Roles, capabilities and critical success factors of International Purchasing Offices in China

Purpose – Setting up International Purchasing Offices (IPOs) is a frequently adopted solution to managing international sourcing. This paper - part of an international research project jointly developed by European and Chinese scholars - aims at analyzing roles, capabilities and critical success factors of IPOs located in China. Design/methodology/approach –The adopted approach is ‘multiple case studies’. We analyzed a sample composed by fourteen Chinese IPOs belonging to multinational corporations headquartered in Germany, Italy, Sweden, the Netherlands, UK and USA. A total of thirty-four face-to-face interviews were carried out in China (and in UK). Respondents were also asked to complete a questionnaire, collecting data concerning the importance of roles, capabilities and success factors for their IPOs, currently and five years before, using a five-point Likert scale. Originality/value – This paper represents the first comprehensive empirical study on the roles, capabilities and critical success factors of International Purchasing Offices in China. First, starting from an analysis of the existing literature, it identifies and defines ten roles and fourteen capabilities / success factors. Second, it shows that on average the considered roles of the IPOs in China have significantly grown in recent years and these purchasing offices are more aware about required capabilities and success factors. Finally, it distinguishes three main IPO’s evolutionary paths: overall development (i.e. all roles have undergone significant changes), selective development (that occurs along one or a few directions) and standing configuration (little change in the importance of roles) and tries to identify some variables which can affect the IPO behaviours. Practical implications – The outcomes of this paper can help managers to better comprehend the IPO solution and to take aware decisions about their evolution (e.g. which activities to improve, which capabilities to develop) considering such factors as the architectural and technological complexity of the sourced items, the motivations for sourcing in China, the annual volumes sourced in China, and the past experience in the Chinese context.