8
European Management Journal Vol. 16, No. 6, pp. 698–705, 1998 1998 Published by Elsevier Science Ltd. All rights reserved Pergamon Printed in Great Britain 0263-2373/98 $19.00 1 0.00 PII: S0263-2373(98)00046-2 Organisational Buying Behaviour in Changing Times KEITH THOMPSON, Institute for Advanced Research in Marketing, Cranfield School of Management HELEN MITCHELL, Institute for Advanced Research in Marketing, Cranfield School of Management SIMON KNOX, Institute for Advanced Research in Marketing, Cranfield School of Management In a recent paper, Johnston and Lewin (1996) ana- lyse the stream of research on organisational buyer behaviour published over the past 25 to 30 years isolating eight propositions which they encapsulate in their ‘Risk Continuum’. Our paper, reports a comparison between Johnston and Lewin’s analysis of the extant literature and current buying practices as revealed by interviews with senior UK buyers. We found that business practice has changed in the intervening years. New, process-driven manage- ment styles are changing the way in which UK buy- ers and suppliers interact, yet work reflecting this change (by, for instance, the European based IMP Group) is under-represented in textbooks and teaching. We question the continuing predomi- nance of the established risk management view of organisational buyer behaviour based upon research conducted in the USA 30 years ago. 1998 Published by Elsevier Science Ltd. All rights reserved Introduction In 1996 Johnston and Lewin set out to, ‘analyse... the stream of research that conceptually and empirically scrutinised the original models’ of organisational buyer behaviour. Their analysis was based upon 165 articles dealing directly with organisational buying behaviour from six selected journals: Journal of Mar- keting, Journal of Marketing Research, Journal of Business and Industrial Marketing, Journal of Business-to-Business Marketing, Industrial Marketing Management, Journal of Business Research. Drawing upon the content of these European Management Journal Vol 16 No 6 December 1998 698 articles, the authors presented their views of what has been learned about organisational buying behav- iour and offered a ‘macro-view’ of the literature. From this analysis they developed ‘The Risk Con- tinuum’ which provides the focus for the study reported here. The Risk Continuum It is notable that the core of Johnston and Lewin’s analysis was based upon research that was under- taken more than 25 years ago [Robinson et al. (1967), noted for the ‘buygrid framework’, Webster and Wind (1972) who presented their ‘general model for understanding organisational buying behaviour’ and Sheth’s ‘model of industrial buying behaviour’ (Sheth, 1989)]. The starting point for Johnston and Lewin (1996) was speculation by Robinson et al. (1967) in proposing their ‘buy task’ model, that much of the variation in organisational buying behaviour appeared to be related to the levels of risk associated with a purchase. Purchase risk, they said, was a func- tion of the: (a) importance of a particular purchase; (b) complexity associated with the purchase; (c) uncertainty of the purchase, and (d) need to reach a decision quickly. In addition to these factors, Johnston and Lewin (1996) observed that the amount of risk involved in a purchase can be influenced by the existence and strength of any buyer–seller relationship and/or communication network. They propose that, in gen-

Organisational buying behaviour in changing times

Embed Size (px)

Citation preview

Page 1: Organisational buying behaviour in changing times

European Management Journal Vol. 16, No. 6, pp. 698–705, 1998 1998 Published by Elsevier Science Ltd. All rights reservedPergamon

Printed in Great Britain0263-2373/98 $19.00 1 0.00PII: S0263-2373(98)00046-2

Organisational BuyingBehaviour in ChangingTimesKEITH THOMPSON, Institute for Advanced Research in Marketing, Cranfield School ofManagementHELEN MITCHELL, Institute for Advanced Research in Marketing, Cranfield School ofManagementSIMON KNOX, Institute for Advanced Research in Marketing, Cranfield School ofManagement

