THE INTENTION-ACTION GAP IN CORPORATE PROCUREMENT

CC 504 “Corporate Social Responsibility” | Spring 2023

Prof. Dr. Christoph Bode

Ruth Schültken
Endowed Chair of Procurement
Area Operations Management
The teaching team for this session

 Education:
Prof. Dr. Christoph Bode
Responsible lecturer − M.Sc., University of Karlsruhe (KIT)
− M.Eng. and M.Sc., Grenoble Institute of
bode@bwl.uni-mannheim.de Technology (INPG), France
− Ph.D., WHU – Otto Beisheim School of
Management
− Habilitation, ETH Zurich, Switzerland
 Prior positions in academia:
− ETH Zurich, Switzerland
− Tilburg University, The Netherlands
 Publications in journals such as the
Academy of Management Journal,
Ruth Schültken, M.Sc. European Journal of Operational Research,
Teaching assistant Decision Sciences, Journal of Operations
Management, or Organization Studies.
schueltken@bwl.uni-mannheim.de

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The teaching team for this session

 Education:
Prof. Dr. Christoph Bode
Responsible lecturer − M.Sc., Business Administration –
Supply Chain Management, University
of Cologne
bode@bwl.uni-mannheim.de
− B.Sc., Business Administration,
University of Cologne
 Research interests:
− Sustainable procurement
− Agile procurement

Ruth Schültken, M.Sc.

Teaching assistant

schueltken@bwl.uni-mannheim.de

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Agenda

THE INTENTION-ACTION GAP IN CORPORATE PROCUREMENT

1 The Endowed Chair of Procurement
2 Primer
3 Research Insights

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The area “Operations Management” in Mannheim covers the entire supply
chain

University of Mannheim, Business School

Area Operations Management

Prof. Fleischmann Prof. Schön
Service
Logistics and Supply
Operations
Chain Management
Prof. Stolletz Prof. Bode

Procurement
Production

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In 2014, the University of Mannheim and a circle of sponsors founded the
first Chair of Procurement at a German university

Christoph Helke
Bode Naujok

Davide Ruth Leonard Steffen

Burkhart Schültken Berlien Kokozinski

Myrna Jan
Hantke Spreitzenbarth

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Our interests revolve around markets, actors, and activities in upstream
supply chains

Markets
Interests
Supply Customer
Behaviors Markets Markets

Entrepreneurship
Actors
Innovation
Supply Customer
Buying
Performance base base
firms
and network and network
Relationships
Activities
Risks and disruptions
Procurement
Strategies Purchasing and Supply Management

Sustainability Supply Chain Management

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We teach in all Mannheim programs

Introductory modules Advanced modules Seminar modules Theses

Bachelor
OPM 452
Processes & Strategies of Bachelor Thesis
Negotiation

OPM 591 OPM 691 OPM 791

Master Thesis
Strategic Procurement Supply Risk Management Research Seminar Proc.

OPM 790
OPM 593 OPM 692 OPM 792
Master Colloquium
Negotiation Strategic Sourcing Research Seminar Proc.
Master

Proc.
OPM 597
Next Generation
Procurement
OPM 510
OPM 693
Sustainable
Sourcing Excellence
Operations
Doctorate

OPM 806
Empirical Research in Dissertation
Operations Management

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Fall: Sep – Dec Spring: Feb – Jun
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… and pursue research projects in five thematic areas

Research landscape Themes

Supply chain management

1. Risk, disruptions, and resilience
1
2. Relationships
2
Logistics Procurement 3
3. Innovation and entrepreneurship
4. Sustainability
4

Industrial marketing management 5.

5 Strategies and performance

Motivation Approach
 Conceptual relevance:  Mainly empirical (deductive/inductive)
Build, extend, and test theory that is of relevance to the field  Interdisciplinary approaches
 Instrumental relevance:  Multi-method designs
Develop tools and frameworks that support the profession  Rigor and relevance

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Agenda

THE INTENTION-ACTION GAP IN CORPORATE PROCUREMENT

1 The Endowed Chair of Procurement
2 Primer
3 Research Insights

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The role of purchasing has changed: From an operational to a strategic
function

Past Present

Procurement is an MBA’s dream –

Everything is strategy
and everything is deal!

