7.1 Operationalization of the constructs of model 1
7.1.1 Operationalization of the purchase situation
To evaluate the purchase situation all three dimensions of the cube developed in chapter 2 have been assessed: buyer business impact, supplier market competitiveness and the relationship attractiveness. The dimensions buyer business impact and relationship
attraCtiveness are further detailed by various factors. The following figure gives an overview of the structure of the construct purchase situation.
Purchase situation
Fipre 7.1 Structure of the construct purchase situation
Starting with the first dimension, the buyer business impact: To reduce complexity the author has picked the most important criteria out of the selection of various characteristics detailed in chapter 2 for characterizing the buyer business impact. Therefore three factors have been built: purchase volume, supplier's competences and supplier's potential.
The factor purchase volume comprises two items. The selected items proof the typical characteristics of a commodity product. Although the supply is a cheap product, a high business impact is caused by this supply due to its high number of transactions. In the following table the corresponding questions of the questionnaire are displayed with the item- to-total correlations, the factor loadings, the explained variance and the Cronbach's Alpha.
Factor Item-to-total Factor
Purcbau volume correlation loading
This is a supply with an extremely high number of transactions. .51 .87
This supply has relatively low product value per unit. .51 .87
Cronbach ã s Alpha .68
Explained variance 75.66%
Table 7.1 Factor purchase volume
The second factor measuring the buyer business impact is describing the supplier's competence. The selected items evaluate the buyer's dependency on the supplier by questioning, if the supply can become a bottleneck for production.
128 7 Operationalization of the constructs
Factor Item-to-total Fac:tor
Supplier's competeac:e corretatioa load me
The supplier's reliability concerning product quality and punctuality of delivery is key for us. .71 .93 The supplier's service offering (payment scheme, next day delivery ell:.) is beneficial to us. .71 .93
Cronbach' s Alpha .83
Explained variance 85.72%
Table 7.2 Factor supplier's competence
The third factor of the buyer business impact dimension refers to the supplier's potential.
Factor Item-to-total Fac:tor
Supplier's poteatilll corretatioa loadiDc
The supplier's innovation competence is important to us. .58 .83
The supplier's business partner networlc is beneficial to us since it opens new .54 .79 opportunities for our company.
This supplier has a large development potential concerning production processes
.57 .81
and SUIIPOrtinR lli"OCCSSCS.
Cronbach's Alpha .74
Explained variance 65.59%
Table 7.3 Factor supplier's potential
The assessments of the three factors of the dimension buyer business impact passed the reliability and validity checks without exception. For further analysis the indicators of the three factors have been aggregated by calculating the arithmetic average to find out how suitable these three factors are to measure the dimension buyer business impact. The results of the reliability and validity measurements are displayed in the following table.
Dlmensioa Item-to-total Factor
Bayer business impact correlatioa loadiug
Factor purchase volume .32 .65
Factor supplier's potential .49 .82
Factor supplier's competence .42 .78
Cronbach's Alpha .61
Explained variance 56.23%
Table 7.4 Dimension buyer business impact
The first dimension of the purchase situation cube has passed all quality checks with respect to reliability and validity.
The second dimension of the purchase situation, the supplier market competitiveness, is operationalized as documented in table 7.5. The dimension describes the high need of relationship support for the buyer at markets with low or no supplier market competitiveness.
In a monopoly, the buyer is really dependent on the relationship to the supplier to get optimum conditions. To characterize this dependency one item has been inverted.
Dimension Item-to-total Factor
Supplier market competitiveness correlation load inc
We cannot easily replace this supplier. .44 .85
The market can be characterized by high competition between many suppliers. .44 .85 (This item has been inverted.)
Cronbach 's Alpha .62
Explained variance 72.18%
Table 7.5 Dimension supplier market competitiveness39
The third dimension evaluates the relationship attractiveness of the procurement environment.
Therefore two factors have been examined: the buyer's trust in the supplier and the existing commitment to the supplier.
The factor trust covers two facets used in relationship marketing research, motivational or intentional trust aspects (Morgan & Hunt 1994, Wilson 1995, Helfert & Gemi.inden 1998) and the satisfaction aspects, which enforce the development of trust (Walter eta!. 2000).
39 Items with the notice (This item has been inverted.) are formulated opposite to the original question, therefore their values have been calculated by applying the formula '8-x' (x= original rating on a 7-point Likert scale).
130 7 Opcrationalization of the constructs
Factor Item-to-total Factor
Trust correlalioa loadiD11
When we have an important requirement, we can depend on the supplier's
SUJl1)0n. .55 .74
We can count on the supplier's promises made to our firm. .61 .79
Overall we are very satisfied with this supplier. .62 .79
Compared with our expectations, we are not satisfied with this supplier. (This .67 .83 item has been invened.)
Cronbach' s Alpha .80
Explained variance 62.18%
Table 7.6 Factor trust<O
With the commitment factor also two facets are evaluated. On the one hand the affective and instrumental commitment is measured as defined by Walter et al. (2000), which is describing the positive attitude towards the future existence of the relationship and some form of investment in the relationship. However, in the context of this study the management aspect is also included in the commitment factor. This facet measures, if the buyer is showing special commitment to the relationship to the supplier by investing in personnel, who is supporting and managing a smooth supplier relationship and assuring continuous supply without any bottleneck for production.
<O Items with the notice (This item has been invened.) are formulated opposite to the original question, therefore their values have been calculated by applying the formula '8-x' (x= original rating on a 7-point Liken scale).
Factor Item-to-total Factor
Commitment correlation loadia&
We focus on long-!eml goals in this relationship. .67 .83
We are willing 10 invest time and other resources into the relationship with this
.57 .77
supplier.
Our procurement employees are in close contact with corresponding employees
.67 .84
of this supplier.
We have an intermediator who manages a stable and successful relationship .37 .51 with this supplier.
The supplier has an intermediator who manages a stable and successful relationship with us. .64 .78
Cronbach's Alpha .80
Explained variance 57.00%
Table 7. 7 Factor commitment
Based on the two factors of relationship attractiveness, arithmetic averages have been calculated for each factor. The positive results with respect to reliability and validity analysis are documented in the following table.
Dimension Item-to-total Factor
Relationship attractiveness correlation loadin&
Factor commitment .44 .85
Factor trust .44 .85
Cronbach 's Alpha .62
Explained variance 72.20%
Table 7.8 Dimension relationship attractiveness
For the purpose of future calculations the arithmetic averages of the factors of each of the three dimensions of the purchase situation have been calculated and are analyzed with respect to their measurement quality. The results are shown in below table.
132 7 Operationalization of the consavcts
Construct Item-to-total Factor
Purcbase situatioa correlatioa loadin&
Dimension buyer business impact .66 .89
Dimension supplier market competitiveness .43 .74
Dimension relationship attractiveness .36 .70
Cronbach ãs Alpha .67
Explained variance 60.74%
Table 7.9 Consavct purchase situation
Overall the proposed measures of the purchase situation meet the defined criteria with respect to reliability and validity.