Power and influence in organizational purchasing decisions: A systems interaction perspective.

Abstract

This research addresses organizational buying center membership and members' relative influence on the purchasing decision. Present approaches are shown to be deficient in recognizing either the bases of power or the conditions that lead to an exercise of power. These deficiencies are used to explain the weak empirical results existing in the the literature which primarily consists of descriptive studies. In addition, the prevailing unit of analysis, the individual, is shown to be deficient. A conceptualization is proposed based on the following relationships:$$\eqalign{\rm Influence&= \rm Power\ X\ Stake\cr&\rm Where:\qquad\qquad\qquad\cr\rm Influence&= \rm a\ successful\ exercise\ of\ power\cr\rm Power&= \rm departmental\ influence\ potential\cr\rm Stake&= \rm impact\ of\ the\ decision\ on\ the\ department\cr}$$Thus, influence is viewed at the departmental level as a multiplicative function of latent power and stake, the latter being necessary to activate power. The conceptualization is based on prevailing theory and empirical results in the Organizational Behavior literature. Data was obtained from a comprehensive multiple single stage snowballing procedure within all departments of twenty-five medium sized organizations, and covered a wide range of industries and decision settings. Support was found for the conceptualization through operationalization as an interactive latent variable model utilizing partial least squares (PLS) for parameter estimation and jackknifing for inferential testing. These procedures maintain the advantages of currently popular maximum likelihood procedures while avoiding its stringent assumptions regarding sample size and normality.