically validated. In response to the growing importance of services, equivalence of the competence construct across manufacturing and financial services contexts was shown using the structural equation technique of invariance analysis. Using set correlation analysis, competence dimensions were found to be significant drivers of multiple operational performance measures. All competence dimensions had significant positive impact on at least one performance measure. IT Competence had the most significant positive impact, driving Quality, Purchase-Order Cycle Time and Professionalism. Certain dimensions had significant negative effects on performance, providing evidence for the possible existence of the “competency trap” phenomenon. Potential areas of further research and implications for academics and managers are discussed.