Transaction costs and costs of activity independence in B2B buyer-supplier relationships: analysis of Central and Eastern European companies

Abstract

PurposeThis paper aims to identify purchasing-related costs through the prism of transaction costs and costs of purchasing management activity.Design/methodology/approachThe authors conducted a survey among 150 medium and large manufacturing companies in the chemical, automotive and electromechanical industries operating in Central and Eastern European countries. The collected data were analyzed using confirmatory factor analysis.FindingsThe studied companies carry out an integrated purchasing-related cost system. The authors found a statistical significance of the covariances between the pretransaction, transaction and post-transaction costs. In addition, costs that are of particular importance in long-term purchasing transactions were identified. Moreover, the authors identified the costs of quality and support actions as the most significant.Practical implicationsThis research details the discussion of costs with consideration for the insights of managers of medium-sized and large companies.Originality/valueThe paper contributes to the knowledge of purchasing-related costs through the lens of the total cost of ownership that influences the purchasing management and the decisions within the buyer-supplier relationship.