An empirical study on key factors for purchasing strategy on project based organizations: A case study of gas field development projects


Aboulfazl Kazazi, Jamshid Salehi Sadaghiyani and Sohrab Sohrabiaraghi


One of the primary concerns in development of oil and gas resources is to find the critical success factors associated with different important projects. Purchasing and procurement plays a key role in these projects. There is no doubt that in history of similar studies, there are not much studies to determine key factors. The proposed study of this paper presents an empirical study to find these factors in one of the most important gas filed in Iran is now South Pars Gas Field. The study distributes a questionnaire consists of various questions associated with purchasing activities. We investigate the feedbacks gathered from decision makers using factor analysis. The results of our survey reveal that there are three categories of organizational strategy, the relative importance of strategy and risk according to factor analysis. Each factor consists of many other factors and the relative importance of all factors are investigated.


DOI: j.msl.2012.03.009

Keywords: Critical success factors ,LISREL ,Project based organization Purchasing ,Purchasing strategy ,Exploratory factor analysis Conformity factor analysis Projects

How to cite this paper:

Kazazi, A., Salehi Sadaghiyani, J., & Sohrabiaraghi, S.(2012). An empirical study on key factors for purchasing strategy on project based organizations: A case study of gas field development projects.Management Science Letters, 2(4), 1123-1132.


References

Ahnam, S. )2002(. Strategic sourcing of suppliers in a supply network. proceeding of 11th International IPSERA conference, Enschede, The Netherlands, 1-10.

Bartlett, C.A., Ghoshal, S., Birkinshaw, J. )2004(. Developing coordination and control: the organizational challenge. McGrew Hill Irwin ,Boston, 339-355.

Bensaou, B.M.) 1999(. Portfolios of buyer-seller relationships. Sloan Management Review Summers, 35-44

Cammish, R., Keogh, M. )1991(. A strategic role for purchasing. The Mackinsey Quarterly, 3, 22-39.

Croom, S.R. )2000(. The impact of web-based procurement on the management of operating resources supply. The Journal of Supply Chain Management. 36(1), 4-13.

Cronbach, L. J. (1951). Coefficient alpha and the internal structure of tests. Psychometrika, 16(3), 297-334.

Dobler, D.W., & Burt, D.N. )1996(. Purchasing and supply management, 6th ed., McGrew-Hill,Newyork.

Dubois, A., & Pedersen, A.C. (2002). Why relationships do not fit into purchasing portfolio models – a comparison between the portfolio and industrial network approaches. European Journal of Purchasing & Supply Management, 8, 35-42.

Dyer, J.H., Sungcho , D., & Chv, W. (1998). Strategic Supplier segmentation : The next "Best Practice" in supply chain management . California Management Review , 40(2).

Eccles, R. )1981.( The quasi-firm in the construction industry. Journal of Economic Behaviour and Organization, 2, 355-357.

Eriksson, M. )2005(. Procurement of complex technical systems. Doctoral thesis, Royal Institute of Technology.Engwall, M. (2003). No project is an Island: linking projects to history and context. Research Policy, 32(5), 789-808.

Gadde, L.E., Hakansson, H. )2001(. Supply network strategies. Wiley, Chichester.Gelderman, C., & Van Weele , A.j. )2005(. Purchasing portfolio Models: A Critique and Update. The Journal of Supply Chain Management : A Global Review of Purchasing and Supply.

Kraljic, P. (1983). Purchasing must become supply management. Harvard Business Review, 61, 109-117.

ISO 10006 (2003) Quality management system. Guidelines for quality management in projects jaakko poyry Group.

Lilliecreutz, J. & Ydreskog, L. )1999(. Supplier classification as an enabler for differentiated purchasing strategy. Global Purchasing and Supply Chain Management, 66-74.

Likert, R. (1932). A Technique for the Measurement of Attitudes. Archives of Psychology, 140, 1–55.

Monckza, R.M, & Trent, R.J. ) 2002(, Purchasing and supply chain management. 2nd ed., Madson.

Murray, J.G. (2001). Local government and private sector purchasing strategy: a comparative study. European Journal of purchasing & Supply Management, 7, 91-100.

Nellore , R., & Soderquist. K. (2000). Portfolio approaches to procurement, analyzing the missing link to specifications. Long Range planning, 33, 245-267.

Ogden, J.A., Petersen, K.S., Carter, J.R., & Monczka, R.M. (2005). Supply management strategies for the future: A Global Review of Purchasing and supply, 43(3), 29-42.

Olsen , R.F. ,& Ellram L.M. (1997). A Portfolio approach to supplier relationships. Industrial Marketing Management, 26, 101-113.

Parrod , N. Thierry, C. , Fargier , H. , & Cavaille, J. (2007). Cooperative Subcontracting relationship within a project supply chain : A Simulation approach . Simulation Modeling Practice and Theory, 15, 137-152.

Tikkanen., K. J., & Artto, K. (2007). The marketing Strategy of a project – based firm: the four portfolios Framework. Industrial Marketing Management, 36, 194-205.

Trautmann, G. , Bals, L., & Hartmann, E. (2009). Global Sourcing in integrated network structures : The Case of hybrid purchasing organizations. Journal of International Management, 15 (2), 194-208.

Turner, J. R. ) 1999(. The Handbook of Project – Based Management ; 2nd ed., McGraw – Hill; Uk.

Van Weele, A.J., & Geldrman, C.J. (2003). Handling Measurement issues and strategic directions in kraljics purchasing portfolio model. Journal of purchasing and supply management , 9, 207-216.

Van Weele A.J., & Gelderman C.J. (2002). Strategic Direction through purchasing portfolio Management: A Case study. The Journal of supply chain Management, 38, 30-37.

Yeo, K., & Ning , J.H. (2002). Integrating supply chain and ritical chain oncepts in engineer – procure – Construct (EPC) Projects. International Journal of Project Management, 20, 253-262.

Zolkiewski, J., & Turnbull , P. (2001). Relationship portfolios-past present and future. Proceedings of 17th Annual IMP Conference, Oslo, Norway, 2001.Van Weele, A. (2002). Purchasing and supply Chain management, 3rd ed., Thomson learning. London, 363.Yeo. K., & Ning, J. (2002). Integrating supply chain and critical chain concepts in engineer- procure- construct (EPC) projects. International Journal of Project Management, 20(4), 253-262.