Narrowing the Conceptual-Empirical Gap in Organizational Buying Behavior

ABSTRACT - Marketing theorists depict the organizational buying process as comprised of several organizational members, each participating, to a greater or lesser extent, in the purchasing decision. At the same time, however, there is a noticeable lack of empirical research directed at the collective level of analysis with the goal of capturing the interpersonal dynamics of the procurement process. This paper attempts to narrow the gap between conceptualizing the process of joint decision-making and empirically investigating aspects of the collectivity responsible for purchasing related decisions. Specifically, a macro-sociological and a structural role approach are discussed as two feasible methodologies.

Citation:

Robert E. Spekman and Bobby J. Calder (1978) ,"Narrowing the Conceptual-Empirical Gap in Organizational Buying Behavior", in NA - Advances in Consumer Research Volume 05, eds. Kent Hunt, Ann Abor, MI : Association for Consumer Research, Pages: 653-656.

Advances in Consumer Research Volume 5, 1978      Pages 653-656

NARROWING THE CONCEPTUAL-EMPIRICAL GAP IN ORGANIZATIONAL BUYING BEHAVIOR

Robert E. Spekman, University of Maryland

Bobby J. Calder, Northwestern University

ABSTRACT -

Marketing theorists depict the organizational buying process as comprised of several organizational members, each participating, to a greater or lesser extent, in the purchasing decision. At the same time, however, there is a noticeable lack of empirical research directed at the collective level of analysis with the goal of capturing the interpersonal dynamics of the procurement process. This paper attempts to narrow the gap between conceptualizing the process of joint decision-making and empirically investigating aspects of the collectivity responsible for purchasing related decisions. Specifically, a macro-sociological and a structural role approach are discussed as two feasible methodologies.

INTRODUCTION

In an attempt to develop an historical perspective to the study of organizational buying behavior from the aggregated, or collective, level of analysis an early study by Strauss (1962) will serve as a point of departure. Strauss, capturing the bureaucratic infighting between purchasing and other functional areas, portrayed organizational procurement as a political process in which each participant attempts to influence the purchasing decision. Interestingly, however, a great deal of the subsequent research (e.g., Leavitt, 1967; Lehmann and O'Shaughnessy, 1974; Wilson, 1971; Wind, 1970) focused solely on a key organizational member, such as the purchasing agent, and examined the extent to which various factors affected this individual's decision to select a particular vendor. While the managerial implications gleaned from an investigation of individual preferences and differences may further the development of micro-segmentation strategies (Wind and Cardozo, 1974), it is probably safe to conclude that an individual level of analysis is not very useful in capturing the dynamic interactions among those organizational members who share in the procurement process.

Beginning with descriptive studies by Robinson, Faris and Wind (1967), other researchers (Feldman and Cardozo, 1966; Gr°nhaug, 1976; Patchen, 1974; Sheth, 1973; Weigand, 1968) have built upon Strauss' representation of organizational buying as a joint decision making process. Webster and Wind (1972), in their influential analysis of organizational buying behavior, developed the concept of the buying center and thereby attempted to raise the level of analysis to include that collectivity responsible for purchasing related decisions. Embodying Strauss' conceptualization of the buying process, the buying center notion focuses on those formal and informal relationships which develop between the purchasing agent and those other organizational actors with whom he interacts during the purchasing process. It should be noted that unlike a formal structural subunit (i.e., the purchasing department or the marketing department), the buying center is a more nebulous construct, reaching across functional boundaries, whose composition can only be determined through empirical investigation.

In light of the realities of organizational decision-making (see, Cyert and March, 1963), a collective level of analysis would seem to more accurately reflect the dynamic interactions which depict the organizational procurement process. Why, then, is there a paucity of empirical research focusing on a collective level of analysis? An explanation appears to lie in the lack of an appropriate methodology. The purpose of this paper is to narrow the gap between conceptualizing the process of joint decision-making and empirically analyzing aspects of the collectivity referred to as the buying center. To achieve this goal we will explicate two methods for conducting research which reveal information about how the activities of many individuals come together to affect purchasing decisions. One approach emerges from macro-sociology and is concerned with structural properties of the buying center. The second approach evolves from role theory and emphasizes the role structure of those individuals composing the buying center.

