An empirical study of electronic reverse auction project outcomes

We extend the conceptual model developed by Amelinckx et al. (2008) by relating electronic reverse auction (ERA) project outcomes to ERA project satisfaction. We formulate hypotheses about the relationships among organizational and project antecedents, a set of financial, operational, and strategic ERA project outcomes, and ERA project satisfaction. We empirically test the extended model with a sample of 180 buying professionals from ERA project teams at large global companies. Our results show that operational and strategic outcomes are positively related to ERA project satisfaction, while price savings are not. We also find positive relationships between financial outcomes and project team expertise; operational outcomes and organizational commitment, cross-functional project team composition, and procedural fairness ; and strategic outcomes and top management support, organizational commitment, and procedural fairness. An electronic reverse auction (ERA) is ''an online, real-time dynamic auction between a buying organization and a group of pre-qualified suppliers who compete against each other to win the business to supply goods or services that have clearly defined specifications for design, quantity, quality, delivery, and related terms and conditions. These suppliers compete by bidding against each other online over the Internet using specialized software by submitting successively lower priced bids during a scheduled time period'' (Beall et al. 2003). Over the past two decades, ERAs have been used in various industries, (Beall et al. 2003, Ray et al. 2011, Wang et al. 2013). ERAs are increasingly popular among buying organizations, although their use sparks controversy and ethical concerns in the sourcing world (Charki et al. 2010). Indeed, the one-sided focus on price savings in ERAs is considered to be at odds with the benefits of long-term cooperative buyer–supplier relationships (Beall et al. 2003, Hunt et al. 2006). However, several researchers have declared that ERAs are here to stay, as they are relatively easy to install and use and have resulted in positive outcomes across a range of offerings and contexts (Beall et al. 2003, Hur et al. 2006). In prior research work on ERAs, Amelinckx et al. (2008) developed a conceptual model based on an extensive review of the electronic sourcing literature and exploratory research involving multiple case studies. The authors identified operational and strategic outcomes that buying organizations can obtain in ERAs, in addition to financial gains. Furthermore, the authors asserted that the different outcomes can be obtained jointly, through the implementation of important organizational and project antecedents, and as such alleviate …