Firms should seek to “get their own house in order” before seeking to manage suppliers

1788 words 8 pages
Assignment Title: Firms should seek to “get their own house in order” before seeking to manage suppliers
Purchasing is a vital process of the company, 100% efficiency is required at all times. There must be proper organization and flexibility in this department. People working in this department should constantly evaluate the current purchasing scheme of the company and adapt to changes at all times. Purchasing department or team of a company basically seek to answer these two questions: what we buy and how we buy. The answers to these two questions can change depending to companies size and sector. Indeed, by answering these two questions is the main goal of procurement team or department is to create best value for money and to
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To cope with organizational fragmentation it’s important to understand why fragmentation arise in organization what are conflicts between branches or parts. Fragmentation arises in an organization because of several reasons. First, each department of an organization performs different functions, it follows that these departments have different needs. For instance, engineering department of a company would definitely use different computer from the HR department. These two departments have two different functions through both departments require computers for efficiency but both use special applications, features and specifications of computers to perform well. Legacy method is an old system that firms continue to practice these days. This is the second reason why fragmentation arises in organization. Maybe the system works satisfactory so organization sees no reason in changing it. The cost for changing and redesigning system could be costly both time and money compared to the anticipated appreciable benefits of replacing it to a new one. And lastly, difficulties in consolidating efforts in the organization. Human as we are, we have different opinions and our way of thinking is always different to one another. There are organizational factors that make consolidation efforts difficult. Conflicting preferences within organization arise due to limited rationality. Bounded rationality can also


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