STRUCTURAL PROPERTIES OF THE BUYING CENTER

Background

Structural properties of the buying center are obtained by analyzing data about the relations of each buying center member to some or all of its members (Lazarsfeld and Menzel, 1969). With the advent of open systems thinking (Kast and Rosenzweig, 1972), some organizational theorists (Burns and Stalker, 1959; Duncan, 1972; Galbraith, 1973; Hall, 1963; Lawrence and Lorsch, 1967) began to view the organization (as well as its subunits) as dynamic, responsive entities in continual, and necessary, interaction with its environment. In short, the organization became an information processing entity and its structural configuration defined its ability to gather and process information. Breaking from the Weberian tradition, these contingency researchers posited that some structural configurations are more adept than others for dealing with the varied environmental factors with which the organization must contend. Moreover, a basic premise of this stream of research is that of all the environmental factors with which a firm (or one of its subunits, for that matter) must contend the most pervasive and all encompassing is environmental uncertainty. By adapting its structural configuration to match the level of uncertainty in its environment, a firm (or a subunit) can facilitate the gathering and processing of information crucial to its decision-making process. [It should be noted that while uncertainty has been portrayed as an independent variable here, other researchers have relied on technology (Mohr, 1971; Woodward, 1965), size (Child, 1972) and other environmental factors as antecedents to the structural dependent variables.]

Dimensions of Structure

Following a contingency related paradigm, the buying center is conceived of as a "decision unit" whose members are charged with making purchasing related decisions (Spekman, 1977a). In this fashion, the buying center exists as a communication network which does not necessarily derive its structural configuration from the formal organizational per se; but rather from the regularized patterning of behavior and communication flows which typify the industrial procurement process. In a very real sense, the buying center's structural configuration also serves to define its decision-making potential. Extant contingency research (Duncan, 1972; Hall, 1963) has, for the most part, concentrated on four dimensions of structure: 1) centralization--the degree to which authority and responsibility rests with a particular organization member; 2) rules and procedures--the extent to which activity in an organization is formally defined; 3) division of labor--the degree to which tasks are differentiated; and 4) participation in decision making--the extent to which organizational members are involved in decision-making. From an analysis of these structural measures one is able to generate a profile of the interactions which take place in the buying center during the decision process.

As stated earlier, some structural configurations are more conducive to information gathering and processing than other forms. Specifically, a highly bureaucratized structure restricts the flow of information to rigidly established channels of communication and is best suited for decision-making when 1) time is of the essence; 2) the decision is routine in nature; and 3) environmental demands are clear and uncomplicated (Katz and Kahn, 1966). Clearly, it can be seen that a highly bureaucratized structure--with its high degree of centralization, strict rules and procedures, clearly defined and distinct division of labor, and low levels of participation in decision-making--places severe limitations on the amounts of information available to the decision unit (i.e., the buying center).

As the decision-making requirements become more com-plex--perhaps as a result of greater environmental uncertainty--empirical evidence (Duncan, 1972; Lawrence and Lorsch, 1967) would suggest that a less bureaucrat-ized structure would improve the information gathering and processing capabilities of the decision unit. For instance, a lower level of centralization would promote decision-making at the point of information gathering rather than restricting the flow of information to a more rigidly defined communication path. Further, the content of purchasing-related communication would consist of greater information passage and less instructions.

Similarly, a less rigid division of labor enables the decision unit to remain flexible enough to allow for a constant redefinition of tasks which may be necessitated by the demands of a highly complex, non-routine decision-making situation. Through increased lateral communication and a more flexible design, the buying center members can more quickly and more easily, respond to changing demands and contingencies. Furthermore, flexible rules and procedures enhance effectual processing of novel and non-routine information by permitting greater individual discretion. Such structural adaptation can lead to innovative behavior on the part of the buying center members and, thus, allow them to adapt to contingencies and information requirements which may not have been foreseen when the rules and procedures were initially developed.

