Home > Knowledge > Topics and Skills > Strategy and Policy > Centralised/Decentralised Procurement

Centralised/Decentralised Procurement

It makes sense to think of purchasing authority on a continuum, with complete centralisation at one end and complete decentralisation at the other (Monczka et al., 2009)

Information about Centralised/Decentralised Procurement

When the firm operates a centralised structure/model, a procurement officer at corporate headquarters has the authority for the vast majority of the firm’s procurement spend. In contrast, when procurement authority for the majority of expenditures rests at the divisional unit, business unit, or plant/site level, then the organisation operates a decentralised struc-ture/model. As such, (de)centralisation is less about structure and more about power and authority (Croom, 2000; Monczka et al., 2009; Potoski, 2008; Vagstad, 2000).

Return to SRM and SC Management topic.

Return to Strategy and Policy topic.

Related concepts

Engaging with the Third Sector

Third sector social enterprise has a long history, from the co-operative movement of the 1800s to the long trading activities of many charities, of which The Chartered Institute of...

Find out more

Global vs Local Sourcing

There appears to be an almost unstoppable march towards more and more global sourcing. If we perceive that everyone else is going global, shouldn’t we?

Find out more

Globalisation

The world did not proclaim the dawn of globalisation the moment McDonald’s opened its doors in Beijing, or when Vietnamese factories reeled off their first Nike trainers. The term...

Find out more