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Organizational buying effectiveness in supply chain
environment: A conceptual framework
Dario Miocevic
Abstract The idea of effectiveness measurement in supply chain context stresses the
importance of value development process for the forthcoming member of the chain.
The main purpose of this paper is to develop a conceptual model of organizational buy-
ing effectiveness in the supply chain context, emphasizing the importance of marketing
orientation in the purchasing process. Literature has revealed that there are many focal
interaction points between relationship marketing, supply chain management, and or-
ganizational buying. The effectiveness framework was developed regarding the value
perception, organizational buying involvement, and decentralization of decision making
Keywords supply chain management business relationships organizational buying
behavior organizational buying effectiveness performance measurement value
procurement
Introduction
Organizational buying behavior has so far been a widely dynamic area of B2B mar-
keting. There have been numerous research efforts in organizational buying behavior
that have contributed to a general understanding of the importance of a B2B marketing
agenda (Robinson et al. 1967, Webster and Wind 1972, Sheth 1973). It is now obvious
that research in the area of the consumer marketing and its functionalism can not be fully
understood without previous activity and behavior in business markets. It is generally
agreed that the value is a core concept of contemporary marketing, and has been touted
as a driver of customer satisfaction (Woodruff 1997) and purchase intention (Sweeney,
Soutar and Johnson 1997). The nature of repurchase intention in B2B markets is a result
DOI 10.1007/s12087-008-0030-0
Gabler Verlag 2008
Dario Miocevic ()
University of Split, Faculty of Economics,
Department of Marketing, Split, Croatia
E-Mail: dmiocevi@efst.hr
172 jbm vol. 2, 2008/4
of nurturing long term business relationships. Long term business relationships have been
widely empirically tested on the upstream and downstream sides of the chain (Ganesan
1994, Kalwani and Nayarandas 1995, Wathne and Heide 2004). Long term orientation
originated from B2B marketing research, in which such concepts as commitment, cus-
tomer retention, customer satisfaction, dependence, and trust have become the dominant
and vital building blocks of relationship marketing philosophy. Adopting the relationship
marketing paradigm, theoretically and pragmatically, supply chain management has aris-
en as the core concept that justifes the necessity of understanding the importance of B2B
marketing agenda. There has as yet not been much empirical or conceptual work within
supply chain management (SCM) regarding the aspect of B2B marketing (Erevelles and
Stevenson 2006, Martin and Grbac 2003). Moreover, SCM represents the contemporary
business concept that can be valorized within different perspectives: marketing, busi-
ness logistics, operations management, IT management, and materials management.
SCM presumes that companies do not exist in isolation, but rather that they are forced
to compete against each other or to collaborate. Porters (1998) value chain framework
insists that companies should achieve intra-organizational balance in order to defne the
primary and secondary activities that are necessary to leverage the proft from customer
satisfaction. Logistics insight confrms this framework as inbound, whereas outbound
logistics activities serve as an integration mechanism between companies in the sup-
ply chain. Outbound logistics activities of one company interact with inbound logistics
(procurement) activities of another company. Following this, the supply chain context
stands for a natural environment of B2B relationships because it is concerned with the
management of customer and supplier relationships at the same time and with the same
devotion. Not all relationships (upstream and downstream) are equally important (Lam-
bert et al. 1998, Lambert et al. 2004, Mentzer et al. 2000). The importance of relationship
is equal to the amount of value each partner provides (supplier) and for how much value
added revenue it is responsible (customer). There is a clear distinction between strategic
and operative partnerships. Therefore it is justifed to valorize both the suppliers and
customers efforts in the value creation for the ultimate consumer. This approach has
been defned as a supply chain orientation (Mentzer et al. 2001) which endorses the fact
that the value creation is a process in which all members of the chain must invest their
resources. Contemporary literature in B2B marketing (in the area of SCM) implies that
there is a clear interaction between relationship marketing, supply chain management
and organizational buying behaviors. Organizational buying behavior, in the supply chain
context, has the task of providing the effective value for the forthcoming member of the
chain. As Tzokas and Saren (1999, p. 53) state, despite its importance for the market-
ing discipline little research effort has been devoted to examining what this value is,
how it is produced, delivered and consumed and how it is perceived by the customer.
Traditional SCM theory is concerned with cost reduction, but marketing-fostered SCM
theory is concerned with an ultimate consumer satisfaction, which is the main objective
of all members of the chain. Value in business markets was, and still is, an issue of the
research efforts by many scholars in B2B marketing (Lapierre 1999, Ulaga and Eggert
2002, Walter and Ritter 2003).
On the whole, respecting the problematic area, the objectives and agenda of this paper
are to:
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1) Valorize the supply chain environment as the natural context of B2B relationships.
2) Systematically review the foundations of literature that integrate the theoretical posi-
tions of relationship marketing, SCM, and organizational buying behavior.
3) Valorize the bridging function of organizational buying and selling centers.
4) Provide a conceptual background for organizational buying effectiveness in the sup-
ply chain context and to defne its role, structure, and position within the value crea-
tion process for the ultimate consumer.
Relationship marketing a foundational philosophy of supply chain management
Relationship marketing has been a widely researched area in business marketing through
the valorization of relational variables such as trust (Anderson and Narus 1990, Moor-
man et al. 1993, Donney and Cannon 1997), commitment (Dwyer et al. 1987, Gundlach,
Achrol, and Mentzer 1996, Morgan and Hunt 1994), and interdependence (Lusch and
Brown 1996, Turner et al. 2001). Relational variables have served mainly as the antece-
dents in B2B relationship research, setting in various levels of the supply chain (supplier-
manufacturer, manufacturer-distributor). However, it is essential to use relationship mar-
keting philosophy within the B2B context in order to understand the whole value creation
process from the frst tier suppliers. The B2B context offers a two-way approach in which
it is necessary to identify key supplier and key customer relationships. This represents the
ultimate difference between B2C and B2B contexts. The B2C perspective of relationship
marketing is more concerned with customer relationships, whereas the B2B perspective
aims to identify the crucial importance of both the suppliers and customers relation-
ships. Relationship marketing is the underlying the philosophy of what today are known
as customer relationship management (CRM) and supplier relationship management
(SRM). Sheth and Parvitiyar (1995) point out that the scope of the CRM process is to
acquire, retain, and to develop relationships with selective customers in order to provide
superior value to the company and customers. As can be derived, it is a two way process,
which in the end creates a win-win situation both for the company and its customer.
SRM is the mirror image process of CRM that is concerned with the governance and de-
velopment of supplier relationships. The lack of research in the SRM body of knowledge
gives a vast opportunity to researchers to defne the theoretical and operational bodies
of the concept. Moeller, Fassnacht and Klose (2006) proposed a framework for SRM,
mentioning the importance of suppliers in the value creation process for the ultimate con-
sumer. The premise of CRM, from the standpoint of customer value assessment, is that all
customers are not equal. Thus, Ervelles and Stevenson (2006) proposed the segmentation
of the supply market in order to divide strategic and non-strategic suppliers. Srivastava,
Shervani i Fahey (1999) identifed CRM, SCM and new product development as the three
core business processes that contribute to development of customer value. The core dif-
ference between CRM and SRM is that CRM is concerned with maximizing the number
of proftable customers, whereas SRM aims to optimize the supplier portfolio. Wisner
(2003) in his research found that CRM and SRM have been highly correlated and both
have had a signifcant infuence on supply chain performance. The interrelation between
CRM and SRM processes necessarily leads to the appearance of the supply chain orienta-
174 jbm vol. 2, 2008/4
tion (SCO) that endorses the importance of viewing both the customers and the suppliers
as strategic partners in the value deliverance process for the ultimate consumer. Mentzer
et al. (2001, p. 14) defned supply chain orientation as recognition by a company of sys-
tematic, strategic implications of the activities and processes involved in managing the
various fows in supply chain. A systems perspective is essential to clearly specify the
scope of SCO. An organization as a system interacts with the other sub-systems (suppli-
ers and customers), and they altogether comprise one larger system (the supply chain, in
this case). Mentzer et al. (2001) indicate that frms engaged in supply chains should be
oriented towards a cooperative effort aiming to boost SCO. Taking into consideration the
importance of supplier and customer relationships in SCM, Alderson and Martins (1965)
transvectional approach provides the needed conceptual background for SCO. Transvec-
tions are viewed as ongoing transactions between the partners in a supply chain. The
research point here is in ongoing collaboration, about which Alderson and Martin (1965)
state that using the partners in a channel setting makes the channel optimal and more
value is thus transferred. Reinartz, Krafft and Hoyer (2004) argue that a relationship can
not be viewed as a single transaction, but rather that it has a dynamic perspective which
confrms the transvectional nature as well.
