An interrelation model of power and purchasing strategies: A study of vaccine purchase for developing countries Ala Pazirandeh n , Andreas Norrman Department of Industrial Management and Logistics, Lund University, SE-221 00 Lund, Sweden article info Article history: Received 14 January 2013 Received in revised form 15 November 2013 Accepted 19 November 2013 Available online 2 December 2013 Keywords: Humanitarian logistics Purchasing power Purchasing strategies Resource dependency theory Vaccine procurement abstract The purpose of this study is to further understand the relationship between purchasing strategies practiced by less-powerful buyers and their purchasing power. Drawn on the resource dependency theory, a two-way relationship was predicted where power is both a cause and an effect. The theoretical predictions were then explored in a multiple-case study in the context of vaccine procurement for developing countries. This context presents an asymmetric power situation, favoring suppliers, and changes some of the basic assumptions of theories used; i.e. nonprofit, public procurement, and end customer satisfaction. Cases were selected to represent different strategies towards similar power constraints. The results of the study indicated that purchasing strategies were set in response to individual constraints from sources of purchasing power, and not in response to the power positions as the cumulative effect of all sources of power. In practice, some of these purchasing strategies changed the level of sources of power, and some contributed to a changed buyer power position. Based on the findings, it is recommended that less-powerful buyers, like that of vaccines, practice purchasing strategies with the orientation towards an attempt to change the environment, such as encouraging new supply market entries. & 2013 Elsevier Ltd. All rights reserved. 1. Introduction Organizations engage in exchange relationships (e.g. with suppliers) to get needed resources and thus become dependent on each other (e.g. in the resource view of the firm, Wernerfelt, 1984). The interdependence is not always evenly distributed, and some partners in the supply chain have the upper hand or leverage. The weaker party thus faces specific constraints to manage through its strategies. In a situation where the buyer is highly dependent on its supplier base, purchasing strategies are carried out in response to the constraints faced. The idea that organizations are constrained and influenced by external factors from the environment they function in, is widely accepted in theory. Empirical support for such predictions is limited, however (e.g. Pfeffer and Salancik, 2003). Research on power in a social setting has been addressed in several disciplines (e.g. Lusch and Brown, 1982; Emerson, 1962). But the concept of power is not operationalized commonly among studies. Researchers suggest a need for more studies on power (e.g. van der Vaart and van Donk, 2008; Pfeffer and Salancik, 2003). Within purchasing research, the concept of power has been mainly studied with the aim of providing normative re- commendations to buyers to achieve competitive advantage (e.g. Gelderman et al., 2008; Cox et al., 2002; Kraljic, 1983). However, these studies also lack a unified and common operatio- nalization of purchasing power, and empirical support explaining the interrelation between purchasing strategies practiced and purchasing power. Finally, most of these theories and models have been developed within the boundaries of the commercial sector and are based on the presumption that organizations strive to maximize power, generate profit, and are constrained by private sector regulations. Buyer–supplier dependencies can also be found outside pure commercial contexts. One example, very important for global health, is vaccine purchasing for developing countries. The supply market for vaccines is highly concentrated, with a few multi- nationals controlling the majority of production. Developing countries buying vaccines have to either compete with industrial countries, or in the case of region-specific vaccines, face suppliers who often do not find their limited demand volume attractive. Interestingly, some strategies carried out by humanitarian organiza- tions have reshaped the supply market (Herlin and Pazirandeh, 2011). For example, WHO initiatives to increase local production within developing countries have increased the number of suppliers. In this study, it was sought to increase the understanding of the relationship between purchasing strategies carried out by low-power buyers (exemplified by vaccine supply chains for Contents lists available at ScienceDirect journal homepage: www.elsevier.com/locate/pursup Journal of Purchasing & Supply Management 1478-4092/$ - see front matter & 2013 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.pursup.2013.11.002 n Corresponding author. Tel. þ46 46 222 81 41. E-mail addresses: ala.pazirandeh@tlog.lth.se (A. Pazirandeh), andreas.norrman@tlog.lth.se (A. Norrman). Journal of Purchasing & Supply Management 20 (2014) 41–53