Purchasing office in China : Selecting a purchasing structure and managing the purchasing office

Abstract: What is it like managing a purchasing office in China today? What are the purchasing structures to be considered? These are two fundamentals which this thesis aims to find out. What can be done to ease the process and avoid problems before they are actual problems are matters that will be discussed. The thesis is delimitated to the Chinese market and the effects and implications by working there. Further the research in the thesis is delimitated towards companies that are involved in trade and that have purchasing offices in China. A case study will guide the reader into the ways of doing purchasing in China. By going over several incidents that may occur when working in China the reader will through a case study form an opinion on what the situation may be like for many foreign purchasing offices existing in China today. Views from both Chinese and expatriated foreign staff will be given in the case. The case study will be focused on the implications occurring during an actual purchasing process. The data in this thesis comes from interviews at one of the major clothing chains in northern Europe and from selected articles relating to the industry. When analyzing the data provided by the selected company a hermeneutic perspective has been used. A deductive method has been used to derive empirical data that has been published in some form. The major conclusions is that a company need to come prepared, setting up an office takes time and routines that work at home doesn’t necessarily work in other unfamiliar locations. The structures necessary for the purchasing office may depend on factors such as size of the company and cultural values. Ways of improving the purchasing process may be to rely more on IT systems. Purchasing offices should have a certain degree of autonomy when doing purchasing in China. Having employees seeing the whole picture of the company may be important due to the head office often being far away. Reengineering jobs to become more multi dimensional, thus providing a greater understanding of the purchasing process for employees is one solution. Cultural issues are to reckon with and there are certain issues that must be resolved either by integrating different ideas or adaptation by locals and expatriated employees. As can be seen in the case of “Workplace Shanghai” there may be difficulties but they can be overcome as will be further assessed in this thesis.