“Engineers who can’t add, operators

who can’t run their equipment, and
accountants who can’t foot numbers
become purchasing professionals.”

Source: Chapman, Dempsey, Ramsdell, & Reopel (1997) CC504 | February-21, 2023
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Firms have been farming out more and more activities to functional
specialists… Example

“Tim Cook came out of procurement

which was just the right background
for what we needed.”

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… and procurement is tasked to organize the resulting interfaces
Example

Design & development

Manufacturing Configuration Distribution
Marketing
& assembly & testing & Sales
Look Software
Hardware
& feel & content

Value generation through tight end-to-end control and integration

 Vision, design, brand, customer promise (differentiating and controlled in-house)
 Integrated eco-system: iTunes, App Store, all devices
 Tight management of all partners in the chain along strict policies

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Hence, the relatively narrow scope of purchasing has been expanding

Provision of the necessary

product and operating
materials, as well as facilities
and services
 at the right time,
 in the right quantity,
 of the required quality,
 and at a good price.

Early influence
on product Globalization
costs
Supplier
innovation
Make or buy?
…
Sustainable
Supply chain supply chains
risks

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Procurement has a massive potential to contributing to sustainability
challenges…

Procurement
Share of
Manufacturer external value Tier 1 (example) Tier 2 Tier 3 Tier n Examples
creation*

 Pollution
Plloution
Automotive 65% Steel …  Energy
efficiency

 Child labor
Consumer
50% Chemicals …  Toxic
goods
materials
Retail

Consumers
 Energy
Consumer efficiency
50% Circuit boards …
electronics  Toxic
materials

 Pollution
Logistics/  Energy
Fuel …
transportation 40% efficiency
 Labor rights

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… because firms are held responsible for the sustainability-related conditions
in their upstream supply chain
Tier n Tier 1 Focal firm

Supplier1,i

Suppliern,i …
Supplier1,j Buying firm

Suppliern,j …
Supplier1,k

 Stakeholders have begun holding buying firms accountable for the sustainability-related conditions at their suppliers and even sub-
suppliers
 If considered unacceptable, the involved firms may lose legitimacy (“license to operate”)
 Legislation on supply chain due diligence and transparency, e.g., “Dodd-Frank Act” and conflict minerals (US), “Modern Slavery Act” (UK), “loi
sur le devoir de vigilance” (France), “Lieferkettengesetz” (DE)
 Europe: Corporate Sustainability Due Diligence Directive

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Regulatory pressures to drive sustainability into supply chains are powerful

How relevant are the following stakeholder pressures for implementing sustainability practices in your
supply chains?

Regulatory 19% 11% 8% 28% 6% 11% 12% 4%

Customers 15% 11% 10% 32% 6% 7% 14% 4%

16%
Shareholders 64% EMEA 16%
12% 10% 11% 24% 11% 7% 20% 5% US&CA ASIA

Employees 6% 6% 9% 31% 11% 14% 20% 4% 2%

LATAM
1%
Local 6% 6% 7% 27% 11% 15% 25% 5% AUS
communities
NGOs 5%3%5% 27% 7% 11% 35% 6%

to a very large extent to a large extent to a moderate extent somewhat

to a small extent to a very small extent not at all N/A

n = 362

Source: Bode, Vollmer, Burkhart, & Schültken (2021): ISM State of the Procurement Profession Survey 2021 CC504 | February-21, 2023
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What are generic responses options?

Fight Flight Freeze Fawn

Stand your ground Run away Play dead Appease

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Agenda

THE INTENTION-ACTION GAP IN CORPORATE PROCUREMENT

1 The Endowed Chair of Procurement
2 Primer
3 Research Insights

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Motivation: Consumer Intention-Action Gap

Consumer’s Intentions Consumer’s Actions

50% of the consumers are 31% of the consumers

willing to pay a premium for bought most or all products
sustainable brands – an sustainably in their last
average of 70% purchase
Consumer
Intention-
Action Gap

Source: https://newsroom.ibm.com/How-retailers-can-meet-consumers-growing-demand-for-sustainability-and-hybrid-shopping-experiences CC504 | February-21, 2023