In a recent paper, Johnston and Lewin (1996) ana-lyse the stream of research on organisational buyerbehaviour published over the past 25 to 30 yearsisolating eight propositions which they encapsulatein their ‘Risk Continuum’. Our paper, reports acomparison between Johnston and Lewin’s analysisof the extant literature and current buying practicesas revealed by interviews with senior UK buyers.We found that business practice has changed in theintervening years. New, process-driven manage-ment styles are changing the way in which UK buy-ers and suppliers interact, yet work reflecting thischange (by, for instance, the European based IMPGroup) is under-represented in textbooks andteaching. We question the continuing predomi-nance of the established risk management view oforganisational buyer behaviour based uponresearch conducted in the USA 30 years ago. 1998Published by Elsevier Science Ltd. All rightsreserved

Introduction

In 1996 Johnston and Lewin set out to, ‘analyse... thestream of research that conceptually and empiricallyscrutinised the original models’ of organisationalbuyer behaviour. Their analysis was based upon 165articles dealing directly with organisational buyingbehaviour from six selected journals: Journal of Mar-keting, Journal of Marketing Research, Journal of Businessand Industrial Marketing, Journal of Business-to-BusinessMarketing, Industrial Marketing Management, Journal ofBusiness Research. Drawing upon the content of these

European Management Journal Vol 16 No 6 December 1998698

articles, the authors presented their views of whathas been learned about organisational buying behav-iour and offered a ‘macro-view’ of the literature.From this analysis they developed ‘The Risk Con-tinuum’ which provides the focus for the studyreported here.

The Risk Continuum

It is notable that the core of Johnston and Lewin’sanalysis was based upon research that was under-taken more than 25 years ago [Robinson et al. (1967),noted for the ‘buygrid framework’, Webster andWind (1972) who presented their ‘general model forunderstanding organisational buying behaviour’ andSheth’s ‘model of industrial buying behaviour’(Sheth, 1989)]. The starting point for Johnston andLewin (1996) was speculation by Robinson et al.(1967) in proposing their ‘buy task’ model, that muchof the variation in organisational buying behaviourappeared to be related to the levels of risk associatedwith a purchase. Purchase risk, they said, was a func-tion of the: (a) importance of a particular purchase;(b) complexity associated with the purchase; (c)uncertainty of the purchase, and (d) need to reach adecision quickly.

In addition to these factors, Johnston and Lewin(1996) observed that the amount of risk involved ina purchase can be influenced by the existence andstrength of any buyer–seller relationship and/orcommunication network. They propose that, in gen-

Page 2: Organisational buying behaviour in changing times

ORGANISATIONAL BUYING BEHAVIOUR IN CHANGING TIMES

eral, as the risk associated with an organisational pur-chase increases:

1. The buying centre will become larger and morecomplex.

2. Participants will be motivated to expend greatereffort and deliberate more carefully throughoutthe process.

3. Sellers who offer proven products and solutionswill be favoured.

4. Information search will be active and a wide var-iety of sources will be used.

5. Within the buying firm conflict between parti-cipants will increase.

6. In new task purchase situations, a ‘decide-as-you-go’ approach may be used.

7. Role stress will increase because of two factors.8. Buyer/seller relationships and communication

networks will become increasingly important inhigher risk purchase situations.

Johnston and Lewin’s eight propositions are set outin detail later in this paper. Although they were notwritten in terms which make them insufficientlyoperational to allow testing as hypotheses, neverthe-less they represent the distillation of 25 years of workon risk in organisational buyer behaviour. Therefore,we set out to assess their saliency against our find-ings from a recent study of high cost, new buy organ-isational purchases.

Method

Following Robinson et al. (1967); Johnston and Lewin(1996), we selected respondents who had recentlymade a purchase that satisfied the following criteria:

1. Importance of a particular purchase: managers insenior buying positions directly involved in a sin-gle business-to-business purchase of over £100,000made during the last six months.

