Research in purchasing and supply management (PSM) aims to develop and test theory that advances knowledge relevant to practitioners. Whilst one key aim of advancing knowledge of PSM is theory development, the approaches of theorizing vary. One approach is borrowing theories and concepts from external grand theories (EGT), for example transaction cost analysis. Another, emerging approach to theorizing is situated in PSM practice, in which middle-range theory (MRT) offers a relevant venue. This chapter presents MRT as a promising way of both specifying what theory is in the context of PSM, and how these theories come about, that is, theorizing. MRT derives from specific practical problems and pertains to a local setting but can, due to its modifiable feature, be transferred to and applied in other industrial sectors than the one being investigated. The chapter provides both the basic understanding as well as guiding principles for theorizing PSM through MRT.
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