Abstract
Purpose: The purpose of this study is to examine the significance and the role of supplier rating as a formalised supplier quality measure to achieve better- negotiated prices and to identify price premium resulting from improved rating.Methodology/Approach: Data from real B2B environment of electronic reverse auction SW solution ProeBiz were obtained and processed. Data from the reverse rating approach were used where the default rating value is 1 and improvements of rating lead to decreasing the rating value. Except standard descriptive statistics, non-parametric correlation and Kruskal-Wallis tests, the knowledge discovery techniques by decision trees CHAID algorithm were used.Findings: From our empirical research results, there is the evidence of a significant positive relation of supplier quality or rating improvements on a negotiated price for suppliers. Improving rating from the default value (1.00) to (0.98-0.95) can lead to better- negotiated prices for suppliers in English auction expressed as price premium in the value of 4%.Research Limitation/implication: Research has several limitations, esp. in the size of the sample and sectorial view as the research is based on data from construction, electro-mechanics and logistics sector.Originality/Value of paper: The paper is original and not published in other publications.
Highlights
There is a wide range of concepts and theories that analyse the economic aspect of trust in society
All 110 records were realised by electronic reverse auction ERMMA with information of supplier rating
The supplier rating is used for negotiation in an electronic reverse auction in the way, that the individual bids/prices of the bidders are multiplied by their rating value
Summary
There is a wide range of concepts and theories that analyse the economic aspect of trust in society. The importance of trust has been confirmed in researches from many scientific disciplines such as sociology, political science, economics, philosophy and in various areas of management. Trust is perceived as an important factor affecting communication, leadership, negotiation, working relationships, etc. Knack and Zack (2003) discuss that “greater interpersonal confidence affects the decline in transaction costs associated with investment activities in the country, affecting economic growth”. The conclusions of many scientific papers on the study of trust and its position in the economy clearly show that “high-confidence companies have a higher rate of investment and growth”.
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