Chasing the Tail : Why does it exist when it should not?

Abstract: Purchasing has gone from an administrative task to a strategic activity. As such, firms adopt purchasing as a corporate function to set up rules and processes in order to standardize how purchasing is to be carried out by business units. This has the benefit of consolidating spend towards a fewer number of suppliers to be used throughout the entire organization and achieve great cost savings on a corporate level. Not complying to these rules and processes, however, will offset the benefits associated with strategic purchasing. A consequence of non-compliance is a large supply base which should not be the case if established processes are followed. The purpose of this thesis is to investigate the procurement process of a Swedish multinational organization in a case study setting, which applies strategic purchasing whilst reporting a large supply base. Hence, the authors aim to identify the main challenge in the procurement process. Additionally, this thesis seeks to find an explanation to the challenge by identifying the underlying contributing factors. The main challenge was discovered to be Maverick Buying, a phenomenon limited in research. Maverick Buying is the off-contract purchasing of goods and services and therefore bypass established processes, rules, and selected suppliers. At the case company four forms of Maverick Buying was found where the underlying factors contributing to them were communication, structures, purchasing tools, involvement, control mechanisms, and lack of understanding the procurement process. This thesis contributes to a greater understanding of the phenomenon and what causes its existence.