Integrating global and local procurement for superior supplier working relations Sengun Yeniyurt a, *, John W. Henke Jr. b , Erin Cavusgil c a School of Business, Rutgers University, Piscataway, NJ 08854, USA b School of Business Administration, Oakland University, Rochester, MI 49309, USA c School of Management, University of Michigan – Flint, Flint, MI 48502, USA 1. Introduction While globalization is a trend present in many industries, its effect on company structure and strategies, as well as the tactics that are optimal in such an environment remain to be identified. Globalization is creating increasingly competitive markets, which in turn create the need for reduced lead times in innovation and production, both of which require global companies to manage their resources more proactively on a global basis (Kotabe & Mudambi, 2009). Today, increasingly competent local firms and fierce global competitors are challenging global companies to be globally competitive while maintaining an optimal level of responsiveness through the adaptation of the strategy to local market conditions (Townsend, Yeniyurt, Deligonul, & Cavusgil, 2004; Zou & Cavusgil, 2002). A successful global marketing strategy requires companies to configure their value chain activities optimally to exploit location specific advantages and coordinate these activities across national borders to achieve global efficiency (Zou & Cavusgil, 2002). In this way, global companies can to produce high quality products using components that are procured at the lowest total cost possible. Because of this, effective management of the sourcing (also referred to as procurement) function on a global and local basis is crucial to the success and long term viability of a global company. By exploiting the comparative and competitive advantages that can be realized by integrating various value-added activities from globally disparate locations, multinational companies are moving toward increased globalization (Kogut, International Business Review 22 (2013) 351–362 A R T I C L E I N F O Article history: Received 15 February 2011 Received in revised form 25 March 2012 Accepted 19 June 2012 Keywords: Global companies Global sourcing Local sourcing Procurement Supplier relationship management A B S T R A C T Globalization is forcing global organizations to focus on processes that will enable them to more effectively and efficiently integrate and coordinate their activities throughout their worldwide organization. As such, global sourcing is becoming a standard practice in many global organizations. Using a dataset of 1455 observations from the suppliers of a North American-based global manufacturer of high technology products, this research evaluates how a global company can utilize a globally integrated procurement organization to achieve global and local sourcing responsiveness and superior supplier working relations. The study found that if a global procurement organization aspires to achieve exceptional supplier working relations, it should be highly integrated across its geographic regions with knowledgeable global and local procurement personnel who effectively commu- nicate with the firm’s suppliers, while working closely together in a coordinated manner to achieve a globally responsive supply chain. ß 2012 Elsevier Ltd. All rights reserved. * Corresponding author at: Department of SCM and Marketing Sciences, School of Business, Rutgers University, The Janice Levin Building, Room 230, 94 Rockafeller Road, Piscataway, NJ 08854, USA. Tel.: +1 732 445 4171; fax: +1 732 445 5946. E-mail address: yeniyurt@business.rutgers.edu (S. Yeniyurt). Contents lists available at SciVerse ScienceDirect International Business Review jo ur n al ho mep ag e: www .elsevier .c om /lo cate/ib u s rev 0969-5931/$ – see front matter ß 2012 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.ibusrev.2012.06.004