Within Organization Comparison of Sales and Purchasing Staff Results

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Comparisons of the responses given by sales and purchasing staff were made about their experience and understanding, the nature of the inter-organizational information system (IOIS), satisfaction with the IOIS, and perceptions about the relationship and the nature of the business environment. There were many significant differences across each category for many variables in that category.

Experience and Understanding

The t-tests were undertaken to compare purchasing and sales staff experience and understanding of the customer/supplier (Table 1). Overall, while both sales and purchasing staff had similar number of years experience working in the industry, purchasing staff had more experience working for the current organization, and the organization had been in a relationship longer with the customers for longer than with the suppliers. Both groups of staff had a similar rating of their understanding of the other organization being discussed.

Table 1: Sales and purchasing staff comparison of experience and understanding

	Sales	Purchasing		Difference
	Mean	Std Dev	Mean	Std Dev	in Means	Sig
Experience in organization (years)	9.9	8.2	12.9	10.2	-3.0	a
Experience in industry (years)	18.5	9.3	19.0	10.2	-0.5	c
Organizational experience in relationship (years)	23.6	13.5	18.9	20.0	4.7	a
Understanding of other organization*	6.2	0.9	6.1	0.8	0.1	c
Understanding of industry*	6.0	0.8	5.8	0.8	0.2	b
Significance: a = 99% confidence; b = 95% confidence; and c = no significant difference.
Scale of 1 to 7, with 1 being little understanding and 7 being very good understanding.

Inter-Organizational Information System

There were significant differences in the perceptions of sales and purchasing staff about most aspects of the IOIS for most information types (Table 2).

Table 2: Inter-organizational information system differences

Type of Information Exchanged	Info Type	Frequency	Adequacy	Direction	Formality	Informality	Media Richness
Problem resolution	c	a	c	c	b	b	c
On-time delivery	a	a	a	a	b	c	a
Product quality	b	a	b	c	a	b	c
Invoice accuracy	b	A	a	a	c	c	c
Forecast supply and demand	b	A	a	c	a	c	a
Complete orders	c	C	a	a	c	c	a
Flexibility to accept order changes	c	A	c	a	c	c	a
New product development	c	A	a	a	c	a	a
Opportunities and threats	c	A	a	c	c	c	a
Price negotiation	c	A	a	c	c	a	c
Significance: a = 99% confidence; b = 95% confidence; and c = no significant difference.

The most differences were in information systems for on-time delivery, invoice accuracy, product quality, and new product development. More specifically, on- time delivery information systems were completely different except in terms of formality. Invoice accuracy information systems were different except in terms of formality and the richness of communication media used. Product quality information systems were different except in terms of direction of information flow and richness of communication media used. New product development information systems were different except in terms of formality and whether this information was exchanged.

The detailed results of comparisons made for each aspect of the IOIS for each information type were as follows (supporting tables in Appendix 2).

To see whether customers’ perceptions were different than suppliers’ perceptions about the nature of the information being exchanged, chi-square tests were undertaken (Appendix 2, Table 8). There were some statistical differences in the information being exchanged. Compared to sales staff, purchasing staff were more likely to exchange information about on-time delivery, product quality, accurate invoicing, and forecast demand and supply.

Differences in perceptions about the frequency of information exchanges were assessed with chi-square tests (Appendix 2, Table 9). Sales and purchasing staff also had different perceptions about the frequency with which all information types were exchanged, except for the completeness of orders. Sales staff felt they exchanged information more frequently than did purchasing staff about problem resolution, price negotiation, and invoice accuracy. Purchasing staff exchanged information more frequently about timeliness of deliveries, forecast supply and demand, order change flexibility, product quality, opportunities and threats, and new product development.

A comparison of perceptions about whether information was exchanged as often as they considered necessary (adequacy) was examined with t-tests (Appendix 2, Table 10). Overall, sales staff members were slightly less satisfied than purchasing staff that information was being exchanged as often as necessary. The differences in perceptions were statistically significant across most types of information including delivery timeliness, order completeness, invoicing accuracy, price negotiation, forecasts, new product development, and opportunities and threats.

Differences in perceptions about the direction of information flow were assessed with chi-square tests (Appendix 2, Table 11). Compared to sales staff, purchasing staff perceived information to flow more in both directions about accurate invoicing, flexibility to accept order changes, completeness of orders, and new product development. However, purchasing staff perceived delivery timeliness information may also come upstream from suppliers one way information flow.

Differences in perceptions about the formality of the information exchange systems were also assessed with chi-square tests (Appendix 2, Table 12). As respondents could specify if there were both formal and informal systems, percentages were calculated based on the percent of possible cases for each category and chi-square tests run for formal and informal systems variables. While sales staff were more likely to have formal systems for problem resolution, purchasing staff were more likely to have formal systems to exchange information about product quality, timeliness of deliveries, and forecasts of supply and demand. Compared to purchasing staff, sales staff members were more likely to have informal systems to exchange information for price negotiations, problem resolution, product quality, and new product development.

Comparison of the richness of the communication used to convey different information types was examined using chi-square tests (Appendix 2, Table 13). Following Daft and Lengel (1986), the media was ordered from most (1) to least rich (3): 1—face to face; 2—telephone; and 3—written e-mail, fax, invoice, or report. Compared to purchasing staff, sales staff perceived they used more rich face-to-face communication tools to exchange information about new product development and opportunities and threats. However, purchasing staff perceived they used more rich communication tools to exchange information about forecasts, timeliness of deliveries, completeness of orders, and order change flexibility.

An overall comparison of sales and purchasing staff satisfaction with the IOIS was tested using t-tests (Table 3). Differences were significant across all variables, with purchasing staff more satisfied than sales staff.

Table 3: Sales and purchasing staff satisfaction with the inter-organizational information systems

	Sales		Purchasing	Diff in
	Mean	S. D.	Mean	S. D.	Means	Sig
Timely and up to date	5.0	1.2	5.6	1.0	-0.6	a
Accuracy, reliability, and completeness	5.1	1.1	5.6	1.0	-0.5	a
Usefulness and relevancy	5.3	1.1	5.5	1.1	-0.3	a
Depth and range of content	4.7	1.2	5.2	1.3	-0.6	a
Change in timeliness and up to date	4.7	1.1	5.3	1.0	-0.6	a
Change in accuracy, reliability, and completeness	4.7	1.1	5.2	1.1	-0.5	a
Change in usefulness and relevancy	4.7	1.1	5.2	1.0	-0.6	a
Change in depth and range of content	4.8	1.2	5.3	1.1	-0.5	a
Information shared has improved our knowledge	4.1	1.8	5.6	1.2	-1.5	a
Customer/supplier initiates new ideas for improvement	3.7	1.7	4.6	1.7	-0.9	a
Significance: a = 99% confidence; b = 95% confidence; and c = no significant difference.
Scale of (1) dissatisfied or less satisfied to (7) very satisfied or more satisfied.

In conclusion, there were differences between sales and purchasing staff across most facets of the IOIS for most information types. Purchasing staff were more satisfied with the IOIS with suppliers. They exchanged more types of information and were slightly more satisfied that information was exchanged whenever necessary. Purchasing staff exchanged all information types more frequently than sales staff, with the exception of problem resolution, price negotiation, and invoice accuracy. They were more likely to perceive information flowed more often in both directions. While sales staff used richer media to exchange information about longer-term strategic issues, such as new product development, opportunities, and threats, purchasing staff used richer media for operational issues. The extent that the two groups had more formal or informal systems varied depending on the type of information exchanged. To explain why these differences arose, the nature of the relationships with customers and suppliers was compared.