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Motivation: Corporate Intention-Action Gap
Example 3M

Company’s Intentions Company’s Actions

Improve water efficiency by

Improved water efficiency by
10% between 2015 and
0% between 2015 and 2021
2025

Corporate
Improve energy efficiency Intention- Improved energy efficiency
efficiency by 30% between Action Gap by 9% between 2015 and
2015 and 2025 2021

Source: https://multimedia.3m.com/mws/media/2006066O/2021-sustainability-report.pdf CC504 | February-21, 2023

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Literature
Corporate Sustainability Intentions
 Corporate intentions aim at legitimacy (Meyer & Rowan, 1997) by
complying with norms and regulations (Aldrich & Fiol, 1994), such as
sustainability (Davis, 1973; Scherer et al., 2013)
 Intentions of companies operating in the same environment
converge (DiMaggio & Powell, 1983; Meyer & Rowan, 1977)
 Intentions are reflected in the competitive priorities (Yoon H Kim,
Sting, & Loch, 2014)
Corporate Sustainability Actions
 Actions aim at efficiency (Meyer & Rowan, 1997)
 Actions vary between companies (Meyer & Rowan, 1977) and are
difficult to assess for external stakeholders (Suchman, 1995)
 Sustainability actions are implemented to a large extent in
procurement (Carter & Carter, 1998; Pagell & Wu, 2009; Reuter et al., 2010)
Decoupling of Corporate Intentions and Actions
 Decoupling due to tension between focus on legitimacy and
efficiency (Meyer & Rowan, 1977)
❑ Delegation of activities to lower-level employees (Meyer &
Rowan, 1977; Mintzberg, 1978)
❑ Vague formulation of intentions (Bromley & Powell, 2012)
 Forms of decoupling regarding sustainability:
❑ Between the mainstream strategies of a company and their
sustainability strategy (Hengst, Jarzabkowski, Hoegl, & Muethel,
2020)
❑ Between the objective of sustainability at the corporate level
(intention) and the actions implemented to achieve this
objective (Hengst, Jarzabkowski, Hoegl, & Muethel, 2020)
RQ 1: What are the characteristics of the intention-action gap in
corporate sustainability? → Study
Study11
RQ 2: What mechanisms underlie the intention-action gap in
corporate sustainability? → Study
Study22
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 Study 1
Methodology: Characteristics of the Intention-Action Gap

Survey
Sector n %
 Worldwide self-administered online survey among 420 procurement practitioners
More products 230 54.37

 January 2022 – April 2022 Equal 34 8.04

More services 151 35.70
NA 8 1.89

 𝑆𝑈𝑆𝑇𝐶𝑂𝑀𝑃 : Relative importance of sustainability among the competitive priorities of the company (cost,
Cost leadership position n %
differentiation, resilience, sustainability) (intention)
Yes 49 11.58
 𝑆𝑈𝑆𝑇𝑃𝑅𝑂𝐶 : Relative importance of sustainability among the objectives in the sourcing process (cost, No 370 87.47
NA 4 0.95
differentiation, resilience, sustainability) (action)

 Segment: Only B2B vs. only B2C (7-point Likert scale)

Segment n %
 Sector: Only services vs. only products (7-point Likert scale) More B2B 201 47.52
Equal 37 8.75
 Cost leadership position compared to main competitor (7-point Likert scale)
More B2C 171 40.43
NA 14 3.31

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 Study 1
Methodology: Measurement of the Intention-Action Gap

Company’s Intentions Company’s Actions

Please distribute percentage points among the following Please distribute percentage points among the following
competitive priorities according to their relevance for objectives according to their significance for decision
your company’s top management. making in the sourcing process for your procurement
organization.
Cost
Cost
(e.g., Krause, Vachon, & Klassen, 2009;
(e.g., Porter, 1997)
Spina et al., 2013)

Differentiation Differentiation
(e.g., Porter, 1997) (e.g., Spina et al., 2013)

Corporate
Resilience Intention- Resilience
(e.g., Kwak, Seo, & Mason, 2018) (e.g., Krause et al., 2009, Spina et al., 2013)
Action Gap