2. Complexity associated with the purchase: a techni-cally and commercially complex purchase.According to Lehmann and O’Shaughnessy (1974)the latter largely follows from the value and thepolitical problems associated with large capitaloutlays.

3. Uncertainty of the purchase: purchases were either‘new buys’, or ‘modified re-buys’, both character-ised by a high degree of uncertainty and risk.

The criterion ‘need for a quick decision’ was judgedto be an inappropriate quota device because we feltthat time pressures would lead to short-circuiting ofthe purchase process and introduce a lack of compar-ability between cases. Therefore, the first three ofRobinson et al.’s, criteria were deemed sufficient toensure that the purchases were relatively high in risk.

European Management Journal Vol 16 No 6 December 1998 699

Alumni of the Cranfield MBA were approached andasked to direct us to colleagues in senior buying pos-itions within their companies that were engaged inpurchases likely to meet our criteria. A brief descrip-tion of our research aims, the required purchasevalue and the need to examine a recent purchase wassent by post to potential respondents so that eachfully understood our reasons for the interview. Thiswas followed up by short telephone interviews todetermine whether the named buyers met our cri-teria, and to ensure that they were willing to be inter-viewed for about two hours. During the interviewswe also established a purchase process model whichall respondents could relate to. Interviews were thenarranged with eight senior buyers selected from ouroriginal list of 26. Respondents were chosen from avariety of industry sectors in order to obtain data thatwere not sector specific. The eight purchases selectedfor our research were drawn from:

❖ Major services (2)❖ Large volume components (2)❖ Bulk volume utility (1)❖ Systems IT equipment (1)❖ High value industrial goods (2)

Semi-structured, depth interviews were conductedaccording to a five-stage, sequential interview proto-col during 1996. The stages of this protocol corre-sponded to the stages of the purchasing processwhich had been identified by the respondents in thepreliminary interviews:

❖ Technical Specification❖ Awareness Set❖ Consideration Set❖ Choice Set❖ Selection and Ratification

The interviews ranged from a minimum of one andthree quarter hours to three and a quarter hours.Each interview was tape recorded with the respon-dent’s agreement.

Findings

The taped interviews were first transcribed into ordi-nary word processing files. The transcripts were thenstudied and all clauses pertaining to Johnston andLewin’s eight propositions were isolated. Three ‘rat-ers’, working independently of each other, then com-pared these clauses with Johnston and Lewin’s ‘RiskContinuum’ propositions. A pairwise comparisonyielded inter-rater agreement of 87 per cent. Dis-agreements were resolved jointly between the threeraters.

Each of Johnston and Lewin’s (1996) ‘Risk Con-

Page 3: Organisational buying behaviour in changing times

ORGANISATIONAL BUYING BEHAVIOUR IN CHANGING TIMES

tinuum’ propositions is set out in full below, fol-lowed by our observations on their applicability tohigh risk organisational buying behaviour.

Proposition 1

‘The buying group (centre) will become larger andmore complex. That is, more people will be involvedin the purchase decision throughout the differentstages of the purchase process and these people willbe drawn from, or represent, a greater variety ofdepartmental and/or organisational interests.Additionally, buying centre participants will gener-ally be of higher organisational status and authority,or, if not, the buying centre will not have the auth-ority to make the final purchase decision. Instead itsfunction will be to: (1) gather and evaluate relevantinformation and (2) to make recommendations to oneor more members of upper-level management.’(Johnston and Lewin, 1996, p. 8).

We found that in all of the respondent companies,groups were formed specifically to carry out thesehigh risk purchases. These groups were formal, pro-cess-driven teams, drawn from a variety of depart-ments and enjoying considerable status within theorganisation. They operated in a climate of trust intheir professionalism and the rigour of their procure-ment processes, and their decisions were very rarelyoverruled. One Purchasing Director described hisrole thus:

We have a fairly flat structure, probably about 10% of thedecisions would come to me just to be ratified. The othersI would be made aware of as on-going decisions and, ifthere was anything I was concerned with, I could say butthat doesn’t often happen.

