Lisa Ellram
Miami University, Oxford

Abstract:
Organizations’ expectations for cost reductions influence new and existing products and services. The costs for new product and service introductions are managed differently than ongoing cost reductions. Purchasing plays an important role with different goals in each. This seminar will emphasize how the case study methodology was applied to understand the conflict purchasing faces when tasked to manage both new product costs and ongoing cost reductions. Because there is goal incongruence, purchasing may act in its own best interest, rather than in the best interest of the organization or team. This is both a contracting and information uncertainty problem, creating an opening for passive opportunism by purchasing. Thus, Agency Theory and Information Processing Theory (IPT) are combined to examine how information uncertainty can be reduced and contractual goal alignment improved in these situations. The outcome of this research is to expose potential goal misalignment between new product development costs and ongoing cost savings, and suggest theoretically grounded methods for reducing the potential conflict.

Lisa M. Ellram, Ph.D., C.P.M., CMA, is a the Rees Distinguished Professor of Supply Chain Management at the Farmer School of Business, Miami University, Oxford, OH. Her primary areas of research interest include sustainability; buyer-supplier relationships; services purchasing and supply chain management; offshoring and outsourcing; and supply chain cost management. She has published in numerous top journals spanning a variety of disciplines, and has presented her work in more than 25 countries.

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Venue
Department of Management, Economics and Industrial Engineering
Building B26/B – Room 0.2 – ground floor
Via Lambruschini 4/B, Milano