Sustainability Sustainability
(e.g., Longoni & Cagliano, 2015) (e.g., Spina et al., 2013)

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 Study 1
Methodology: Conceptualization of the Intention-Action Gap

Intention-driven
gap
Action-driven
gap

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 Study 1
Results: All companies

All Companies
n 420
SUSTPROC 15.55
Variable Model 1 Model 2
Segment –0.32 (0.23) –0.34 (0.17)*
Sector –0.78 (0.22)*** –0.52 (0.16)**
Cost leadership position 0.80 (0.28)** 0.61 (0.21)**
SUSTCOMP 0.65 (0.03)***
Intercept 14.70 (1.96)*** 4.29 (1.54)**

R2 0.05 0.49
Adj. R2 0.04 0.48
ΔR2 0.44
F 7.58 99.7
Note. Standard error in parentheses. † p < 0.10, * p < 0.05,
** p < 0.01, *** p < 0.001.

Note. Dotted lines indicate the means.

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 Study 1
Results: Positive and Negative Intention-Action Gap

Companies with a Companies with a

Positive Intention-Action Negative Intention-Action
Gap Gap
n 92 (21.90%) 176 (41.90%)
SUSTPROC 15.98 9.05
Variable Model 1 Model 2 Model 1 Model 2
Segment –0.29 (0.64) –0.11 (0.32) 0.38 (0.31) –0.09 (0.18)
Sector –1.62 (0.57)** –0.41 (0.29) –0.85 (0.31)** –0.36 (0.18)*
Cost leadership position –0.22 (0.74) –0.05 (0.36) 0.64 (0.39) 0.41 (0.23)†
SUSTCOMP 1.22 (0.07) ***
0.60 (0.03)***
Intercept 23.13 (4.74)*** 7.60 (2.52)** 8.99 (2.85)** –1.07 (1.74)

R2 0.09 0.78 0.09 0.70

Adj. R2 0.06 0.77 0.08 0.69
ΔR2 0.71 0.61
F 2.92 77.86 5.82 98.05
Note. Standard error in parentheses. † p < 0.10, * p < 0.05, ** p < 0.01, *** p < 0.001.

Note. Dotted lines indicate the means.

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 Study 1
Results: Characteristics of the Intention-Action Gap

 Companies selling products have a larger negative action-driven gap than companies selling services.

 Companies selling to end customers have a larger negative action-driven gap than companies selling to business customers.

 Companies with a cost leadership position compared to their main competitor have a larger positive action-driven gap than companies
with no cost leadership position.

 Companies with a positive intention-action gap have a larger action-driven gap than companies with a negative intention-action gap.

 Companies with a negative intention-action gap have a larger intention-driven gap than companies with a positive intention-action gap.

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 Study 2
Methodology: Mechanisms underlying the Intention-Action Gap

Interviews
Intention-Action Gap n %
 Semi-structured interviews of 45 – 60 min among 22 procurement practitioners
Positive 5 22.73%
 December 2022 – February 2023 None 4 18.18%

Negative 13 59.09%

Cost-leadership
 Consequences of the intention-action gap: What is the consequence of implementing more or fewer n %
Position
Yes 3 13.64%
sustainability-related actions in procurement than intended by the top-management?
No 19 86.36%
 Emergence of the intention-action gap: How are the intentions regarding sustainability determined in your
Sector n %
company? How are the actions regarding sustainability determined in your procurement organization?
More products 21 95.45%
 Closing of the intention-action gap: How does your company aim to align the sustainability actions More services 1 4.55%

implemented in procurement with the intentions regarding sustainability? What hinders the alignment of the
Segment n %
sustainability actions implemented in procurement with the intentions regarding sustainability?
More B2B 15 68.18%

More B2C 7 31.82%

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 Study 2
Results: Consequences of the Intention-Action Gap

Positive Intention-Action Gap Negative Intention-Action Gap

Advantageous

 Implementation focus on procurement  No implementation focus on procurement

Scenarios

 Holistically implemented sustainability  Intentions are considered as future goals

 Inefficiencies  Inefficiencies

 Dissatisfied employees  Reputational risk

Risks

 Worsening of goal attainment

 Dissatisfied employees

Having no gap was perceived as desirable by most of the interviewees.