The last structural dimension concerns the degree of participation in decision-making. Greater participation is an outgrowth of the adaptation associated with the previous structural dimensions. It logically should follow that as the buying center members are faced with more difficult decisions greater dependency should be placed on informal, lateral channels of communication. This increased participation in decision-making should improve the decision-making potential of the buying center members by enlarging the information base available to them as well as by providing opportunities for more sources of information feedback (Argyris, 1973).

From the dimensions of structure outlined above one can then position a buying center along a bureaucratic/non-bureaucratic continuum. A particular buying center profile would presumably connote a particular communication network, concentration of authority, workflow and so on among the buying center members. These, and other, organizational factors have been shown to impact upon aspects of the buying process (Gr°nhaug, 1976; Webster and Wind, 1972). While superior to Webster and Wind's descriptive, functional role approach, a possible flaw in these structural measures, as presently operationalized, is that these constructs may not accurately reflect the informal interactions among the buying center members. For example, it is possible to infer that a less bureaucratized, more flexible buying center profile represents a more democratic, participative decision-making atmosphere with a high degree of shared purchasing responsibilities and a de-emphasis on impersonal behavior. Yet, such organizational level analyses do not readily permit the researcher to examine the precise nature of the various sociometric linkages which emerge during the procurement process.

It should also be mentioned that the aggregation procedure itself tends to mask any individual level behavior since the buying center profile reflects an average of the individual responses. Moreover, recent findings suggest that there is a relatively low degree of consensus among the various buying center members with respect to their perceptions of the buying center structure (Spekman, 1977b). Despite the inflated error variance associated with each buying center score resulting from the above instability (Cook and Campbell, 1976), the macro-sociological approach does furnish insights pertinent to the decision-making potential of the buying center members. Specifically, it has been shown that the various structural dimensions have important implications for the decision unit's ability to gather and process information. Nonetheless, what may be more relevant to the researcher is a methodology which focuses on an aggregated, or collective, level of analysis and, as importantly, also facilitates the examination of the individual as he interacts as a member of the particular collectivity under examination.

STRUCTURAL ROLE ANALYSIS

Role theory provides a conceptual framework for linking an individual to a collectivity and, as Hickson (1966) suggests, it is a useful vehicle for bridging the organizational and individual level of analysis. Hall (1976) states that role theory is a helpful device for understanding the interplay among persons, interpersonal and organizational factors as they impinge upon the behavior of organizational members. Structural role analysis, a subset of role theory, concerns itself primarily with the structure of role relationship. In comparison to the macro-sociological approach, structural role analysis is a more micro-level orientation in that it calls for an intensive analysis of the individual decision unit or organization.

Elements of Role Structure

Basic to the concept of role structure is that any collectivity is linked by various tasks which must be accomplished. The particular workflow which emerges establishes specific relationships among the members of the collectivity. In the context of the buying center, for instance, there are generalized decision stages--ranging from identification of a buying need to performance feedback and evaluation--which must be performed during the procurement process. While the exact nature and sequence of the decision states (i.e., BUY-PHASES) may vary depending upon the type of purchase (i.e., straight rebuy, modified rebuy or novel purchase) there is usually a clearly established workflow which can be discerned.

A second element, the concept of positions, links a particular person to a task element. If, for example, one of the decision stages in the procurement process is the setting of specifications, we may find that the individual performing this task is called a design engineer--regardless of who the individual is, the job is always done by a design engineer. The notion of positions is quite consistent with the impersonal, Weberian notion of organization. In this manner, the set of linkages illustrated by the various positions within the buying center serves to 1) establish the formal relationships among buying center members and 2) represent the functional role (i.e., design engineer, buyer, etc.) assigned to a particular task. Simply, the concept of position defines one's position on an organizational chart and specifies the nature of one's formal interactions with other members of the organization or organizational subunit (in this case, the buying center).

Since the formal structure does not, in many cases, depict all the interactions within an organization, a third set of relationships emerges. The third set of elements concerns persons who are individuals initially interrelated by their assignment to a particular position and who, over time, can develop informal relationships which need not be specified by the formal hierarchy of the organization. It can be seen that this set of persons serves to complete the communications network (Oeser and Harary, 1962 and 1964) not fully accounted for by the more formal delineation of positions or tasks.

