Size and structure in the purchasing function: Evidence from German municipalities

This paper analyzes how German municipalities organize their purchasing activities. It aims to identify patterns in the structure of the purchasing function and to study how the size of the municipality influences the design of its purchasing organization. Therefore, an analytical framework based on contingency and organization theory is developed and results of an empirical study are presented. The results indicate that German municipalities use a medium level of centralization and specialization in organizing their purchasing activities, but that the purchasing process is highly formalized and represented on high hierarchical levels in many cases. As to the relationship between the size of a municipality and the structure of its purchasing function, the study indicates that size, measured by the number of inhabitants, the number of employees and purchasing volume influences the structural variables in various ways.