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 Study 2
Results: Emergence of the Intention-Action Gap

Company’s Actions
Company’s Intentions Drivers Constraints

 Investors  Intentions  Lack of resources  Focus on efficiency,

Positive Gap

 Lack of business lack of top

 Competitors  Supply chain regulation/ cases management
support,
 Customers reporting  Corporate culture,
lock-in effects,
measurability
 Employees time delay

 Brand/ product  Intentions  Lack of business  Lack of coordination

cases, mechanisms
Negative Gap

 Customers  Supply chain regulation/ time delay  Cultural differences,

reporting  Focus on efficiency, lack of
 Regulation/ reporting
lack of resources understanding,
 Competitors  Employees  Measurability lock-in effects
 Complex supply  Lack of top-
chains management support

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 Study 2
Results: Closing of the Intention-Action Gap

Company’s Actions
Company’s Intentions Constraints

 Brand/ product:  Complex supply chains:

❑ Supply chain transparency
❑ Sustainability as differentiation from ❑ Focus on most important suppliers
competitors  Lack of coordination mechanisms:
❑ In the future, „the best solution will ❑ Standards

Negative Gap
Positive Gap

❑ Processes
be also sustainable“
❑ Decision-making criteria
 Regulation/ reporting: ❑ Procurement-specific sustainability goals
and KPIs
❑ Sustainability certifications
 Lack of understanding:
❑ Sustainability reports ❑ Procurement representation in executive
board
❑ Sustainable procurement department
❑ Collaboration

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Discussion

Positive Intention-Action Gap Negative Intention-Action Gap

 Corporate sustainability intentions and actions are decoupled to a
lower extent
 Smaller intention-driven gap:
❑ External drivers demand compliance for granting legitimacy
❑ No intentions beyond
 Larger action-driven gap:
❑ (Procurement) Employees drive sustainability beyond
compliance and thus, the boundaries of the intentions
❑ Fewer constraints regarding the implementation of actions
 Corporate sustainability intentions and actions are decoupled to a
stronger extent, especially for high intentions
 Larger intention-driven gap:
❑ Compliance for achieving legitimacy
❑ Intentions beyond compliance to create positive brand/ product
image
 Smaller action-driven gap:
❑ (Procurement) Employees drive sustainability within the
boundaries of the intentions
❑ Lack of governance/ coordination mechanisms
❑ Complex supply chains

• The intention-action gap emerges due to one organizational unit driving sustainability beyond compliance; to achieve alignment, the
corporate-wide drive towards sustainability must be even and the company must work towards reducing action constraints.

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Conclusion
Scholarly Implications
 First empirical evidence for the existence of a corporate intention-
action gap following the idea of a consumer intention-action gap
 Conceptualization and measurement of the intention-action gap
 An intention-action gap comes with risks but is not always
disadvantageous
 Mechanisms underlying the emergence intention-action gap; basis
to understanding and achieving tight-coupling
Managerial Implications
 Insufficient to promote sustainability only at the top-management
level assuming that actions will follow
 Procurement’s sustainability actions can undershoot and
overshoot the corporate sustainability intentions
 To avoid the risks that go along with an intention-action gap,
intentions (positive gap) or actions (negative gap) should increase
Limitations
 Sustainable actions limited to procurement, further departments
are neglected
 Respondents might have more knowledge about sustainability
actions in procurement than about corporate sustainability
intentions
 Single respondent bias, social desirability bias
 Samples in Study 1 and Study 2 differ
Future Research
 Intention-action gap in further departments
 Top-management perspective on the intention-action gap
 Trend of the intention-action gap over time
 Cultural aspects that impact the emergence of an intention-action
gap
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 THE INTENTION-ACTION GAP IN CORPORATE PROCUREMENT

CC 504 “Corporate Social Responsibility” | Spring 2023

Prof. Dr. Christoph Bode

Ruth Schültken
Endowed Chair of Procurement
Area Operations Management
Backup: Role of Procurement is to Achieve Efficiency (Low Cost)

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