Exploring and assessing the supply chain environment
The origins of SCM, as a scientifc discipline, date from the 1980s when Oliver and
Webber concluded that companies should strive to manage relationships with their key
suppliers in the supply chain in order to achieve effective value from the procurement
side. Starting from the viewpoint of SCM research in the area of business logistics, the
evolutionary path of SCM development originated from simple inbound company value
chain activities. However, Lambert (2004), whose primary interest is business logistics,
argued that SCM is a much wider term than logistics, one which involves marketing rela-
tionships, new product arrangements, operations fow management, and customer related
processes. This statement was confrmed by Christopher (2005). It is evident that SCM
involves business relationships as the main building blocks of its philosophy. Business
relationship (upstream and downstream) research has widely extended the scope of SCM
theory. Given the core of this paper, it seems important to determine SCM models that can
contribute to a better understanding of supply chain environment regarding B2B relation-
ships which are the focal research point.
To defne the scope of the SCM environment, an integrative approach is used. The
transaction orientation is replaced with a long term orientation and ongoing collaboration.
As is obvious, each of the previously reviewed SCM approaches signifcantly contrib-
utes to the supply chain environment assessment and successfully explains the nature of
B2B relationships. The model presented here (see Figure 1) is a general integration of the
Business Logistics SCM model (Lambert, Cooper, and Pagh 1998, Lambert, Knemeyer,
and Gardner 2004, Morash, Droge, and Vickery 1996), the SCM processes model (Crox-
ton et al. 2005, Lambert 2004) and the strategic management model (Defee and Stank
2005, Stank, Davis, and Fugate 2005). Morash, Droge, and Vickery (1996) developed a
model in which they defned demand and supply driven logistics capabilities that act as
jbm vol. 2, 2008/4 175
the supply chain integration mechanism. In their empirical research, they found a strong
correlation between these capabilities as well as their impact on frm performance. This
inevitably leads to the conclusion that the logistics capabilities are a function of the sup-
ply chain integration. There have been numerous research efforts to defne the behavioral
aspects of logistics integration in order to achieve successful supply chain integration
(Lambert, Knemyer, and Gardner 2004). Witnessing the dominance of process oriented
structures and applying them in an inter-organizational setting, customer relationship
management (CRM) and supplier relationship management (SRM) processes stand as
the key business integrators that confrm the validation of behavioral aspects of SCM
in which relationship enablers (trust, commitment and etc.) play a vital role (Chu and
Fang 2006, Lambert, Knemeyer, and Gardner 2004, Moberg et al. 2004). The SCM
processes framework delineates and headlines the main premise of modern marketing
research: that customer expectations must be met (Lambert 2004, Croxton et al. 2005).
