Cost Transparency in Supply Chains - Demystification of the Cooperation Tenet - Research Paper Example

Research Paper Review: “Cost Transparency in Supply Chains: Demystification of the Cooperation Tenet” Research Paper Review: “Cost Transparency in Supply Chains: Demystification of the Cooperation Tenet” Introduction An article review, also called an article critique, is a specialized type of writing in which the reviewer interacts with a journal article. The reviewer reports the overriding ideas, claims, viewpoints or findings of the article and the reasoning behind them and critiques the contribution of the article to knowledge in the concerned discipline. This paper reviews a research paper by Andreas Hoffjan and company on cost openness in supply chains. The main objective of the paper is to demonstrate the understanding of the research process as taught in class. As such, in terms of the organization of the paper, a summary of each section will be provided followed by the views of the reviewer. Major section headings are typed in bold type while sub-section are typed normally. Purpose of the Research Though not explicitly stated, one can infer the purpose of the research. It is to develop an open-book accounting (OBA) framework that is organized according to the various uses of OBA and employed by practitioners of supply chain management as an implementation tool(Hoffjan , et al., 2011). This purpose is informed by the fact that very little is known of the relevance of OBA in competitive business environments that are normally punctuated by relationships of cooperation and trust between organizations and their suppliers and consumers. In terms of the research process, this section appears misplaced. It shows no connection to the literature review which should be the starting point and basis of the entire research process(Meerwald, 2013). Literature Review Literature review is the backbone of the research process(Tight, 2013). It is from the review of literature that the researcher identifies the gap in knowledge that they then set out to fill through research. Literature review is accomplished at two levels. The first level gives a broad overview of the subject matter of the research while the second level examines past similar research. Usually, at the end of their research report, the researcher will list data gaps and recommend that further research be conducted to fill these gaps. To this end, Andreas Hoffjan and company have ably demonstrated the existence of a knowledge gap. Past studies on OBA have tended to focus on the functions and consequences of OBA. However, very little is known of the practical applications of OBA. Research Research Problem Again, while the research problem is not directly stated, one can infer it from the research paper. While much research has been conducted on OBA, not much attention has been paid to its practical applications to supply chain management. To chart a new way forward, Hoffjan and their colleagues set out to identify and systematize applications of OBA. However, Hoffjan and company have failed to justify their research problem(Wang, 2013). For instance, they do not demonstrate the urgency of the problem and why it calls for immediate research and management solution. On the positive side, they have successfully linked their research problem to their review of the literature. Research Objectives The main objective of Hoffjan and companys paper is to give a bigger picture of how and why business organizations use OBA. As such, besides analyzing the real uses of cost transparency in the relationship between an organization and their suppliers, they also examine the determinants of OBA and how they influence the way the organization uses accounting data. This objective lacks clarity. A good research objective is stated in a brief and concise manner(Williams, 2004). That way, it is easier to include in the data collection instruments, questions that will lead to answers that will address the objective. Research Design Hopffjan and company used a qualitative research design for their project. This was supported by quantitative analysis. Their justification for using this methodology was that their research objectives needed incorporating a wide range of experiences from and opinions of supply chain practitioners(Hoffjan, et al., 2011). In addition, they argue that OBA research may still be considered immature. Then, they set up what they called a “three-tiered design”. According to them, Tier One entailed interviewing 59 supply practitioners. Of these, 49 completed and returned their online questionnaires. Tier Two entailed analyzing the data obtained in the first tier. Tier Three was designed to capture the reverse perspective by interviewing 18 sales experts. Overall, the research design was sound. Analysis and Evaluation Hoffjan and their colleagues analyzed the completed online questionnaires using content analysis. Without defining content analysis, they go on and report that they combined qualitative evaluation with quantitative measures such as the frequencies with which some responses appeared. The researchers did some due diligence to ensure that their interviewees were diversified(Hoffjan, et al., 2011). For instance, analyzed by industry, about thirty percent of them were in the automotive industry, another thirty or so were in industrial machinery, ten percent came from chemicals and healthcare, another ten percent from the technology industry and the remainder represented other industries. Overall, this component of the research was well done. Empirical Observations Perspectives of Purchasing Experts on Open-Book Accounting This section reports the findings of the research on the views of purchasing practitioners. As far as the desire for cost transparency and the current uptake of OBA are concerned, 91% of the respondents expected suppliers of organizations to be more honest with the pricing information for their goods. This implied that they expected a distinct advantage from the use of OBA. On the credibility of cost information, 89% of the respondents said that they did not believe the cost information furnished by suppliers. As noted earlier, many scholars believe that a trusting relationship is a requirement for OBA. Overall, the research confirms this belief. In terms of presenting their findings, the researchers largely used descriptive