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Notes for Procurement

In: Business and Management

Submitted By mumeran
Words 1923
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Business process notes.

Structure options for large organizations * Centralized: Authority and responsibility for mot supply related functions are assigned to a centralized power.
Advantages and disadvantages of centralization
Advantages would be: * Greater buying specialization * Ability to pay for talent * Consolidation of requirements – clout * Coordination of policies and procedures * Effective planning and research * Common suppliers * Proximity to major organizational decision makers * Critical mass * Firm brand recognition and stature * Reporting line – power * Strategic focus * Cost of purchasing low
Disadvantages would be: * Narrow specification and job boredom * Lack of job flexibility * Corporate staff appears excessive * Tendency to minimize legitimate differences in requirements * Lack of recognition of unique needs * Focus on corporate requirements, not on business unit strategic requirements * Distance from users * Tendency to create organizational silos * Customer segments require adaptability to unique situations * Top management not able to spend time on suppliers * Lack of business unit focus * High visibility of purchasing costs
Potential advantages and disadvantages of decentralization
Advantages would be: * Easier coordination communication with operating department * Speed of response * Effective use of local reserves
Disadvantages would be: * Easier to hide costs * Democracy in the workplace * Hard to develop brand loyalty and keep control over all departments * Hierarchy would be in place

1. Define responsibilities 2. Policies and procedures 3. Common processes 4. Coordination
The above four are the requirements of running a hybrid firm.

One of the common ways of a hybrid organization...

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