Open book practices in buyer‐supplier relationships in India

Abstract

If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -This paper seeks to explore how Indian buying firms practise an open book (OB) policy in supplier relationships in three industries, i.e. the vehicle industry, the construction industry and the information technology industry. It also aims to study determinants of open book practices. Design/methodology/approach -Application of the OB policy is operationalised as the nature of open book practices, the extent and stage of data disclosed, the form of data disclosed, the direction of data disclosed, the attitude towards cost data disclosed, and the purpose and conditions of data disclosed. Determinants of the open book policy comprise characteristics of the exchange, the product, the buyer, the supplier and the supply market. Qualitative data were collected in the form of 22 interviews with representatives of three buying organisations and several of their suppliers in order to build three case studies. Findings -The results suggest that the OB policy is used by buyers for diverse purposes ranging from strategic to operational, for example value engineering at the product development stage, to ensure supplier margins, for self improvements and cost reductions, and country entry decisions. Similarly, the data shared ranged from narrow to wide in scope and scale. Suppliers' attitudes ranged from fairly neutral to very negative towards open books. Power asymmetries, the number of alternative suppliers, product performance characteristics and value, incentives offered, and buyer efforts were found to influence OB practices. Practical implications -Experiences gained from employing an OB policy in vehicle manufacturing suggests that firms in other industries can better leverage the use of open books for joint problem solving, equitable profit sharing and supplier selection. Originality/value -The paper highlights that an OB policy can have broader applicability than recognised by many past studies and indicates that it can serve purposes of strategic decision-making. It can also be an integrated part of a buyer's risk reduction strategy. Further, the study provides specific recommendations for Indian companies with regard to the application of an open book policy.Open book pra...

Dynamic and static pricing in open-book accounting

“…Our definition conforms in general to other definitions of OBA (e.g. Agndal and Nilsson, 2010, Alenius et al, 2015, Kumra et al, 2012, Suomala et al, 2010, Windolph and Möller, 2012. In addition, our definition stresses the fact that the kind of information shared can vary within different OBA agreements.…”

“…Alenius et al, 2015, Agndal and Nilsson, 2010, Kumra et al, 2012, Agndal and Nilsson, 2008 and static prices (e.g. Kajüter and Kulmala, 2005, Cooper and Slagmulder, 2004, Agndal and Nilsson, 2010, Kumra et al, 2012.…”

Supplier Integration in Category Management : A case study of the situational impact on relationship performance and interdependence

“…Mainly, the view on goodwill trust as a requirement for OBA to occur can be understood as a requirement for buyer-supplier collaborations in general to take place. This is supported by several other authors (Carr and Ng, 1995;Mouritsen et al, 2001;Kumra et al, 2012). The paper also contributes by making an important distinction between goodwill and competence trust, and argues that competence trust can be built as the relationship develops.…”

Inter-organisational asset management: linking an operational and a strategic view

“…They include for instance target costing, cost tables/disclosed cost data and activity-based costing (Axelsson et al, 2002), and they are typically employed in some way or another to improve dyadic inter-organisational coordination of purchasing and value chain operations in the present cost accounting and management literature. There are numerous empirical case studies where a company and its supplier(s) have implemented at least one IOCM technique in the above-mentioned context (e.g., Mouritsen et al, 2001;Kulmala et al, 2002;Agndal and Nilsson, 2008;Free, 2008;Suomala et al, 2010;Romano and Formentini, 2012;Kumra et al, 2012). The nature of such customer-supplier relationship, and the purchasing strategy of the customer in particular, can be either transactional or relational (Axelsson et al, 2002;Agndal and Nilsson, 2010).…”

“…The grown demand for inter-organisational transparency and openness of formerly internal, and sensitive data are arguably eminent topics in the area, and also potential sources for the above-mentioned disagreements. The method for disclosing multifaceted cost data and other information from one company to another is known as open-book accounting (e.g., Seal et al 1999;Kajüter and Kulmala 2005;Kumra et al, 2012). Particularly small companies are wary of data misuse and abuse conducted by their larger and more powerful partners, who could opportunistically monopolise also the benefits offered by the openness (Windolph and Möller, 2012).…”