Figure 1 Process-driven Procurement Model

European Management Journal Vol 16 No 6 December 1998700

Formalised buying centres are not new, but those weencountered were notable for their, confident, auth-oritative, team-orientated approach. The team leader,usually a senior manager, undertook a process ownerrole, working in co-operation with the other cross-functional team members as a facilitator but holdingthe casting vote in the event of a split decision(Figure 1).

Nevertheless, the first part of Johnston and Lewin’sproposition is supported by our findings, especiallywith regard to the status and authority of the buyingteam. We have no direct evidence with which toassess the proposition that more people would beinvolved as the perceived risk of a purchaseincreased (most teams consisted of 7–10 members,regardless of the value of the purchase). Certainly,membership of the buying teams represented a widevariety of departmental and organisational interests:

The team which evaluates prospective new suppliers isn’tjust purchasing driven. We involve people such as productdevelopment team..... our design colleagues, and increas-ingly our logistics and manufacture colleagues. It is verymuch a team-based approach.

However, the teams functioned in a way apparentlynot envisaged by Johnston and Lewin (1996), and wefound no evidence of their corollary regarding buy-ing centres which lacked the authority and status tomake the final purchase decision. It seems likely thattraditional ad hoc buying centres may still exist forlower value, less complex purchases, but in thehigher risk purchases we studied, they had beenreplaced by a buying team with a quite different wayof doing things that was formal, process-driven androoted in cross-functional co-operation.

Page 4: Organisational buying behaviour in changing times

ORGANISATIONAL BUYING BEHAVIOUR IN CHANGING TIMES

Proposition 2

‘Participants in the purchase decision-making pro-cess will be more educated and possess greater levelsof experience in their particular area of expertise.Also, as the importance associated with the purchasedecision is high, participants will be motivated toexpend greater effort and deliberate more carefullythroughout the purchase process. This heightenedlevel of motivation will be most keenly felt by thosemembers of the buying centre whose departments orwork associates will be directly impacted by the finalpurchase decision.’ (Johnston and Lewin, 1996, p. 8).

Johnston and Lewin (1996) couched this propositionin particularly vague terms. However, we did findthat members of the buying teams were generallywell educated and experienced:

We are very proud of our learning opportunities. We havea lot of buyers who have a high technical competence eventhough they might not have a formal engineering qualifi-cation. Of the total population of our purchasing personnel,about 350 people, about 65 per cent have recognised engin-eering qualifications. So there is a high level of technicalcompetence.

We also found them to be highly motivated to seekand evaluate the most appropriate suppliers duringthe purchase process. But, although it seems reason-able for Johnston and Lewin (1996) to propose that,‘This heightened level of motivation would be mostkeenly felt by those whose departments or workassociates will be directly impacted...’ In practice, thebuying teams we encountered expressed holisticviews which transcended their functions, seeking co-operative solutions rather than managing downsiderisk:

We took buyers and engineers and made them into, Iwould say, business people.

If anyone, I feel responsible to the Marketing Departmentas any decision I make can affect customers.

Proposition 3

‘Sellers who offer proven products and solutions willbe favoured. Product quality and after sales servicewill be of the utmost importance. Price, while alwaysimportant, will be considered only after product andservice criteria have been fully met. In general, onlywhen (after careful scrutiny) two or more sellersappear equally capable of satisfying purchaserequirements, will price play a dominant role in thepurchase decision.’ (Johnston and Lewin, 1996, p. 8).

The views of two of our eight respondents were atodds with the need for already proven products andsolutions, highlighting their faith in the ability of

European Management Journal Vol 16 No 6 December 1998 701

their team-based buying approach to gather and pro-cess information about new solutions. However, themajority of buying teams confirmed the importanceof proven products and bespoke solutions, where thequality and after-sales services and fit were para-mount. One respondent in particular felt verystrongly that this was the case:

I had a company recently offer us a pump at a ridiculouslylow price and then they tried to screw us with the consum-ables. So we do tend to stick with reputable companies like(examples) because they are reliable in both supply andservice.