statements. Greater use of graphs and charts would have been better(Zajano & Edelsberg, 1993). These give a better visual impression and make it easier to compare variables. Framework for Open-Book Accounting The primary purpose of the study was to develop a framework for OBA. True to their word, Hoffjan and their fellow researchers have delivered on this promise. Their research shows that besides identifying opportunities for cost reduction, purchasing experts also use cost transparency to manage price. Also, the experts reported that whenever they exercised their organizational purchasing power, suppliers disclosed their costs even in settings where a trusting and cooperative relationship did not exist. The researchers realized that there are divergent uses of OBA and relationships between organizations and their suppliers. Consequently, the argue that there is a need to develop an OBA framework that would take into account all the possible uses of OBA and the divergent relationships that exist between suppliers and their customers. To accomplish the task, they analyzed the respondent’s key motivation for pursuing cost transparency. This was compared with the purchasing strategy a purchasing officer applied under similar circumstances. The reasoning behind the development of the framework is logical and coherent(Gobo, 2011). Implications Main Lessons This subsection recapitulates the main inferences drawn from the findings of the research as reported under “Empirical Observations”. The first inference is that practitioners value cost transparency as it enables organizations to manage the prices of their finished goods. This differs with the belief that many scholars hold to the effect that OBA is a tool for supporting interorganizational cost management (IOCM). In this setting, the researchers have observed both growing price negotiation pressure on the supplier and deliberating price changes as objectives of OBA. The second lesson is that while in IOCM a trusting relationship between the supplier and their customer is the driving force, in OBA, the balance of economic power between the two parties is more important. Thus, a powerful organization can compel their supplier to disclose their cost information. Refusal to do could lead to the contract being terminated. Again, this section of the research paper was well done. It flows from the findings of the research(Stergiou & Airey, 2011). Practical Contributions The usefulness of scientific research consists in the degree to which its main findings can be generalized and translated into practice(Hamilton et al., 2008). Otherwise, it is an exercise in futility. On this measure the research paper under review scores highly. Hoffjan and their colleagues have demonstrated that their research is useful for purposes of furthering knowledge in the field of supply chain management. For instance, their revelation that relative power balance between an organization and their supplier plays a far greater role than trust and Cooperation in an OBA environment has far-reaching implications. The organization that realizes and harnesses this power stands to enjoy reduced costs of raw materials. The organization could then pass this benefit to the consumer. Recommended Areas for Further Research No research project can be completely comprehensive. More often than not, there are knowledge gaps that need to be filled through more research. These gaps arise from the fact that researchers have limited time and material resources within which to complete their research(Nayar, 2012). As such, they cannot cover every aspect of the topic they are researching. Taking cognizance of this fact, Hoffjan and their colleagues suggest that because their research is explanatory, future empirical research might want to test hypotheses on the use of OBA. Also, their research excludes the perspective of suppliers. Thus, in the future, researchers could try to capture this. Conclusion In terms of adherence to the research process, the article under review scores favorably. The researchers have organized their paper such that their argument flows logically and consistently. This contributes to the validity of their findings and conclusions. In terms of contribution to knowledge in the field of supply chain management, the paper still scores highly. The authors of the paper have adequately demonstrated that theirs was not just another academic exercise. Their research has useful, practical applications for purchase officers. In particular, their revelation to the effect that the relative balance of power between a supplier and their corporate customer plays a far more important role in OBA than a relationship of trust has far-reaching implications for both parties. References Gobo, G., 2011. Glocalizing methodology? The encounter between local methodologies. International Journal of Social Research Methodology, 14(6), pp. 417-437. Hamilton, M. L., Smith, L. & Worthington, K., 2008. Fitting the Methodology with the Research: An exploration of narrative, self-study and auto-ethnography. Studying Teacher Education, 4(1), pp. 17-28. Hoffjan, A., Lurhs, S. & Kolburg, A., 2011. Cost Transparency in Supply Chains: Demystification of the Cooperation Tenet. SBR, 6(3), pp. 230-251. Meerwald, A. M., 2013. Researcher | Researched: repositioning research paradigms. Higher Education Research & Development, 32(1), pp. 43-55. Nayar, S., 2012. Grounded Theory: A Research Methodology for Occupational Science. Journal of Occupational Science, 19(1), pp. 76-82. Stergiou, D. & Airey, D., 2011. Q-methodology and tourism research. Current Issues in Tourism, 14(4), pp. 311-322. Tight, M., 2013. Discipline and methodology in higher education research. Higher Education Research & Development, 32(1), pp. 136-151. Wang, X., 2013. The construction of researcher–researched relationships in school ethnography: doing research, participating in the field and reflecting on ethical dilemmas. International Journal of Qualitative Studies in Education, 26(7), pp. 763-779. Williams, J., 2004. Towards a critical research methodology in journalism: Interrogating methodological assumptions. Ecquid Novi: African Journalism Studies, 25(2), pp. 257-274. Zajano, N. & Edelsberg, C., 1993. Living and writing the researcher‐researched relationship. International Journal of Qualitative Studies in Education, 6(2), pp. 143-157. Read More