Digraphs, roughly defined as patterns of relationships among pairs of abstract elements (Harary, Norman and Cartwright, 1965), are used to illustrate and describe how any set of tasks, positions, and persons are conceived to be logically interrelated. While Figure 1 maps out a completed structural role system, it is possible to isolate a series of graphs where a P-graph depicts the formal relationships among buying center members, a T-graph outlines the sequence of purchasing related tasks, and an H-graph delineates the informal relationships among the buying center members. From Figure 1 one can discern 1) a sequence of buying activity (beginning with t₁ and ending with t₃); 2) a superior-subordinate relationship between a buyer (p₂) and a purchasing manager (p₁); and 3) an informal relationship between individuals acting as a buyer (h₁) and a design engineer (h₂) both of whom share the task of setting a particular product's specification (t₂). While no doubt a simplified structural role relationship, one can easily envision quite an elaborate set of digraphs encompassing many individuals, occupying several organizational positions, and engaging in a detailed sequence of procurement activities.

FIGURE 1

A SIMPLIFIED DIGRAPH DEPICTING A STRUCTURAL ROLE SYSTEM IN A BUYING CENTER

From a highly schematic form of digraph one is able to more deeply delve into the interpersonal dynamics of the buying center. Not only can one more easily discern the sequence of purchasing related events and the various positions sharing these activities, a researcher is able to trace informal power relationships and other sociometric linkages which cannot be examined directly from a more macro-perspective. A structural role approach offers a basis for aggregating across organizations while still preserving an individual, micro-level perspective.

It should be noted that the use of structural role analysis in an organizational buying context is presently not well developed (Calder, 1976) and, therefore, it is not our intention to propose it as a panacea for existing methodological weaknesses. Rather, our purpose has been to portray structural role analysis as a useful conceptual framework for capturing the micro-level relationships which lie at the core of the buying center construct. Utilizing a structural role perspective, we have, in fact, just finished collecting data pertinent to the decision-making properties of organizational buying centers. Yet, we sought to capture the actual micro-level relationships among buying center members through a multidimensional scaling technique. The point to be made is that structural role analysis is not a method in and of itself; it merely provides a guide by which to conduct collective level analyses.

CONCLUSIONS AND IMPLICATIONS

The issue of whether the individual or the collectivity is the proper level of analysis for conducting inquiry into organizational buying behavior is one with which future researchers must come to grips. While it is quite acceptable to empirically deal at both levels, it is felt that for much of the information germane to the Joint decision-making properties of the collectivity responsible for purchasing related decisions (i.e., the buying center) the aggregated level of analysis is appropriate. For the present, the major stumbling block appears to be the lack of a suitable methodology.

The objective of this paper has been to stress the need for narrowing the gap between the conceptualization of organizational buying as a joint decision-making process and the method by which a researcher can empirically investigate that process. While still in the exploratory stages both the macro-sociological approach and the structural role approach appear to be viable methods for capturing aspects of the Joint decision-making behavior of the buying center members. Moreover, both approaches permit the researcher to examine relationships among variables both endogenous and exogenous to the system thereby surmounting many of the pitfalls of investigating the individual members of the buying center as isolated entities.

The macro-sociological approach, however, primarily allows the researcher to infer particular interpersonal relationships from the structural configuration of the collectivity under scrutiny while the structural role approach can result in a more revealing picture of the interpersonal dynamics of the buying process. That is, much more verbal information can be gleaned from a graphic representation of the various structural role elements than is available from a macro-sociological investigation. It may be possible, for example, to infer from a rather flexible structural configuration that a purchasing agent is involved in several stages of the purchasing decision as a result of the more participative style of decision-making. Yet, a structural role analysis of the same buying center may disclose that this same purchasing agent influences particular decision stages (perhaps, the setting of specifications) through his informal, social relationships with a particular design engineer. Since competitive suppliers may only meet with the purchasing agent such information has important implications for the future conduct of their marketing efforts. Clearly, one can envision the strategy implications which can be distilled from a thorough analysis of organizational buying behavior from the collective level of analysis. We have presented two feasible directions for empirically examining aspects of organizational buying behavior from the collective level of analysis.

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