This was reinforced by another respondent whoregularly bought a specific industrial brand because:

It is well known and well respected. An engineer wouldnot give himself a problem if he used their products.

Buying teams were concerned about deliveryreliability, pre-sales and post-sales support as earlyas the specification stage of the purchase process.Engineers evoked the value of industrial brands asan expression of the supplier’s reputation in respectof these criteria;

There is an element of branding that comes into it—asmuch as engineers can have preferences for brands—thatpreference is not so much driven by performance criteriabut more by the after-sales support and pre-sales supportthey are looking for.

Johnston and Lewin’s view on the secondary role ofprice was fully supported. Over-dependence on pricewas specifically avoided by the buying teams, as oneof the respondents explained:

We set a hurdle over which companies have to pass to beshort listed; we try to satisfy ourselves that we have metour minimum criteria which help us to stop buying intoprice and commodity.

Price was an important decision criteria, but Johnstonand Lewin’s assertion that price will play a dominantrole when two or more sellers appear equally capableof satisfying purchase requirements was not sup-ported by our findings. Suppliers included in the‘choice set’ were eventually required to complete for-mal tender documents and to make presentations tothe buying team. At that point, corporate and per-sonal contacts were established and less tangibleattributes concerning relationships and corporate fitbegan to play an increasingly important role,especially as most respondents envisaged an involv-ing association or partnership with the chosen supplyorganisation. These partnership considerations couldeasily outweigh a price advantage, and in one case‘softer’ factors, like trust, personal compatibility andcultural fit between organisations were sufficientlyimportant to outweigh a price disadvantage of sev-eral hundred thousand pounds in the purchase ofconsultancy services. Presumably, if two or moresuppliers were considered to be of equal merit then

Page 5: Organisational buying behaviour in changing times

ORGANISATIONAL BUYING BEHAVIOUR IN CHANGING TIMES

price would play a dominant role. But in practice thelack of precision inherent in the more emotive,relationship building factors militates against thelikelihood of a ‘dead heat’ contest.

Proposition 4

‘Information search will be active and a wide varietyof information sources will be used to guide and sup-port an important decision. Buying centre parti-cipants will rely more heavily on impersonal, com-mercial information sources (e.g. trade publications,sales literature) during the earlier stages of thedecision process. However, as the procurement pro-cess progresses, personal noncommercial informationsources (e.g. outside consultants, other organisationsthat have already made similar purchases) maybecome more important.’ (Johnston and Lewin, 1996,p. 8).

We found ample support for this proposition regard-ing active and wide information search. However,our findings reflect a slightly different sequence tothat proposed, as the use of personal, noncommercialsources was found to precede impersonal sources inthe procurement process. An important early filter ofpotential suppliers was their reputation within theindustry, and impersonal sources usually only cameinto play after the consideration set had been determ-ined. ‘Noncommercial’ information sources in theform of outside consultants were sometimes broughtin at the earliest stages of the purchasing process asmost respondents sought, and were influenced bycolleagues with technical expertise from the verybeginning. In two of our cases, technical staff wereemployed on global sourcing as their full-time remitin order to provide generic specifications for theorganisation’s needs. This reliance on technicallyqualified or expert colleagues at the technical speci-fication stage of a purchase seems unremarkable, andit seems odd that Johnston and Lewin (1996) shouldhave concluded otherwise.

Other differences between Johnston and Lewin’s his-torically based findings and what we found to be cur-rent practice are mainly attributable to the process-driven approach noted under Proposition 1. Forinstance, ‘organisations that have already made simi-lar purchases’, did not become more important as theprocurement process progressed because their viewswere constantly monitored by the respondent organ-isations and incorporated into purchase decisionsright from the start:

Sometimes the (non-competitor company) buyer will ringme and ask if we had ever had a similar problem, and howwe had solved it. Companies do talk to each other. We talkto (a major competitor) on a daily basis about what is goingon, best in class for things—you have to protect yourindustry.

