Question

While the purchasing function is one of the most value-enhancing functions in any organization, why might it not be preferable to periodically monitor the purchasing function's performance against set standards, goals, and/or industry benchmarks?

a) It hinders organizational flexibility
b) It increases supplier collaboration
c) It ensures cost-effectiveness
d) It aligns with industry trends

Answer 1

Periodically monitoring the purchasing function's performance against set standards, goals, and/or industry benchmarks may not always be preferable due to several reasons: hindering organizational flexibility, increasing supplier collaboration, and possibly detracting from cost-effectiveness.

Step-by-step explanation:

While the purchasing function is indeed one of the most value-enhancing functions in an organization, periodically monitoring its performance against set standards, goals, and/or industry benchmarks may not always be preferable due to several reasons.

• It hinders organizational flexibility: Constantly monitoring the purchasing function may limit the organization's ability to adapt to changing market conditions or seize new opportunities.
• It increases supplier collaboration: Regular monitoring may create an environment of competition among suppliers instead of collaboration, hampering the establishment of strong partnerships.
• It ensures cost-effectiveness: While monitoring can help identify cost-saving opportunities, placing too much emphasis on performance against set standards may detract from other important factors, such as quality or innovation.