Purchasing practices in SMEs:A comparative study of Danish and American firms

The purpose of this paper is to develop a knowledge and understanding of purchasing practices of SMEs in Denmark.The paper is based on the results from a survey among 94 Danish SMEs, mainly within machinery, electronics and electrical, transportation equipment, and medical equipment industries. The results are compared with a similar study encompassing 224 SMEs in Indiana, USA. First, the level of purchasing complexity is discussed. There are similarities between the two surveys in terms of purchasing's influence on product quality and productivity, and percentage of total costs. However, the degree of technical complexity is rated higher among the Danish respondents, and market uncertainty is rated higher among the Indiana respondents. Then, we look at a number of characteristics of the purchasing function, including skills and education level of the purchasing personnel, inter-functional coordination, and the type of supplier relationships. Finally, the formal position of purchasing in the organization is presented. Here the findings confirm the conventional wisdom that most purchasing employees are without a formal, higher education, and that most of the time is spent on routine transactions. Based on the results from the two surveys, we discuss the managerial and research implications for purchasing practices in SMEs.