engleski

Electronic reverse auctions – A factor of efficiency and transparency even in Croatia?

Business-to-business (B2B) online or electronic reverse auctions (eRAs or ERAs) are a prevalent and frequently used method of procurement in which buyers act as “price-makers” and sellers respond by indicating the prices they are willing to accept. eRAs produce the best results for low- risk products with common characteristics and low switching costs. They enable small firms to access a large pool of suppliers and eliminate geographical and linguistic barriers. However, they are most known for their effects regarding efficiency, especially for buying firms. On the other hand, suppliers can suffer due to buyers’ opportunistic and otherwise unethical behavior, which increases pressure for them to lower prices and decrease their profit margins. That is why eRAs are also known sometimes to be coercive and exploitative, which could be counteracted by suppliers’ collusive or otherwise unethical behavior. The vast majority of studies focus on buyer-supplier relationships in developed economies. This paper aims to determine how electronic reverse auctions are used in Croatia and their effects. Only six firms reported the use of eRAs, all large manufacturing companies. The majority experienced a very significant effect regarding price and time reductions and procurement transparency. However, eliminating geographical and linguistic barriers was not significant for all companies, indicating their domestic market orientation. Software costs were found to be a significant barrier toward greater use of electronic reverse auctions in Croatia. However, in countries with significant corruption, such as Croatia, companies could significantly benefit from greater transparency. It is, therefore, suggested that local or national authorities offer support to ensure more extensive use of electronic reverse auctions. The qualitative approach of future studies and longitudinal research design could allow for an adequate understanding of the process of adopting eRAs in Croatia.

Auctions, electronic reverse auctions, efficiency, productivity, transparency, Croatia

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