Figure 1 Supply chain environment model (Source: Adopted from Defee, C. C., Stank, T. P. (2005): Applying
Strategy-Structure-Performance Paradigm to the Supply Chain Environment, The International Journal of
Logistics Management, 16 (1), pp. 41)
176 jbm vol. 2, 2008/4
Therefore, the authors stress that the customer and supplier relationship management
processes (CRM and SRM) are the key integration elements in the supply chains. This
was previously confrmed by Srivastava, Shervani, and Fahey (1999) in their empirical
work, and later by Giannakis and Croom (2004) in their conceptual framework. Stank,
Davis, and Fugate (2005) and Defee and Stank (2005) introduced the strategy-structure-
performance (SSP) model of SCM. A strategic approach to SCM is an ideal conceptual
model that encompasses the competitive arena that is emerging between the business
networks. Gibson, Mentzer, and Cook (2005) conducted research in which the main goal
was to identify the most infuenced SCM areas from which the customer and supplier
collaboration was widely identifed as a key component of SCM. This research confrms
the necessity that the focal research agenda in SCM is built round partner relationship
management initiatives.
Micro dyadic perspective of SCM relationships in B2B context
The SCM macro environment model defned the scope of partnership relationship man-
agement initiatives as drivers of behavioral supply chain integration. When talking about
the interaction patterns between SCM, relationship marketing and organizational buying,
the dyad concerning the interaction between the selling and buying center should be thor-
oughly analyzed because it represents the focal point of SCM research in the B2B context.
The works of Hutt and Speh (1984) and Hutt, Johnston, and Ronchetto Jr. (1985) on buy-
ing and selling center interaction serve as an admirable demonstration model of relation-
ship marketing, SCM, and organizational buying behavior intersection (see Figure 2).
The framework makes a distinction between two participant organizations, the cus-
tomer relationship management center (formerly known as the selling or strategic mar-
keting center) and the organizational buying center. It is important to stress that this
kind of specifcation of participants in B2B exchange necessitates the intra-organiza-
tional integration between various functional departments. However, the main focus
is the dyad, and this can be applied to any part of an upstream or downstream supply
chain relationship. A salesperson and a purchasing agent act as the representatives of
their organizations in a B2B exchange and have the key informant role. Key informant
roles are participants who act in front of their organization representing its core values
in the exchange process. Therefore, the role of key informants is to engage in boundary
spanning activity concerning the value exchange process. The key informant role offers
valuable insight on how the interaction process between salesperson and purchasing
agent occurs. The critical issues in interaction are emphasized by the behavioral com-
ponents of the relationship, such as a trust, commitment, and interdependence, formerly
valorized. These variables are relationship engagers and provide the environment in
which along term orientation between participant organizations thrives and, as a result,
transvection can emerge and replace traditional transactional approach. Although the
focus here is on dyadic relationships, the activities can be replicated on the various
levels of the chain. In this case, confrmation of logistics and purchasing activities as
factors of supply chain integration is evident due to the boundary spanning activity of
the key informants.
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Organizational buying effectiveness in supply chain context
Conceptual framework development
Effectiveness measurement in organizational buying is a relatively rare construct. So far,
there have been research efforts in performance measurement through purchasing ef-
fciency. Some authors see effciency as a term equal to performance (Giunipero and
Brewer 1993). The more effcient purchasing is, the lower the total cost of ownership,
and the value transmitted to the fnal consumer is greater in terms of economic value.
This is known from strategy literature as cost leadership strategy (Porter 1998). Besides
this purely economic approach to effciency, Rossler and Hirsz (1996) propose a custom-
er-oriented purchasing performance measurement which incorporates a broader set of
items including communication, responsiveness, and customer concerns. Effectiveness
has rather different goals. However, there are signifcant differences between these two
constructs in terms of several characteristics (see Table 1). The differences between the
Figure 2 Interaction feld of organizational buying and customer relationship management center (Source:
Adopted from Hutt, M. D., Johnston, W. J., Ronchetto Jr., J. R. (1985): Selling Centers and Buying Centers:
Formulating Strategic Exchange Patterns, Journal of Personal Selling and Sales Management, 5 (May), pp. 34)
178 jbm vol. 2, 2008/4
two constructs are clear. As the purchasing is considered to be concerned with the sup-
ply side, the aim is to procure more value, but just in terms of economic value (same
quantity lower prices, more quantity same prices); effective purchasing has the task to
procure the most value (not just in economic terms) for the ultimate consumer. Effective
purchasing strives to identify and capture all relevant elements of value creation which
include various aspects (economic, social, technical, and service) and therefore implies
the greater involvement of other business functions. The nature of exchange in the ef-
fcient purchasing concept is transactional, as the purchaser has the ability to switch to
another supplier that can offer him or her greater economic value. Effective purchasing
is rather based on a collaboration and partnership wherein the strategic suppliers are real
value enhancers identifed in the supplier portfolio management framework (Moeller,
Fassnacht, and Klose 2006). Dividing the transactional and strategic suppliers is of a great
importance for a purchasing frm, as an effective value creation and deliverance for their
customers involves cooperation with strategic suppliers.
