Procurement and Supply Management SCM 371Dr. PrahinskiExam I – Material OutlineFormat of EXAM:The exam will be composed of:multiple choice (approximately 60%-70% of exam grade), each worth 2 pts.short answers (remainder of exam grade), which includes several essay questionsThe answersshould be about one paragraph in length or may include a diagram of a framework; you can usebullet form.The exam could include material covered in the classroom discussion, assigned reading, Power Pointslides/note pages, our guest speaker, and the American Apparel video.The emphasis will be on materialcovered during our classroom discussions.When an article is referred to on the exam, it will be referred to as author(s) (year of publication,abbreviated Journal name), “Title of Article.”My former students say, “Know the articles.”Purchasing is PowerPurchasing: the action of acquiring materials and services. A functional group whose activities includeacquiring inputs to enable the organization to deliver maximum value. The terms purchasing,procurement and sourcing can be used interchangeably.Power: the ability to control the environment around them, including other people’s behavior. Manytimes individuals think of power in a negative sense. Power typically revolves around command andcontrol.Five types of power1.Coercive Power- uses the ability to punish – financially, physically, or mentally. It is a directeffort to exert control.2.Reward Power- one party offers another party something of value, such as a purchasingcontract. It is a direct effort to exert control. Has been shown to work with repetitive simpletasks, takes longer.3.Expert Power- a person who has accumulated vast knowledge, often with credentials, and usesthat knowledge to influence others. Relies more on persuasion as compared with reward power.Includes informational power. It is an indirect form of power in that the recipient can select theirresponse without fear of repercussion (coercive) or reward.4.Legitimate Power- is based on the position that an individual holds. It is indirect, althoughcoercive power can be an inherent underlying factor. Managers today reflect that the legitimatepower within many organizations has broken down; we no longer respect a person simplybecause of their business title. They must earn our respect and their power through other means.5.Referent Power- the power that an individual has because you admire the charisma and qualitiesof that person.Since you admire them, they have power over you. Referent power is indirect.The individual doesn’t tell you directly what to do; it is suggested through friendship, joy andrespect.
The five steps in organizational purchasing process:1.Identify user needDescribe need with accurate statement of characteristics, quantity, commodity or service.