Ulli Arnold 
and
Benedikt Schmidt

ABSTRACT

The concept of sustainability and its effects on business economics has become one
of the most discussed issues for economic scientists as well as practicioners within
the last decade.

For enterprises, sustainability contains economical, ecological and social purposes
according to the Triple Bottom Line Paradigm. Consequently, the idea of
sustainability does not only contain shareholder interests – it is also the stakeholders
that have to be integrated. Thus, one would have to take into account the needs of all
stakeholders in the socio-economic environment of a firm. However, this leads to an
obvious conflict of interests and objectives. Scientists still disagree whether economy
and ecology are irreconcilable or – in contrast – achieve synergy effects.

Several studies about purchasing social responsibility (PSR) exist, which try to
transfer the concept of corporate social responsibilty (CSR) on the purchasing
function. They want to apply this concept in respect to the purchasing function and to
analyse the ways to operationalize it. Other studies analyse the different drivers and
barriers, which influence the institutionalization of sustainability and social
responsibility in purchasing management. Furthermore, many authors dedicated their
research to rather operative issues like “packaging”, “recycling”, “reuse”, “certification
management” or “supplier assessment”. Finally, a number of authors try to answer
the crucial question “does it pay to be green?”. This question refers to the bottom line
impact of PSR concepts and activities.

Under certain circumstances and in certain industries, sustainable activities lead to
win-win-situations. However, general conclusions cannot be drawn as purchasing
goods and situations widely vary. In the meantime, however, one can argue, that by
now it is necessary for all enterprises to consider the needs of the different
stakeholders, even if there is no direct measurable economic benefit.

Although we gain more and more knowledge in the matter, some questions still
remain unanswered. There is a lack of concepts and specific directives for an
integration of sustainability into the daily process of decision-making. In our view,
there is no need to abandon well-tried purchasing concepts. A principle claim for
closer supplier relationships justified in the name of sustainability is economically
unreasonable and counteracts the idea of strategic purchasing management. On the
contrary we want to put emphasize on the necessity of integrating the new targets
into already established concepts.

Our paper concentrates on this issue. The strategic purchasing process is our
starting point. First, we discuss its interfaces to management of sustainability.
Effective and efficient purchasing management necessitates a differentiated market
position and presence. For this reason, our main attention focuses on the relevance
of purchasing portfolio analysis in order to create a tool which is able to segment
input markets at least in respect to sustainability.

Kraljic´s ground-breaking approach as well as other propositions from the academic
discourse will be reflected and analyzed. On the basis of this elaboration we develop
a more advanced purchasing portfolio approach. This model breaks up the rigid
shareholder perspective commonly known. An integrated third dimension explicitly
takes into consideration the stakeholders´ needs, keeping in mind the initial idea of
efficiency and effectivity. Finally, the model is empirically tested with in-depth expert
interviews.

Our approach gives purchasing practicioners a clear directive of how to handle
ecological or social issues within their decision-making process.