Organization and management literature has shown great interest in the effciency-
effectiveness dichotomy from the standpoint of organizational confguration and can of-
fer valuable insight into the philosophy of effectiveness measurement (Lewin and Minton
1986, Ostroff and Schmitt 1993). Regarding this, Katz and Kahn (1988) note that these
two constructs should be observed simultaneously. However, effciency is important issue
related to purchasing in the supply chain context, and therefore must be included in the
performance concept development, but it is not suffcient from the marketing standpoint.
Earlier, Steers (1976) outlined the notion that an effectiveness concept should comprise
an optimization of goals, a system perspective, and a behavioral emphasis. Quinn and
Rohrbaugh (1983), following their exploratory study, have proposed three axes of the
effectiveness dimension: organizational properties (centralization/decentralization), at-
tention orientation (internal/external), and relationship between the means and ends to
achieve desired outcomes. Cummings and Malloy (1978) assumed that participation in
decision making is also an important element of organizational effectiveness. Organi-
zational properties, attention orientation, and participation in decision making could be
exploited for the purposes of organizational buying effectiveness concept development
(see Table 2).
Effectiveness implies that there are objectives that need to be met in order to fulfll the
strategic orientation of the company. The model proposed here defnes effectiveness as
Table 1 Distinction between effciency and effectiveness in organizational buying (Source: Author)
Distinction Effciency Effectiveness
CHAIN ORIENTATION Upstream Upstream and downstream
CORE PERFORMANCE
ELEMENT
Economic value from procure-
ment side
Total added value for ultimate
consumer
LATERAL INVOLVEMENT
LEVEL
Purchasing managers only Managers from various business
functions
DECISION MAKING Centralized Decentralized
NATURE OF EXCHANGE Transactional Transvectional
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a multi-item construct comprised of value perception, lateral involvement in organiza-
tional buying, and the decentralization of decision making (see Figure 3).
Organizational buying behavior is a signifcant part of the B2B marketing theory (Rob-
inson, Farris, and Wind 1967, Sheth 1973, Webster and Wind 1972). The buying center
refers to those members of an organization who become involved in the buying process
for a particular product or service (Robinson, Farris, and Wind 1967). Value research in
organizational buying has been relatively rare, both conceptually and empirically, and
therefore offers vast research potential. Value has recently been in the focus of marketing
research (Woodruff 1997, Doyle 2000). Lindgreen and Wynstra (2005) argue that value is
not only an increasingly relevant concept in the area of marketing, but is also interesting
from the perspective of purchasing and supply management. Value, for the specifcs of
business marketing, is defned as a trade-off between the multiple benefts and sacrifces
of a suppliers offering (Eggert and Ulaga 2002, p. 110). Therefore it is valid to posit that
an organizational buying process tries to provide the value for the forthcoming member
of supply chain. In this case, the supply chain orientation is leveraged both downstream
and upstream. When analyzing value construct in B2B marketing, one fnds that it of-
ten interrelates with the concept of satisfaction. Researchers are making a clear distinc-
tion between value perception and customer satisfaction (Eggert and Ulaga 2002). Value
perception is considered to be a cognitive, and satisfaction an affective, state of mind.
Gross (1997) pointed out that the satisfaction construct needs to be replaced with value
perception, as the purchasing managers buy for economic rather than emotional reasons.
