Impact of supplier selection and supplier involvement on purchasing cost management performance

Based on the concepts and theories of supplier selection criteria,supplier involvement and guanxi in the context of Chinese culture,this paper explores the impact of Supplier selection criteria and supplier involvement on purchasing cost control with regression model on a sample of 120 firms.It is found that,firstly the price and quality of supplier's product,supplier capability and significant positive influence on the degree of supplier involvement,but guanxi has an inverted relationship with the degree of supplier involvement;secondly,price and quality have significant influence on purchasing cost control but very limited,while supplier capability play a more role in reducing purchasing cost.And also guanxi has an inverted relationship with the level of purchasing cost control.Thirdly,supplier involvement positively mediates the main effect between supplier selection criteria and the level of purchasing cost control.Theoretically,this paper discriminate supplier involvement as a mediator not as paralleled antecedents with supplier selection criteria to influence performance and includes guanxi as a dimension of supplier selection criterion.Practically,its finding may help managers to better control purchasing cost.