European Management Journal Vol 16 No 6 December 1998702

Proposition 5

‘Departments (through their representatives) will beinvolved in the purchase decision—departments(through their representatives) will be involved in thepurchase decision—a greater diversity in the depart-mental perspectives and motivations will lead togreater conflict, and (2) as the purchase outcome isimportant, buying centre participants will be reluc-tant to make concessions without some form ofreciprocal reward. Therefore, among buying centreparticipants a ‘bargaining’ negotiation strategy willmost likely be used. In contrast, however, the negoti-ation strategy most likely to be used between thebuying and selling firms is a collaborative or prob-lem-solving approach. In these cases the buyingfirm’s primary goal is to find the best solution to animportant purchase problem and/or to reduce therisk associated with an uncertain purchase outcome.Consequently, rather than being confrontational oraggressive, negotiations between buyers and sellersfocus on co-operation and information exchange inan attempt to discover the best solution to the pur-chase problem.’ (Johnston and Lewin, 1996, p. 8).

We concur with the expectation of greater co-oper-ation and information exchange between buyers andsellers in pursuit of optimal solutions to purchasing.This shift in emphasis has been well documented inthe Relationship Marketing literature (see e.g. Ford,1990; Christopher et al., 1991). This was often drivenby buyers who valued the less tangible, problem-solving attributes surrounding the product as thepurchasing process developed. The need for sellersto respond by adopting the customised response, asespoused by Egan et al. (1991), was succinctlyexpressed by one of our respondents:

What we tend to find is that companies are out ofsynchronisation between what they are selling and whatthe customer actually wants, and that is where potentialconflict comes in. They try and sell you bulk chemicals andwhat you want is service, systems and programmes.

However, pace Johnston and Lewin (1996), we did notobserve any contrasting increase in conflict or reluc-tance by buying team members to make concessionson behalf of their departments. The reasons for thisrelate to our findings that support Proposition 1 viz.high risk purchases were made by cross-functional,process-driven teams in which the team leader actedas facilitator dedicated to achieving consensus. Theseteams were not, therefore, ad hoc buying centresinvolving participants who occupy various roles withconflicting goals, but teams united in the attainmentof the common goal of finding the best business sol-ution to a purchasing problem.

Proposition 6

‘The decision rules used in any purchase situationare fundamentally firm specific. In general, however,

Page 6: Organisational buying behaviour in changing times

ORGANISATIONAL BUYING BEHAVIOUR IN CHANGING TIMES

most firms have some formalised purchase situ-ations. However, in new task purchase situations(where outcome uncertainty is increased) it may bedifficult or inappropriate to use established pro-cedures and guidelines. Thus, buyers may be forcedto use a “decide as you go” approach to the purchasedecision process.’ (Johnston and Lewin, 1996, p. 9).

We found that buyers were not so much forced to usea ‘decide as you go’ approach as willing participantsin a process which helped them to achieve an optimaloutput. In dealing with high risk purchases the firmsinvolved in our study dealt with the problem of sig-nificant new task situations by empowering the buy-ing teams already described above. Commonality ofpurpose, empowerment and flexibility forged anantidote to risk which allowed the teams to think cre-atively, because the challenge became exciting ratherthan threatening:

We are always excited when we find a new supplier. Weknow most of them. We have brought them up fromnothing, investing in them because we saw the potential.

Proposition 7

‘Role stress will increase because of two factors. First,as size and complexity of the buying centre increases,greater conflict between participants with differingperspectives and motivations is inevitable. And,second, in a highly visible, (important) purchasewhere the outcome is uncertain the chances of mak-ing a wrong decision and the associated problemsand consequences of a wrong decision increase par-ticipant stress’. (Johnston and Lewin, 1996, p. 8).