However, there is also a clear connection between these two constructs in a cause-related
interaction. In their research, Eggert and Ulaga (2002) proposed that satisfaction serves
as a good mediator in a model in which the value perception infuences behavioral inten-
tions. On the other hand, value perception is commonly measured by economic, techni-
cal, social, and service dimensions (Liu, Leach, and Bernhardt 2005). These dimensions
cover all aspects of value perception important for understanding the value deliverance
process in business markets. So it is legitimate to emphasize that the role of value percep-
tion in the B2B market is twofold: 1) The value creation for the forthcoming member of
the chain and 2) Supplier relationship development. Involvement in the buying process
represents the crucial construct in organizational buying research. Vertical involvement
refers to a number of managerial levels involved in the buying process, whereas lat-
eral involvement refers to the number of functional departments involved (Johnston and
Bonoma 1981). The latter represents an interesting construct from the aspect of marketing
Table 2 Effectiveness concept transformation (Source: Author)
Original concepts from organization/
management literature and research
Transformed concept for the purposes of organizational
buying effectiveness measurement
Organizational properties (decentralization) Level of lateral involvement in organizational buying task
Attention orientation (external); Means
and ends relationship
Value perception (for the purpose of value creation for the forth-
coming member of the supply chain)
Participation in decision making Decentralization of decision making in organizational buying
tasks
180 jbm vol. 2, 2008/4
in the supply chain context. Rossome (2003), in her conceptual work, suggests that intra-
organizational information exchange should be regarded as an activity of lateral involve-
ment in the sense that more information gathered from all functional departments within
company helps to achieve a better understanding of the customer needs. Deliverance
of quality products and services requires multiple internal marketing exchanges among
the different functional areas. Marketings interactions with other functional departments
(Kahn and Mentzer 1998, Krohmer, Homburg, and Workman 2002) and its role in supply
chain management (Min and Mentzer 2000) necessitates the appearance of boundaryless
marketing activity in which all departments must adopt the marketing orientation the
value creation to satisfy the ultimate consumer needs. Buckles and Ronchetto Jr. (1996)
imply that cross-functional integration efforts have the mission to improve organizational
buying effectiveness. Having this in mind, it is justifed to view the lateral involvement as
an important element of organizational buying effectiveness. Lateral involvement deter-
mines which factors will infuence the buying situation (Lewin and Donthu 2005). Recent
research in the area of organizational buying suggests that there are signifcant differ-
ences between users and buyers in terms of decision making involvement and satisfaction
(Chakraborty, Srivastava, and Marshall 2007, Moon and Tikoo 2002). These research
efforts confrm lateral involvement as the crucial variable in the organizational buying
effectiveness construct. The centralization of decision making has been a well-studied
construct in organizational buying behavior research (Lau, Goh, and Phau 1999, McCabe
1987, Speakman and Stern 1979). However, decentralization arises as the main premise
that could be enrolled in measuring effectiveness. Buying center decentralization refers
to the buying centers wherein more than one participant holds infuence over the organi-
Figure 3 Organizational buying effectiveness in supply chain context (Source: Author)
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zational buying decision making process. The more people involved in organizational
buying decision making, the more the value will be leveraged from the procurement side.
Infuence from more people in a company generates internal marketing exchanges that
occur in which all departments have a share in the decision making and provide the speci-
fcation of value to be derived from the supply side. As can be noted, there is an explicit
interaction between value perception, lateral involvement, and decentralization.
The overall model described in Figure 3 provides an interesting framework to specify
the value creation and transformation process from a supplier to a consumer. As can
be noted, the etymology (supplier, manufacturer, and customer) is relative, as the pro-
posed model can be used in any part of the chain research. The value added function is
a responsibility of every partner in the supply chain. The core premise behind the value
added creation and transfer is determined by the specifcs of the industry in which the
chain member operates. A manufacturer adds value by producing differentiated products;
a retailer adds value by providing the product in the right place, at the right time, and in
the right quantity for the ultimate consumer. The transvectional basis (ongoing exchange
relationships) is the key behavioral integrator driven by trust, commitment and interde-
pendence. The perception of value is an outgoing process in which the organizational
buying center (or purchasing agent on behalf of the organization) must defne the standard
requirements for products and services in terms of the economic, technical, social, and
service characteristics discussed previously. Moreover, the value perception process is
parallel to a purchasing managers ability to recognize the forthcoming customers need
in the chain. Lateral involvement proposes that the more departments are involved in
organizational buying, the more input is included for better value evaluation. The decen-
tralization of decision making enables input resulting from higher lateral involvement to
get a position in the value evaluation process. Overall, the model describes the value crea-
tion, transformation, and deliverance process and defnes the focal role of the purchasing
manager in value purchasing driven by forthcoming customer needs.
