Individual manager experience influences on reverse auction use

Abstract

Electronic reverse auctions (e-RAs) are complicated sourcing tools that require a degree of mastery in order to achieve desired outcomes. Because the loss of supplier trust lies at the root of the complaints directed toward e-RAs, an individual manager’s experience at building supplier’s trust – or by skilfully implementing or selecting e-RAs – could mitigate this particular downside. These issues prompted an exploration of individual buyer experience as the critical filter through which pass procurement decisions. Findings indicate that the amount of savings is related to the experience specific to e-RA use. General buyer experience predicted e-RA outcomes such as satisfaction and reducing the negative impacts on supplier trust. The presented evidence highlights the difference between knowledge and wisdom – expertise specific to e-RAs may make them more efficient for cost savings, but it takes years of general procurement experience to manage the effects on relationships within and without the organisation.