Customer/Supplier Relationship Perceptions

The t-tests were used to see whether sales staff had different perceptions from purchasing staff about the nature of the relationships with customers and suppliers (Table 4). There were significant differences, with sales staff rating customers lower (compared to purchasing staff rating of suppliers) in terms of their responsiveness and willingness to change and the changes in this over the last 5 years, the overall performance compared to others in industry, their trustworthiness compared to others in industry, and how this had changed over the last 5 years. However, sales staff had a higher commitment to developing long-term relationships with customers compared to purchasing staff commitments to suppliers. Overall, in comparison to sales staff, it would seem that purchasing staff perceived they had better relationships with suppliers but did not need to be as committed to them. The reasons for these differences in perceptions may be explained by the nature of the environment in which they were doing business.

Table 4: Sales and purchasing staff perceptions about the relationship

	Sales		Purchasing		Difference
	Mean	Std Dev	Mean	Std Dev	in Means	Sig
Customer/supplier responsiveness and willingness to change	4.7	1.3	5.7	1.5	-1.0	a
Change in responsiveness and willingness to change	4.7	1.4	5.1	1.2	-0.4	a
Commitment to developing long-term relationships	6.8	0.6	6.1	1.3	0.6	a
Change in commitment to developing long-term relationships	4.8	1.3	4.8	1.4	0.0	c
Overall performance compared to others in industry	5.3	1.1	5.7	1.0	-0.4	a
Change in overall performance	5.1	1.2	5.0	1.2	0.1	c
Trustworthiness compared to others in industry	4.6	1.3	5.4	1.2	-0.8	a
Change in trustworthiness	4.2	1.0	4.5	0.9	-0.4	a
Significance: a = 99% confidence; b = 95% confidence; and c = no significant difference.
Scale of 1 to 7, with 1 being low and 7 being high.

Perceptions of Business Environment

Purchasing and sales staff had significant differences in perceptions about most aspects of the business environment (Table 5). Compared to purchasing staff, sales staff perceived that they were more dependent on customers who had greater influence over their organizations and were more difficult to replace, and that they would choose to remain with them if alternatives were available. Sales staff perceived their organization was more reliable in providing customers with predictable quality and little variability in production yields. In addition, sales staff perceived customers were in a more uncertain market, with higher competition affected more by changes in consumer preferences. In summary, compared to purchasing staff, sales staff members were in a more uncertain business environment and were more dependent on their customers.

Table 5: Sales and purchasing staff perceptions about the environment

	Sales		Purchasing		Difference
	Mean	Std Dev	Mean	Std Dev	in Means	Sig
Dependency and Power
Choose to remain with them if alternatives available	6.4	1.2	5.4	1.8	1.0	a
Crucial to future performance	5.9	1.6	5.6	1.8	0.3	b
Difficulty in replacement	5.8	1.8	4.4	2.2	1.4	a
Importance to customer/supplier	5.6	1.8	5.7	1.6	-0.1	c
Strength of influence over us	4.8	1.5	3.8	1.8	1.0	a
Uncertainty
Quality of supply predictability	6.5	0.7	5.8	1.5	0.6	a
Variability of production yields	2.2	1.5	3.4	1.9	-1.2	a
Level of competition	6.1	1.3	4.9	2.0	1.2	a
Rate of change in consumer preferences	4.5	1.8	3.9	1.8	0.6	a
Volume of supply predictability	5.6	1.1	5.4	1.5	0.2	c
Demand predictability	5.1	1.5	5.1	1.5	0.0	c
Significance: a = 99% confidence; b = 95% confidence; and c = no significant difference.
Scale of 1 to 7, with 1 being strongly disagree and 7 being strongly agree.