None of our respondents reported evidence of rolestress within the teams. Once again, the creation ofbuying teams appears to have reduced the potentialfor stress-inducing rivalries inherent in the old ad hocbuying centres:

... any disagreement is minimal because we operate thisteam approach. Nine out of 10 times we follow the sameline because we have all done the same work, we under-stand the scenarios, and the expectation is that we willcome up with the right decisions. It is more a question ofexplaining the rationale and getting a buy-in—not justimposing.

Furthermore, due to the flexibility and, especially, theempowerment of these teams the stress induced bya threatening work environment is reduced becauseof senior management’s confidence and trust intheir abilities:

My company has faith in their employees, it is more a caseof... guidance.

You don’t really have anyone that judges. Obviously I have

European Management Journal Vol 16 No 6 December 1998 703

to write a commercial evaluation to recommend a certainsupplier which all the team will sign up to.

Proposition 8

‘Interfirm (buyer–seller) relationships and communi-cation become increasingly important in higher riskpurchase situations. Awarding the contract to a sellerwhose products and services have a proven intraor-ganisational track record helps reduce the perceivedrisk associated with an important purchase. Simi-larly, established networks of communicationbetween multiple members of the buyer–seller firmsfacilitates information exchange and fosters anatmosphere of co-operation, further helping toreduce perceived risk’. (Johnston and Lewin, 1996,p. 10).

Despite the less threatening and more consensualmode of supplier selection that we identified, poten-tial new suppliers which lacked a ‘proven intraor-ganisational track record’ still experience consider-able difficulties:

Because we have used a supplier we have a good knowl-edge of their skills. Like it or not, people are influenced bypast performance—it is part of the image created.

We no longer source beyond our preferred suppliers andthat is the norm. Because the interdependence between usand our suppliers is so high there isn’t an alternative.

Most of our respondents envisaged an involvingassociation with the chosen supplier going wellbeyond the risk reducing atmosphere of co-operationenvisaged by Johnston and Lewin (1996). Intangibleattributes such as professionalism, leadership, trust,personal compatibility, and cultural fit betweenorganisations were found to be critical to the successof the supplying company.

Conclusions

Significantly, Johnston and Lewin (1996) summarisethe existing body of research into organisational buy-ing behaviour in terms of management of perceivedrisk, rather than in terms of optimal businessdecisions. Although some of the conclusions incor-porated by Johnston and Lewin (1996) into their ‘RiskContinuum’ were relevant to the cases we studiedmany were not, and our findings suggest that large,high risk purchase decisions, buying centres, ladenwith the conflicting agendas of the various parti-cipants, are being replaced by process-driven buyingteams. In leading companies value is no longer seento be created by not making mistakes, but by sup-pliers working with customers to create customervalue and wealth for both businesses. Consequently,

Page 7: Organisational buying behaviour in changing times

ORGANISATIONAL BUYING BEHAVIOUR IN CHANGING TIMES

current practice in high value, high risk buyingdecisions does not reflect that contained in marketingtextbooks. Our findings will not surprise those whoare familiar with the work of the Industrial Market-ing and Purchasing Group (e.g. Ford, 1990, 1998), buttheir European perspective is not acknowledged inJohnston and Lewin’s macro-view of the literature,or in Hutt and Speh’s classic text on organisationalmarkets (Hutt and Speh, 1995), or in almost any othertextbook originating in the USA. Most textbooks, andmost teaching still reflect a distillation of researchinto business-to-business purchasing undertaken inthe USA 30 years ago. Johnston and Lewin’s reviewof the extant literature served as a convenient vehiclefor a comparison between the perennial academicview and practice in the real world. In Europe atleast, things have moved on.

References

Bonoma, T.V., Zaltman, G. and Johnston, W.J. (1977) IndustrialBuying Behavior. Monograph Report No.77-117, Market-ing Science Institute, Cambridge, MA.

