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Influence of group purchasing organizations on financial situation of Polish SMEs

Author

Listed:
  • Grzegorz Zimon

    (Rzeszow University of Technology, Poland)

Abstract

Research background: SMEs often operate in markets where they compete with large companies. A fight for a customer, payment backlogs, problems with debt collection and new branches cause that managers are looking for solutions that will influence positively on the situation of financial companies. Maintaining liquidity and generating income are the primary steps to build a competitive position and a progressive development of enterprises. One of the most popular methods that allows companies to do profitable business and increase their chances for safety is operation within group purchasing organizations. Currently in the Polish market there are many different types of GPOs (Group Purchasing Organizations). The choice of the right one is a chance to improve their financial situation. Purpose of the article: The aim of the article is to present an impact of group purchasing organizations on the financial situation of enterprises. In the article the classification of groups is done and there are shown the benefits that commercial enterprises operating in them gain. The article presents some obstacles to join specific group purchasing organizations and difficulties faced by companies operating in them. Methods: The studies were carried out on the basis of 60 SMEs. These companies operated in five Polish GPOs. The groups were divided into branch and multi-branch ones. The study period covered the years 2013–2015. In order to analyze the impact of purchasing groups on the financial situation of enterprises, some selected groups of financial ratios were used. A preliminary analysis of financial balance sheets and profit and loss account was conducted. Findings & Value added: The analysis showed that the choice of an appropriate group purchasing organization had a large impact on financial situation of companies. Different opportunities can be offered by a branch purchasing group than by the multi-branch one. Research has shown that better results relate to dynamics of revenues, costs, liquidity and profitability that are effects of operation within the branch purchasing groups. The analysis conducted has also showed that functioning within purchasing groups allows to maintain safe financial liquidity, apart from obtaining a low price of purchased goods and materials, and has a positive impact on the effectiveness of managing receivables and short-term liabilities.

Suggested Citation

  • Grzegorz Zimon, 2018. "Influence of group purchasing organizations on financial situation of Polish SMEs," Oeconomia Copernicana, Institute of Economic Research, vol. 9(1), pages 87-104, March.
    • Handle: RePEc:pes:ieroec:v:9:y:2018:i:1:p:87-104
    DOI: 10.24136/oc.2018.005
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    Citations

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    Cited by:

    1. Grzegorz Zimon, 2020. "Issues of financial liquidity of small and medium-sized trading companies: a case study from Poland," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 8(1), pages 363-372, September.
    2. Grzegorz Zimon, 2019. "The Impact of Quality Management Systems on the Efficiency of Current Assets Management in Small Commercial Enterprises," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 308-316.
    3. Grzegorz Zimon & Dominik Zimon, 2020. "The Impact of Purchasing Group on the Profitability of Companies Operating in the Renewable Energy Sector—The Case of Poland," Energies, MDPI, vol. 13(24), pages 1-15, December.
    4. Yuanyuan Hu & Shouming Chen & Fangjun Qiu & Peien Chen & Shaoxiong Chen, 2021. "Will the Volume-Based Procurement Policy Promote Pharmaceutical Firms’ R&D Investment in China? An Event Study Approach," IJERPH, MDPI, vol. 18(22), pages 1-21, November.
    5. Grzegorz Zimon & Robert Dankiewicz, 2020. "Trade Credit Management Strategies in SMEs and the COVID-19 Pandemic—A Case of Poland," Sustainability, MDPI, vol. 12(15), pages 1-16, July.
    6. Grzegorz Zimon & Dominik Zimon, 2020. "Quality Management Systems and Working Capital SMEs in GPO—A Case of Poland," Administrative Sciences, MDPI, vol. 10(4), pages 1-13, October.
    7. Grzegorz Zimon & Marek Sobolewski & Grzegorz Lew, 2020. "An Influence of Group Purchasing Organizations on Financial Security of SMEs Operating in the Renewable Energy Sector—Case for Poland," Energies, MDPI, vol. 13(11), pages 1-17, June.
    8. Halina Chlodnicka & Grzegorz Zimon, 2021. "Balance Sheet Model for Small Economic Entities," Journal of International Business Research and Marketing, Inovatus Services Ltd., vol. 6(2), pages 7-11, January.
    9. Grzegorz Zimon, 2020. "Financial Liquidity Management Strategies in Polish Energy Companies," International Journal of Energy Economics and Policy, Econjournals, vol. 10(3), pages 365-368.
    10. Grzegorz Zimon, 2019. "An Analysis of the Financial Situation of Central Units of Group Purchasing Organizations," International Review of Management and Marketing, Econjournals, vol. 9(3), pages 134-137.
    11. Zimon, Grzegorz, 2018. "Organization of Transport in a Commercial Enterprise Operating in a Branch Purchasing Group/Organización del transporte en una empresa comercial que opera en un grupo de compras de la industria," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 36, pages 811-824, Septiembr.

    More about this item

    Keywords

    group purchasing organization; finance; commercial enterprises;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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