Abstract
Most often, the victims of financial crises are small and medium-sized enterprises. Very often, even short-term payment gridlocks can lead to their bankruptcy. All over the world, managers of such enterprises are trying to introduce solutions that will improve their financial security. Branch group purchasing organizations (GPOs) are a very popular method to improve the financial security and financial situation of small and medium enterprises. They are multi-stakeholder organizations using the effect of scale. It allows them to reduce costs, increase sales and gives many opportunities to build a policy of managing liquidity. The purpose of the article is to present the impact of branch GPOs on the financial liquidity of small and medium-sized enterprises. The research was conducted on a group of 96 Polish small and medium-sized commercial enterprises operating in the construction industry. The study showed that the analyzed units do not have problems with financial liquidity, due to the use of a strong scale effect.
Highlights
From the point of view of small and medium enterprises, their development depends on two factors of profit and financial security
The units, which are referred to as trade gropu purchasing organizations, operate in multi-stakeholder entities, and they were selected for research because in recent years in Poland a large number of bankruptcies were recorded in this area. This was mainly due to the emergence of payment gridlocks, which very often led to a loss of financial liquidity in SMEs operating in the construction industry
In the case of enterprise management, it is most difficult to maintain a safe level of financial liquidity and high profitability
Summary
From the point of view of small and medium enterprises, their development depends on two factors of profit and financial security. In the area of corporate financial management, profits are the result of an appropriate revenue and cost management policy, while financial security is mainly equated with the results of financial liquidity ratios. In the case of small enterprises, competition with powerful enterprises in the area of costs, increasing the scale of sales, and credit policy of supply organization is very difficult. Among the many tools that can be used and which are a great opportunity for gradual and sustainable development and, above all, help maintain the financial liquidity of these smaller units, included in the group of small and medium-sized enterprises, is joint activities within the purchasing groups. Companies of various sizes operating in virtually every industry can take advantage of this opportunity
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