Christopher, M. (1997) Marketing Logistics. Butterworth Heine-mann, Oxford.

Christopher, M., Payne, A. and Ballantyne, D. (1991) Relation-ship Marketing: Bringing Quality, Customer Service andMarketing Together. Butterworth Heinemann, Oxford.

KEITH THOMPSON, HELEN MITCHELL,Cranfield University School Cranfield University Schoolof Management, Cranfield, of Management, Cranfield,Bedford, MK43 OAL, UK. Bedford, MK43 OAL, UK.

Keith Thompson is Senior Helen Mitchell is aLecturer in Management Researcher at Cranfield Uni-and Marketing at Cranfield versity School of Manage-University School of Man- ment, currently undertakingagement, where he teaches a doctorate in corporatebuyer behaviour and inter- branding. She has ninenational marketing, follow- years’ experience in pub-

ing industrial experience at Spillers and IBM. His cur- lishing, including Cambridge Business Publishing andrent field of research covers the roles of attitudes, IPC Magazines. Her research interests include inte-values , risk and trust in buyer behaviour. grated marketing communications, corporate brands

and the implementation of corporate branding stra-tegies.

European Management Journal Vol 16 No 6 December 1998704

Egan, C., Shipley, D. and Howard, P. (1991) The importanceof brand names in industrial markets. In Proceedings ofthe Marketing Education Group Conference. University Col-lege, Dublin.

Ford, D. (ed.) (1990) Understanding Business Markets. AcademicPress, London.

Ford, D. (1998) Managing Business Relationships. John Wileyand Sons, Chichester.

Hutt, M.D. and Speh, T.W. (1995) Business Marketing Manage-ment, 5th edn. The Dryden Press, Fort Worth.

Johnston, W.J. and Lewin, J.E. (1996) Organizational buyingbehaviour: toward an integrative framework. Journal ofBusiness Research 35, 1–15.

Lehmann, D.R. and O’Shaughnessy, J. (1974) Differences inattribute importance of different industrial products.Journal of Marketing 38, 36–42.

Moriarty, R.J. and Galper, M. (1978) Organizational BuyingBehavior: A State-of-the-art Review and Conceptualisation.Working Paper Report No. 78-101. Marketing ScienceInstitute, Cambridge, MA.

Robinson, P.J, Faris, C.W. and Wind, Y. (1967) Industrial Buy-ing and Creative Marketing. Allyn and Bacon, Boston.

Sheth, J.N. (1989) A model of industrial buyer behavior. Jour-nal of Marketing 37, 50–56.

Spekman, R.E. and Stern, L.W. (1979) Environmental uncer-tainty and buying group structure: an empirical investi-gation. Journal of Marketing 43, 56–64.

Ward, S. and Webster, F.E. (1991) Organisational buyingbehaviour. In Handbook of Consumer Behavior, eds Robertsand Kasserjian. Prentice-Hall, Englewood Cliffs, NJ.

Webster, F.E. and Wind, Y. (1972) A general model for under-standing organisational buying behavior. Journal of Mar-keting 36, 12–19.

Page 8: Organisational buying behaviour in changing times

ORGANISATIONAL BUYING BEHAVIOUR IN CHANGING TIMES

SIMON KNOX, Cran-field University School ofManagement, Cranfield,Bedford, MK43 OAL,UK.

Simon Knox is Professorof Brand Marketing atthe Cranfield School ofManagement and is aconsultant to a number ofmultinational companies,

including McDonald’s, Levi Strauss, DiverseyLeverand the Ocean Group. Prior to joining Cranfield,Simon worked for Unilever in a number of seniormarketing roles in both detergents and foods. Hepublishes extensively on brand equity issues andcustomer purchasing styles and is co-author ofCompeting on Value, published by FinancialTimes Pitman Publishing.

European Management Journal Vol 16 No 6 December 1998 705