Multivariate Analysis

As a result of the statistical differences between customers and suppliers as revealed by the initial t-tests and chi-square tests, it was considered that multivariate data analysis might be appropriate to take account of multicollinearity. Consequently, a stepwise discriminant analysis (Klecka, 1980) was undertaken to determine, in a multivariate sense, which of the variables differed between the two groups. Using the F-statistic of the between-object to within-object variance as a measure of separation (Johnson, 1977), sales and purchasing were found to be significantly different from each other at the 0.001 level, (F-statistic 39.1 significance less than 0.001), suggesting that meaningful differences exist. Using the I² statistic suggested by Peterson and Mahajan (1976), it was found that the single function between the two groups explained 79% of the variation in the data. The method was 96% accurate in correctly classifying respondents, which was higher than the 60% and 30% expected by chance (95% using the leave-one-out cross-validation procedure). Following Johnson (1977) and Soutar and Clarke (1981), variables with structural correlation coefficients greater than 0.25 are usually used to interpret the functions. However, all variables had structural correlations less than 0.24. This, along with the very high I², indicated that while there were significant differences between purchasing and sales staff, the variables that explained these differences were included in the model. Therefore, the standardized canonical discriminant function coefficients and the means for each group were used to explain the differences between the customers and suppliers (Table 6). The results need careful interpretation, as the variables were entered into discriminant analysis in a stepwise manner. Although the best variables were entered, this may mean that multicollinear variables that do not measure the differences quite as well were eliminated, when they may assist in interpreting differences.

Table 6: Discriminant analysis

Independent Variables	Discriminant	Sales	Purchase	Diff in
	Coefficient	Mean	Mean	Means
New product development communicated (1 = yes)	-0.48	0.95	0.96	0.01
Quality communication (1 = yes)	-0.85	0.97	1.00	0.03
Quality relative frequency (never = 1 to 7 = when necessary)	-0.59	6.8	7.0	0.2
Price negotiation communication (1 = yes)	1.06	0.97	0.97	0.0
Price negotiation informal system (1 = yes)	0.46	0.94	0.93	-0.01
Order completeness informal system (1 = yes)	-0.45	0.74	0.70	-0.04
Forecast formal system (1 = yes)	-0.49	0.40	0.76	0.36
Invoice accuracy, both directions (1 = yes)	0.66	0.94	1.00	0.06
Invoice accuracy, one direction (1 = yes)	0.82	0.06	0.00	0.06
Usefulness and relevancy of information satisfaction (low = 1 to 7 = high)	0.49	5.3	5.5	0.3
Change in usefulness and relevancy of information satisfaction (less = 1 to 7 = more satisfied)	-0.68	4.7	5.2	0.6
Accuracy, reliability, and completeness information satisfaction (low = 1 to 7 = high)	-0.44	5.1	5.6	0.5
Change in accuracy, reliability, and completeness information satisfaction (less = 1 to 7 = more satisfied)	1.30	4.7	5.2	0.5
Information shared has improved our knowledge (disagree = 1 to 7 = agree)	-0.63	4.1	5.6	1.5
Choose to remain with them if alternatives available (disagree = 1 to 7 = agree)	0.66	6.4	5.4	-1.0
Difficulty in replacement (disagree = 1 to 7 = agree)	0.51	5.8	4.4	-1.4

There were differences in the IOIS used by sales and purchasing staff. Compared to sales staff, purchasing staff were more likely to exchange information about new product developments and quality issues, and perceived quality information was exchanged whenever necessary. Purchasing staff used more formal systems for the exchange of forecast information. Sales staff used more informal systems for exchange of price negotiations and order completeness. The exchange of invoicing accuracy information was more one directional for sales staff.

There were also differences in satisfaction with the IOIS. Compared to sales staff, purchasing staff were more satisfied with usefulness and relevancy, and accuracy, reliability, and completeness and this satisfaction had improved more over time. Purchasing staff perceived that information shared with suppliers had improved their knowledge.

In addition, the environment in which the business was conducted was perceived to be different by sales and purchasing staff in terms of dependency and loyalty. Sales staff were more likely to remain with customers if alternatives were available (loyalty) and perceived it would be harder to replace customers.

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