Implementation of interorganizational cost management and its infrastructure: the case of a Korean ‘Chaebol’ firm

Sung Kyu Sohn, Il Hang Shin, Sorah Park

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

In this paper, purchasing innovation in the case of a distribution company is analysed from an interorganizational cost management (IOCM) perspective. In this company, purchasing costs play an important strategic role. This study suggests that a new practice of IOCM is necessary that is suitable for Korea's economic circumstances, including the family-controlled conglomerates (Chaebols) that dominate the entire economic system. The strong need to reduce purchasing costs within Chaebols and the Korean government policy that promotes joint growth of large and small firms are crucial factors in the successful implementation of IOCM practices. We also discuss the infrastructure that enables effective IOCM in the long term, thereby adding new findings to academic research in the area, and practical implications of this benchmark case for other companies planning purchasing innovations.

Original languageEnglish
Pages (from-to)228-250
Number of pages23
JournalAsia Pacific Business Review
Volume21
Issue number2
DOIs
StatePublished - 3 Apr 2015

Keywords

  • Chaebol
  • South Korea
  • interorganizational cost management
  • purchasing innovation

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