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Buyer Supplier Relationships - Essay Example

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Introduction: When companies buy material or any other things needed for their organisation, the procedure followed and the way it was executed reflects the organisational culture. Generally the companies follow two methods. First one is detailed drafting of contract, so that the supplier cannot easily cheat the company, and if any cheating happens the buyer will able to sue the supplier in the court…
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Buyer Supplier Relationships
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Buyer Supplier Relationships

Download file to see previous pages... The organisational culture can be defined as the manner in which different managers and heads of the departments of the organisation behave and act. Their actions and decisions will show effect on the outcome. The above mentioned choices were termed as strategic choices and choosing them depends on the company's necessities. The organisational culture decides the way of execution of the strategy. In case of detailed contract drafting detailed roles and responsibilities that are to be performed, the results to be delivered, the way the operations to get out comes to be planned and the ways that are to be followed will be mentioned explicitly. This type of drafting will develop interfirm communication and decides the behaviour of the deal.
In case of close partner selection, the team work will play the main role. The priority was given to the close partner in buying any thing required for the company. The difference is that the contract is replaced by team work to execute the deal. This type of team work delivers relational governance with the help of relational norms. They follow principles of right action to continue the relationship.
As mentioned earlier organisational culture is the values the heads of various department...
This is because they are the parts of the patterns of the management. Another conception is that the organisational culture is the key driving force in all the actions of and in the company. In 1979 Mintzberg along with some other experts expressed the above opinion. The second one is more popular because the first one is useful only in emergency strategies that depend on default management. But in the case of second one the method has the effect of sensitizing the managers in the processes that the culture of the organisation effects the decision making. This can decide even the choice between the detailed contract drafting and close partner selection. After choosing between these two the culture shows its effect even on the executing the contract or in the delivering the team work. We take the view that the organisational culture will show its effect on the strategic decisions and based on that the detailed contract drafting and the close partner selection can be studied. There is a need to investigate the three elements which are as follows:
Avoiding the uncertainty, collectivism and distance of the power.
In this paper the evaluation of the methods of buyer supplier relationship was done on the basis of the discussing and analysing the methods found in the literature. While discussing the relationships, two choices were taken into consideration; detailed contract drafting and close partner selection. Each method will have its own implications depending on the necessities and the organisational culture of the firm. The organisational culture within same organisation that differs in the branches of different countries was also considered and the way it effects the relationship was discussed. After that the avoiding the opportunism, developing ...Download file to see next pagesRead More
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