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Risk Management within purchasing: The effect of increased uncertainty on purchasing strategy A case study on Swedish SMEs during the Russian crisis of 2015
Jönköping University, Jönköping International Business School, JIBS, Centre of Logistics and Supply Chain Management.
Jönköping University, Jönköping International Business School, JIBS, Centre of Logistics and Supply Chain Management.
2015 (English)Independent thesis Advanced level (degree of Master (One Year)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

In the last few decades more and more companies started to purchase internationally. Due to the liberalization of countries borders, better communication technology and better infrastructure even small and medium size enterprises (SMEs) engaged into international trade. This allowed them to combine core competency with the ones from suppliers and by that to achieve better market competitiveness. In the same time this widening of network is exposing the small and medium size enterprises to greater risk.

The purpose of this study is to explore what purchasing risk management strategies small and medium size enterprises apply in order to reduce exposure to environmental risk, and analyze the reasoning behind their choice. The research is done in the context of increased uncertainty for Swedish companies buying from Russia.

For this study, abductive research approach has been applied and a qualitative study has been carried out using a multiple case study research strategy. Empirical data has been collected by conducting semi-structured interviews with four Swedish SMEs that import from Russia. The findings have been analyzed using the existing theory elaborated in the frame of references.

The main findings from the analysis are that Swedish SMEs use strategies like Safety stock, Single sourcing and Multiple sourcing in order to protect themselves in purchasing. Furthermore the analysis show that none of these strategies is used in a manner to protect from external environmental risks, and that SME`s managers do not take these risks in consideration when constructing purchasing strategies. By using the scenario of increased uncertainty because of the Russian political situation the analysis concluded that managers change their attitude toward environmental risk in purchasing drastically if the companies are exposed to the same type of risk. After realization of the environmental risk the companies are exposed to, all of the case companies employed multiple sourcing in order to hedge against this risk.

Place, publisher, year, edition, pages
2015. , 56 p.
National Category
Economics and Business
Identifiers
URN: urn:nbn:se:hj:diva-27617ISRN: JU-IHH-FÖA-2-20150149OAI: oai:DiVA.org:hj-27617DiVA: diva2:842691
Subject / course
IHH, Business Administration
Supervisors
Examiners
Available from: 2015-07-31 Created: 2015-07-21 Last updated: 2015-07-31Bibliographically approved

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf