Drivers of group purchasing organization (GPO) effectiveness and efficiency: The role of organizational collaboration types

Collaborative purchasing, the sharing of aspects of the purchasing function among two or more buyers, has been utilized for many years and is applied in a variety of industries including healthcare. Third party collaborative purchasing involves a third party organization that helps purchasing organizations by aggregating volume, negotiating lower prices, and providing other value added services such as benchmarking and market knowledge. Extant literature has examined the broad form of collaborative purchasing, but has neglected the individual differences in how purchasing organizations choose to work with the third party. In order to help fill this gap in the literature and better understand the relationship between purchasing organizations and third party collaborators, the author conceptualizes collaboration type as being multi-dimensional, comprising process, maximization, and relational aspects. These dimensions form the basis for two primary types of collaboration: Transactional collaboration (transactional, value-maximization focus) and Strategic collaboration (partnerships, group-maximization focus). A conceptual model is hypothesized that examines the antecedents and consequences of collaboration type. The hypotheses are tested with a sample of 123 hospitals across the United States. The results show that (1) there are differences in how purchasing emphasis and dependence management factors impact collaboration type, (2) transactional collaboration positively impacts purchasing effectiveness while strategic collaboration positively impacts both purchasing effectiveness and efficiency, (3) buying center factors play a unique role in moderating the impact of collaboration type on purchasing effectiveness and purchasing efficiency, and (4) post hoc analysis indicates that GPO satisfaction has an important role in the link between collaboration type and purchasing effectiveness and efficiency. The results provide insight for purchasing managers, third party collaborators, and sales organizations