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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).

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