Procurement strategy role in the performance of public limited and private limited companies

Haim Hilman Abdullah and Zainal Abidin Mohamed

American Journal of Finance and Accounting, 2009, vol. 1, issue 4, 363-375

Abstract: The paper presents a study relating to the strategic decision of make or buy, type of companies incorporated and organisational performance. A study was conducted on manufacturing companies in Malaysia. Convenience sampling was done and 314 companies responded in this study. The findings indicate that there were no significant differences between the performance of companies that 'make' or 'buy'. But when the two groups were further scrutinised, based on the type of company incorporated, the results indicated the companies incorporated as 'public limited company' perform better than the 'private limited company'. However, the combination of type of company incorporated (public limited company – big company, and private limited company – medium size company) with procurement strategy does effects organisational performance. This study found, private limited companies that opted for make strategy perform better than other type of combinations. This means, the type of companies incorporated is an important indicator in determining the most appropriate procurement strategy, which positively related to performance, and could enhance competitiveness of a company in facing today's hyper competitive environments. The findings may add another dimension for consideration in the strategic decision choice process.

Keywords: procurement strategy; make-or-buy strategy; corporation types; organisational performance; private limited companies; public limited companies; manufacturing firms; Malaysia. (search for similar items in EconPapers)
Date: 2009
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