Success factors for sourcing teams: How to foster sourcing team effectiveness

► We identified determinants of success in 59 cross-functional sourcing teams. ► Sourcing team effectiveness was found to be a three-dimensional construct. ► Empowerment and formalization both foster sourcing team effectiveness. ► Functional integration is crucial for developing the purchasing function. ► Effort, internal communication and external communicationare important mediators. Cross-functional sourcing teams have become a popular coordination mechanism to organize company procurement activities. However, many of these teams fail to meet management’s long-term expectations. A lack of sourcing-specific team research obstructs a clear understanding of the factors that drive sourcing team performance. In the present study, we identified three major dimensions of sourcing team success. Apart from general overall team effectiveness and supply base management effectiveness, sourcing teams need to effectively cooperate with other stakeholders within the firm in order to secure purchasing cost savings and supplier contracts. Additionally, we identified factors that underlie sourcing team success, based upon extensive survey data taken from members, leaders, and managers of 59 (cross functional) sourcing teams in twelve large, multinational companies. Our study revealed that different success factors drive different sourcing team effectiveness dimensions. Also, we found a seemingly contradictory need for both autonomy and formalization to ensure sourcing team effectiveness on all three dimensions. The latter seemed particularly important for teams with high levels of functional diversity.