Conclusion
There has not as yet been much research regarding the value concept in the supply chain
context. Value has been prime interest of scholars in B2C marketing research, especially
in the area of CRM and CAM (Customer Asset Management). Yet the main distinction be-
tween the B2C and B2B value issues in SCM should be retrospective segregation of the
value creation process, which does not start with the retail sale, but rather is rooted in the
frst tier supplier production process. The confrontation between organizational buying and
customer relationship management center infuences the whole new dimension through the
relationship marketing paradigm. Formerly developed on a transactional basis, and mea-
sured by effciency, B2B relationships are advancing towards a transvectional form where
the long-term orientation becomes the dominant element. Concerning the marketing chan-
nel functionalism, the transvectional nature of relationships endorses the role of the other
members in a value creation and deliverance process. Effciency has been considered the
most important measurement tool of organizational buying performance in which the main
task was to purchase goods at the lowest possible cost while maintaining the quality stand-
182 jbm vol. 2, 2008/4
ard of product/service. This internal inspection and product orientation in purchasing pro-
cess inevitably leads to the appearance of myopia, in which the role of purchasing does not
become a boundary spanning activity which should deliver the value for its customers, in
this case, for the forthcoming member of the chain. The philosophy of supply chain func-
tionalism is based on the win-win principle, which stresses the importance of the notion
that the success of one member depends on the success of all members of the chain. The
organizational buying effectiveness facilitates a retrospective analysis of the value crea-
tion process. A supply chain context confrms transvectional theory in which the long term
orientation on valuable customers and suppliers enhances the value creation process and
supplies chain visibility. Effective purchasing should adapt marketing orientation, not just
supplier orientation, in order to pursue an orientation on the whole chain. Therefore, the
transactional approach will not leverage the proft and win situation for all members un-
less an orientation on the fnal consumer needs prevails over the short term transactional
profts. This is parallel to the relationship marketing principles, in which customer reten-
tion leads to increasingly added proft. The same philosophy is easily adopted on the sup-
plier side, in which the relationship retention with valuable suppliers lowers the costs and
the idiosyncratic investments prevent the opportunistic behavior of the partners engaged in
the relationship. The organizational buying effectiveness measurement involves an analy-
sis of how marketing objectives are to be met. In this case, ultimate consumer satisfaction
through retention and repurchase intention should serve as benchmarks of overall supply
chain performance. Regarding the value concept research in a B2B setting, and following
the recent arguments by Lindgreen and Wynstra (2005), organizational buying effective-
ness should be used as a value development mechanism. Although this conceptual work
focuses only on dyadic relationships in the chain, the same methodology should be utilized
in various levels of the chain respecting the nature of the industrial setting. Methodological
aspects of this conceptual work should initiate various research strategies from which the
social network analysis and snowballing technique emerge as the ideal tools for the empir-
ical assessment of this research area. Managerial implications include the notion that val-
ue analysis would help to demonstrate the process of a value creation, transformation, and
deliverance. Using such an approach should clearly help companies to defne the strate-
gic and operative relationships with partners in the supply chain regarding the value cre-
ation process. This should be a function of optimizing the supplier and customer relation-
ship strategies through a wide choice of supplier incentives and development programs as
well as loyalty and sales promotion programs towards customers. Companies should ob-
serve the whole chain as a value creation mechanism, and should strive to focus their pur-
chasing strategies by having in mind the ultimate consumer needs.
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